Employment and Manpower Problems in the Cities

of the average Job Corps enrollee describes a school dropout; most likely educationally retarded at the time he left school, lacking in employment skills and opportunities, and probably a draft rejectee. Out of the 65 percent who had jobs, 60 percent made less than $1.25 per hour. Eighty percent had not seen a doctor or a dentist in the last 10 years. Sixty-three percent came from homes where the head of the household was unemployed and 39 percent from families on relief.

As of May 1, 1967, some 75,410 youths had some Job Corps experience. Of these youths, 52,985 found jobs, entered the military service or returned to school. Seventy-six percent found jobs, 10 percent joined the service, and 14 percent returned to school. Those who sought work found that they could obtain better jobs at better wages. The average wage per hour was $1.71 compared to the $1.19 previously earned. Of those working, 39 percent had received wage increases. Assuming the average Job Corps graduate made $1.71 an hour for the rest of his working life, and worked for 40 years, he would pay back the Government a total of $11,200 in income taxes.

It is not meaningful to compare the cost of rehabilitating a Job Corps youth to the cost of sending the average child to school. What we are doing here is to make up for years of neglect in the areas of education and health. It is not surprising that the youths served by the Job Corps must receive much extra education if they are to become productive members of society.

The manpower development and training program has also made a significant contribution in training the unemployed and underemployed. The MDTA has helped between 175,000 and 225,000 low-income persons in a period of less than 4 years. Eighty percent of the institutional trainees, and 50 percent of the on-the-job trainees who were heads of families, in training in 1966, had previously earned less than $3,000 per year, or had received no wages for the last full year of employment before training. The Labor Department estimates that for the cumulative period of August 1962 to December 1967, 76 percent of those receiving institutional training were employed at the time of last contact, and 78 percent were in training-related jobs. Through January 30, 1967, the median pretraining earnings of persons enrolled in MDTA was $1.44 an hour. The median posttraining wages were $1.74 an hour. The Labor Department estimates that the average trainee repays the Government for the expense of his training in taxes in about 2 years. He then goes on in his working life to repay the public's investment in him many times over.

Surely it makes more sense to make an investment now and avoid the risk of spending many times the amount in terms of welfare handouts to each unemployed individual and his offspring. Far less will be spent than will otherwise be needed to control the antisocial or criminal behavior which may develop. Not to incorporate an alienated individual into the mainstream of society will be more costly than the $7,025 spent per Job Corps enrollee, or $900 to $1,000 spent per MDTA trainee.

The cost of confining a man to prison for 10 years, while maintaining his wife and four children on welfare, is far greater. The average cost per offender per year in a felony institution in 1965 was $1,966. Assuming this figure remains steady, it would cost $19,660 to maintain

a man in prison for 10 years. To this must be added the amount necessary for the maintenance of the wife and four children, until they are 18, through aid to families with dependent children. In California, the average expenditure per recipient of AFDC as of January 1968 was $46.25 per month. This is exclusive of medical benefits and does not take into account the effects of possible liberalization of benefits. Assuming the children were all under 8 years of age, the cost of maintaining this family on welfare for 10 years would be $27,750. Together, the cost of maintaining the family and husband equals $47,410. These figures alone, not to mention the more intangible social values to the Nation, justify the expense of training an individual to become a productive member of society.

We are still far from the day in which each American who desires to work will be assured of a chance to make his own way. But this is no reason to state complacently that nothing further can be done. Our experience with existing programs for job training indicates that while we are not always successful, progress is being made. The reports of those who have studied both the job market and the current problems of American society make clear that a greater effort must be made in this direction. We must make that effort, and must give new meaning to the promise which this Nation offers each citizen.

Representative BOLLING. Thank you very much, Congressman.

At the outset of the hearing, the chairman of the full committee, Senator Proxmire, made an opening statement. It is my understanding that Congressman Curtis has a similar statement which he would like to read into the record, and without objection it will appear directly after Senator Proxmire's statement.

I will recognize him at this point to do that, and then later we will return to the questioning.

OPENING STATEMENT OF REPRESENTATIVE THOMAS B. CURTIS, MEMBER OF THE JOINT ECONOMIC COMMITTEE, ON BEHALF OF MINORITY MEMBERS

Representative CURTIS. Thank you, Mr. Chairman.

First, let me express my appreciation, and I know the appreciation of my colleagues on our side of the aisle, for the splendid work you are doing as chairman of your Subcommittee on Urban Affairs and in particular for moving forward right away to hold hearings on the report of the National Advisory Commission on Civil Disorders.

On behalf of the minority members of this committee, I would like to welcome the witnesses who open our hearings on the employment and manpower problems of the cities here today. The Report of the National Advisory Commission on Civil Disorders has set in broad relief some of the major dilemmas facing our society, as well as our economy. Certainly one of the most important areas demanding consideration is unemployment and underemployment.

Since the advent of the so-called new economics, we have become used to hearing our economy and its progress described in aggregate terms. We are told, for example, that our rapidly growing economy pushed the unemployment rate in April down to 3.5 percent, equaling the post-Korean war low. However, it is seldom made clear to us what

lies behind these figures which supposedly indicate the wealth and prosperity that all enjoy. For example, in urban poverty neighborhoods for the first quarter of this year, unemployment among Negro men 20 years of age and over was 6.3 percent, among Negro women in the same age category, 7.9 percent, and among Negro teenagers, over 27 percent, almost seven times the rate for the total labor force.

The Republican members of this committee have for a long time warned that aggregate measures stimulating the economy to ever higher levels of GNP are not enough to insure the well-being of all. Recent experience has borne this out: high levels of economic activity are not sufficient to insure reduction of unemployment to insignificant levels. We have to assure that those able and willing to work have the skills and education demanded by a growing economy, and that persons with skills are matched with this demand.

It is disturbing that some believe that it took a summer of major urban unrest and destruction to bring these points home. The analysis of Negro unemployment and underemployment contained in the Commission report is essentially correct, and the recommendations made are some of the basic things we must do to alleviate the employment needs of the urban lower income groups. But while these recommendations are received in some circles as bolts from the blue, radically new proposals for dealing with a critical problem, they are certainly not surprising to the Republican members of this committee.

For 6 years now, the minority members of the Joint Economic Committee have been emphasizing these very same points in its view on the President's Annual Economic Report. Republican members of this committee have introduced legislation to implement suggestions for improved training, retraining, job placement and job development. Among these are the Human Investment Act, which would spur job training by the private sector, the Employment Incentive Act which would stimulate industry hiring of unemployed with low levels of skill and experience, to seek to avoid minimum wage law problems, and recently the Veterans Employment and Relocation Assistance Act which would gear in the skills acquired in the military with the demand in the private sector.

I sincerely hope that these hearings will come to grips with the problems in the vital area of employment and manpower development in our urban centers. I would like to ask unanimous consent that the section of the minority views on the 1968 Joint Economic Report pertaining to meeting America's urban crisis through employment, training, and retraining be included in the record of these hearings. Representative BOLLING. Without objection, so ordered. (The material referred to follows:)

[Excerpt from 1968 Joint Economic Report, S. Rept. 1016, Mar. 19, 1968]

IV. MEETING AMERICA'S URBAN CRISIS

A. Recommend the improvement of employment, training and retraining efforts with: (1) the Human Investment Act to stimulate job training in the private sector; (2) the Employment Incentive Act to encourage the employment and training of the unemployed with low levels of skills and experience; (3) the establishment of a national job opportunity survey, as recommended by the

Republican coordinating committee; (4) business efforts to provide more opportunities to the educationally disadvantaged by restructuring jobs and altering hiring requirements; (5) improved coordination of Federal training and retraining programs; (6) further progress toward tearing down discriminatory barriers to employment; (7) improved public transportation to increase the accessibility of jobs to central city residents.

B. Urge the following measures to increase the fiscal capacity of our State and local governments to meet the needs of their citizens: (1) restrain the current trend toward fiscal centralization at the Federal level;1 (2) the mobilization and efficient use of State and local revenue sources through strengthening the property tax, Federal payments in lieu of local taxes on Federal property and basing eminent domain awards on replacement value.

C. Support the following educational proposals: (1) more equitable financing of central city schools; (2) serious consideration of free public education through the junior college level; (3) extended preschool education; (4) substantial improvement of vocational education programs.

D. Urge efforts to bring private enterprise to bear on solving urban problems, such as: (1) the proposed Economic Opportunity Corporation to provide technical assistance and seed money to private involvement in urban problems; (2) the proposed Domestic Development Bank to stimulate broad economic development in slums and other depressed areas; (3) the amendment of those State constitutions that forbid the commingling of public and private funds for public purposes; (4) the encouragement of business groups already involved in this area; (5) the creation of a National Commission on Urban Living.

E. Recommend the following programs to improve the Nation's housing: (1) Federal action to provide, within constitutional limitations, fair housing throughout the United States; (2) State and local action to encourage zoning policies to overcome social, economic, or racial segregation; (3) increased research to speed advanced construction techniques; (4) incentives for private enterprise development of low-income housing; (5) requirement that property must meet local code enforcement standards before it can qualify for depreciation deductions from Federal income taxes; (6) extending the privilege of homeownership to the lower income segments of the population; (7) consideration of the impact of public construction on existing housing and metropolitan development and improved relocation services for both displaced families and businesses.

F. Support the economic development of rural areas.

The Chair now recognizes the Senator from Wisconsin, Mr. Proxmire, for questions of the witnesses.

Senator PROXMIRE. First I want to congratulate both you men on two very, very fine statements. Senator Harris, I was especially impressed by your remarks on racism. This is the most emphatic and convincing description of racism and its economic impact that I have ever heard from anybody. I especially appreciate your statement, and I am going to quote:

Racism is the number one mental health problem of America; it cripples far more children and adults than schizophrenia or mental retardation. And I speak both of the victims of racism as well as those who are taught it.

And then you point out the economic effects.

I think it is very important to keep this in mind because so many think of the Negro problem as a white problem to a very great extent.

1 Senator Javits believes that 1 of the most effective ways to strengthen State and local governments is through revenue sharing. On Jan. 18, 1967, he and 6 other Senators (Howard Baker, Republican, of Tennessee; Frank Carlson, Republican, of Kansas; John Sherman Cooper, Republican, of Kentucky; Peter Dominick, Republican, of Colorado; Hugh Scott. Republican, of Pennsylvania and Milton R. Young. Republican, of North Dakota, introduced a plan which would return to the States. Federal revenues equal to 1 percent of the annual aggregate taxable income, or $3.000.000,000 in the first year. He urges that the revenue-sharing idea be given careful study by appropriate congressional committees.

[Excerpt from 1968 Joint Economic Report, S. Rept. 1016, Mar. 19, 1968]

IV. MEETING AMERICA'S URBAN CRISIS

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