I am prepared to suggest to this committee that we need at least 3 to 4 million jobs, and that is a very sizable effort when you consider the fact that the country will grow by, maybe, 112 million jobs this year. We will have that many new entrants into the labor force, and, unless we do something more than we are now doing, we will not make very great inroads into that problem.

(Prepared statement of Mr. Robson follows:)

PREPARED STATEMENT OF PROF. R. THAYNE ROBSON

THE NATURE OF UNEMPLOYMENT AND SUBEMPLOYMENT IN URBAN AREAS Mr. Chairman, and members of the Committee. The Kerner Commission Report dramatically and accurately describes the nature of the unemployment and subemployment problems in the Urban areas of this country. The report is clear on two major points. First, there is a terribly serious unemployment and sub-employment problem in this country, and, second, the present efforts to deal with the problem while praiseworthy in every respect are not adequate to provide jobs with dignity and a fair income to all American citizens who want to work.

It is my understanding that this session of these hearings is intended to focus on the scope, structure, trends, and characteristics of the people involved and to suggest rough estimates of the economic waste which these data imply. Consistent with these objectives, I should like to outline five major points for the Committee.

1. The data which relate strictly to the urban areas, and more specifically to the slum areas within the large metropolitan areas, are extremely limited. The available data come from a few surveys conducted in a few cities in 1966, and from the studies of persons participating in the 1967 riots.

2. The data most often used are derived from nationwide surveys of unemployment and work experience. The national data pertaining to the unemployment and sub-employment problems of nonwhites provides the best indications of the unemployment and sub-employment problems in the urban slums. The Kerner Commission report, The Manpower Report of the President for 1968, and other studies rely on these data.

3. The findings of the limited surveys in slums and the national data on the nonwhite population while not entirely consistent in every regard do show the general magnitude of present problems and suggest that policy actions are not adequate to meet the need.

4. With some heroic assumptions, it is possible to make some broad and rough estimates of the loss in productive capacity which present unemployment and sub-employment entail.

5. Persons who have worked with manpower problems in the slums do gain an intuitive feel for some of the characterictics of the people, the hardships associated with unemployment and sub-employment. Sub-employment is probably more significant than unemployment as a cause of poverty in the slums. It is difficult to exaggerate the alienation and social despair associated with present conditions.

It is paradoxical that our urban areas provide the largest number and the most attractive jobs utilizing the best of our human talents and providing the highest incomes, and at the same time have slum neighborhoods and districts where employment conditions persist at the same levels as the depression of the 1930's.

Data on the Unemployment and Sub-employment Problems Specifically Relating to the Urban Slum Areas are Limited—Outside of the decennial census, there are no periodic surveys and studies of the actual unemployment and subemployment in the urban slums. Special surveys were made in 1966 in a few cities by the Bureau of the Census and by the Department of Labor. These surveys were extremely significant in focusing on the sub-employment problem as well as the unemployment problem. Sub-employment is a more important contributor to poverty in the ghettos than unemployment. The results of these surveys were reported in the Manpower Report of the President for 1967. The Kerner Commission accurately captures the implications of these data in the following language:

"A slum employment study by the Department of Labor in 1966 showed that, as compared with an unemployment rate for all persons in the United States of 3.8 percent, the unemployment rate among 16 to 19 year-old nonwhite males was 26.5 percent, and among 16 to 24 year-old nonwhite males of 15.9 percent." (Commission Report, p. 414.)

The data collected during 1967 showed that 20 percent of the rioters studied were unemployed. While these data give important insights to the magnitude of the unemployment problem, they do not give us a picture of progress over time, and the data utilized to gain this picture of unemployment and sub-employment conditions in urban slums are the data from national surveys on the problems of nonwhites. While whites still outnumber nonwhites 3 to 2 in all urban poverty areas, nonwhites predominate in the worst slums, and over 90 percent of all nonwhites are Negro. Approximately 70 percent of all Negroes live in metropolitan areas. Until the Department of Labor initiates periodic surveys specifically limited to the urban slums, the national data for nonwhites will give us the best picture available. When the special surveys are compared with the national data for nonwhites the similarity in findings indicates that the national data may be adequate for characterizing the slums.

The principal important facts which must be kept clearly in mind are these: 1. Urban slums have "above-average proportions of older people; of widowed, divorced, and separated persons; of households headed by women; and of members of ethnic minority groups." (1968 Manpower Report, p. 85.)

2. The Negro population is growing very fast-14.4 percent between 1960 and 1966. The median age of Negroes in 1966 was 21.1 years, and 45 percent of all Negroes were under 18 years of age. The Negro labor force will grow very rapidly in the years ahead. (Kerner Report, p. 238.)

3. Unemployment rates are higher, and average duration of unemployment is longer for nonwhites than for whites in every age and occupational category for which data are available. The nonwhite unemployment rate of 7.4 per cent in 1967 was more than double the white rate of 3.4, and the nonwhite teenage unemployment rate at 26.5 per cent was almost 21⁄2 times the comparable white rate of 11 per cent. (Manpower Report, p. 60.)

4. "About 12 per cent of all nonwhite workers had 5 weeks or more of unemployment in 1966, compared with 6 per cent of all white workers." One out of every five unskilled laborers who were nonwhite was unemployed for 5 or more weeks during 1966. (Manpower Report, p. 19.)

5. Sub-employment problems due to involuntary part-time employment, lower participation rates for nonwhite males, and low earners are much greater for nonwhites than for whites, with the magnitude of the problem being understated by the recognized under-count for nonwhite males.

(a) "Between 1960 and 1967 the proportion of nonwhite men 25 to 64 years of age not in the labor force rose from 73 to 91 per 1,000 people; among white men, the increase was less-from 47 to 55." (Manpower Report, p. 63.)

(b) Nonwhite workers are disproportionately affected by part-time employment. "The sub-employment rate for nonwhite men was 22 per cent, compared to 8 per cent for white men." (Manpower Report, p. 35.)

(c) "One-fourth of the nonwhite men who worked the whole year were low earners (annual earnings under $3,000), compared with 7 per cent of the whites." (Manpower Report, p. 31.) "The problem of low earnings has been less responsive to the economic upturn than extended unemployment, and so far has been less affetced by manpower and anti-poverty programs." (Manpower Report, p. 35.)

6. Nonwhite employment is disproportionately concentrated among the unskilled occupations as laborers, service workers, and operatives. (Manpower Report, p. 64.)

7. Unemployment rates and sub-employment rates decrease as the level of educational attainment increases. Nonwhites lag behind whites in educational attainment.

These essential facts add up to a bleak picture. While the data have many specific weaknesses, the weaknesses are such that correction would not likely alter the overall picture that emerges. However, it would be wrong to leave the data at this point without acknowledging that substantial progress has been made in recent years.

The available data do show that nonwhites are making relatively greater gains in moving into the family income class of $7,000 per year and over, and in moving into professional, technical and managerial occupations. However, the numbers of nonwhites in these categories a decade ago was so small that these advances affect a relatively small proportion of the total nonwhite population. Unemployment rates for nonwhite workers have declined as the white rates have declined in every age category, except teenage unemployment, since 1962. Educational attainment of nonwhites is rising and the gap between whites and nonwhites is being slightly narrowed.

Estimates of the loss in productive capacity due to unemployment and subemployment are difficult to make. The Kerner Commission estimates that, if nonwhite unemployment rates in 1966 had been the same as the rate for whites, and if the rates of pay had been the same, the income gain for nonwhites would have been $1.5 billion. Likewise, "If nonwhite men were upgraded so that they had the same occupational distribution and incomes as all men in the labor force, this would have produced an additional $4.8 billion in additional income." (p. 255) By these calculations the cost of excessive unemployment and sub-employment for nonwhite males is an income loss to these individuals of $6.3 billion.

There are alternative ways to view this problem. The Kerner Commission staff did make a calculation of nonwhite sub-employment in disadvantaged areas of all central cities. The numbers shown in these calculations are 318,000 unemployment plus 716,000 under-employment for a combined sub-employment of 1,034,000. These estimates presumably constitute the basis for the recommendation of the creation of two million jobs over the next three years. The value of a job in gross national product terms must, at best be somewhat arbitrarily estimated. Based on the calculation that 75 million workers produced a GNP of $827 billion during the first quarter of 1968, then the average product per job is approximately $11,000. The crucial determinate then becomes the kind of jobs that are created and the value of the product from those jobs. If it were onehalf the national average, a conservative estimate, the loss on two million jobs exceeds a gross cost of the economy of $10 billion per year. The Kerner Commission report and other studies of present day manpower problems do not adequately account for the need to abolish jobs with low rates of pay. It is estimated that 11 million workers earn wages below the poverty income levels and of these 6.5 million work in full-time jobs. The considerations in this problem are (1) that there is a lot of work worth doing at low wage rates that will not be done at higher rates of pay. This reduction in work performed as wages rise has been observed most dramatically in American agriculture and household services. (2) An affluent economy like the United States can decide to abolish low paying jobs and create high paying jobs. There is much to be said for the age old argument that rising wage rates do cause unemployment, especially among the unskilled and uneducated. It is also apparent that in this country and throughout the industrial world, sophisticated jobs requiring varying degrees of skills are manned by persons equally unskilled and under-educated at the point of hiring.

The broad policy choice is to adopt an income policy along with a manpower policy and to use the power of creative Federalism to stimulate selective job creation in the public and private sectors with jobs that provide adequate incomes and thereby replace sub-employment. It is possible to upgrade the present workers suffering from sub-employment so that they can move into better jobs, but if the supply of people in slum areas always exceeds the number of good jobs available, then sub-employment will persist.

One could argue then the need for four or five million good jobs on which the gross product would be $5,000 to $10,000 per year and calculate the cost in foregone production making allowances for what is lost by eliminating low level jobs or by inducing higher pay on the jobs, if society wants the work performed. In summary, however, it is generally acknowledged that the available data on the concentration of unemployment and under-employment in the urban slums and impoverished rural areas could be greatly improved. The 1968 Manpower Report of the President calls attention to this fact.

"Though plans are far advanced for a new program of studies on employment and unemployment problems in the urban slum areas, to be launched by the Department of Labor in 1968, the available statistical information for such areas is still limited, in the main, to a few special surveys conducted in 1966 and reported on in last year's Manpower Report."

From the Manpower Report we learn:

"The more extensive series of surveys, now being developed for slum areas, will provide regular information on employment and related problems in these areas. They will be designed to shed light upon the special employment-connected problems of the urban slums and to measure their seriousness and extent. Special efforts will be made to increase understanding of the motivation of slum residents with respect to work and job hunting, training and education, and of the ways in which people in the slums survive economically. The surveys will be highly flexible and will test various approaches aimed at providing new insights into these intricate problems. The findings should provide improved guidelines for manpower programs and policies tailored to the needs of slum residents. "Intensive efforts will also be made in these surveys to obtain information on the characteristics of persons missed in censuses or other household surveys. This under-count is highest (15 to 20 percent) for young nonwhite men, among whom rates of unemployment and under-employment are also extremely high. Limited data suggest that the missed population is typically of a lower socioeconomic group than the population counted. Furthermore, a large proportion of the uncounted population probably lives in urban slums, where census taking is particularly difficult. For these reasons, the new surveys will make special efforts to reach persons who might be missed in regular census surveys."

Representative BOLLING. Thank you very much, Professor Robson. We will hear next from Dr. Vivian W. Henderson. You may proceed as you wish, sir.

STATEMENT OF VIVIAN W. HENDERSON, PRESIDENT, CLARK COLLEGE, ATLANTA, GA.

Mr. HENDERSON. Thank you, sir.

I want to apologize to the committee for not having a typewritten statement. I have a written statement that I would like to share with you and I will submit for the record in proper form.

I am pleased to be with the committee and I am also pleased that you mentioned the fact that I am here as an economist, much more so than I am as president of Clark College in Atlanta, Ga., because I have spent all of my life, my adult life, looking at, researching and writing about the employment problems of black people in this country, and also as an active participant in programs and efforts to combat poverty and destitution encountered by large segments of the population, both black and white.

I am going to approach my bit of the discussion by really dealing with the problem of unused manpower, because, when we talk about unemployment and subemployment, in the final analysis what we are really talking about, we are talking about, unused manpower.

There are three components of unused manpower. One is the unemployed. The second involves nonparticipants or those outside the labor force who could and should be in the labor force. And, third, those who are working at jobs below their apparent abilities and in all probability at wages below their earning potential.

I would argue that it is this third category that perhaps gets less attention in terms of public policy than the other two, and the other two get minimum attention as it is.

The problem of unused manpower, it seems to me, is especially critical in a prosperous economy. Likewise, it is very complex under conditions of economic prosperity. We know that in this country of ours we are in our 86th or 87th month of sustained prosperity. This is over 7 years of sustained prosperity.

Unemployment is at its lowest level since about the middle of the 1950's: about 3.5 or 3.7 percent. Yet, despite the low overall rate of unemployment for the Nation as a whole, despite the sustained prosperity, 7 years, there are those who are left behind in urban and rural areas and for whom measured full employment has little or no meaning.

These, I suggest, are not necessarily disadvantaged members of the society. "Disadvantaged" is a euphemism that has crept into our language which I personally reject because it puts the burden of the problem entirely on the individual. I suggest these are victimized members of the population. They are victimized because they are trapped in positions of low net economic advantage. Consequently, unemployment, while it is low in general, it is disproportionately high for those in the population victimized by racial discrimination, minimum skills, limited work experience, age, and another factor that has been sharply brought into being in the last decade, limited access to jobs and training because of such factors, and poor job-information systems.

For example, among the various population groups, the jobless rate ranges all the way from a low of 2 percent for white adult married men, up to an unconscionable rate of 26 percent for Negro female teenagers. This will go even higher when schools close for the summer. What I am saying is that, beyond traditional unemployment figures, the figures that we tend to zero in on, and upon which public policy is based, is a larger and more complicated area of unused manpower that until recently has remained largely unexplored and has escaped really systematic quantification.

This includes unemployment in the slum areas within major cities. It includes the problem of nonparticipation in the labor force of persons in the working-age population; those who are neither employed nor looking for work, and it includes the problem of underemploy

ment.

It is this broader aspect of unused manpower, the combination of unemployment, nonparticipation, and underemployment, that is getting increasing attention on the part of labor market analysts and, as Thayne Robson has pointed out, it was the object of a special survey taken in slum areas of eight cities or eight metropolitan areas a year or so ago.

The subemployment index that was obtained pointed up rather clearly and distinctly the extent of unused and wasted manpower in our cities.

This survey discovered-and, frankly, it didn't have to have a survey to discover it-that unemployment in slum areas was around 12 percent compared with 3.7 percent in the Nation as a whole at that time. In some black ghettos and slum areas as much as 40 percent of the working-age population is idle. This is another term I would like to be sure we understand, because idle and unused manpower is not only wasted, it doesn't make sense. As my teacher used to tell me, "that the idle brain is the Devil's workshop." I think some of the problems we have in the cities and some of the tension that is in the rural areas suggest to me that we ought to begin to think about the consequences of an idle brain and an idle person. That is exactly what we have been