Wisconsin

5 NAJOR GAY ORD NELSON

Senato r G aylord N elson Urban Manpowe r Confer ence

M a r k Plaza H ot e l Milwauk ee , VT i s c onsin

12:45 p. m., Tue sday , O ctober 31

(202)225-5323

Ladie s and G entlemen, it is a plea sure to be he r e. T his meeting on urb an manpo'we r p r oblems, and the m e e ting at E au Clai re last week on rural p roblems represent a promising effort to o rganize statewid e support t o solve the :related problem s of u n e mployment and lagging economic develop-m ent. ~

Villiam Bechtel i s t o be commende d fo r o r gani z ing these confe rence s (in r and e conomic deve l op m ent. There is n o m a n in the nation mor e

knowledgea a bout employme nt a n d t rain in g p rob lems. As yo now, B ill B e ch tel was for t years the sta ff di r ector of my Subco m ittee on Employment, M a npower, and P overt y . that po sit i on h e n ot on r afte d major manp ower legi slation but gained detailed owl edge of w o r kings of the Department of L abo r and the administration of man p r o g rams.

in. erstands d"n y pa t T h e key to the p r oblem is jobs a nd the key to jobs lies in p ublic

service employment and economic development. T h e purpose of these con­fe rences today in M ilwaukee and last week in Eau Claire is to begin the proce ss of bringing manpowe r experts, businessmen, state officials a n d ordinary c itizens together to face the problem of the need for a substantial growth of a numbe r of jobs in Wisconsin in the coming years.

For too long we have tended to view the problems of unemployment and economic development as separable issues--one dealing with the p oor and the othe r with the business community. Our separate efforts to help the poor and to help busine ss in lagging regions both have been far too feeble and unimaginative. Perhaps by bringing these problems together we can build the political support necessary to solve them both.

For make no mistake about i t, the only solution to the problem of poverty is full employment at decent pay, and a crucial part of the answer as we press for full employment must come f r om developing the economie s of our small towns, rural areas and inner cities.

As chairman of the Senate Subcommittee on Employment, Manpower, and P ove r ty, I have had opportunity to hold hearings in cities from New York to San Francis c o and from Milwaukee to the Gulf Coast. In each the ans w e r was the same: manpower programs that train people for jobs that don't exi st are failures, and the only way out of poverty is t h rough steady work at decent wages.

The Nixon Record

The record of this administration in employment a nd manpower has not been good, to say the least. On fir st coming into office, the President sought to s top inflation by slowing down the economy. He was only half successful. He did stop economic growth. In 1970 we achieved a year of zero g r owth for the economy. But inflation continu.ed on u.pward. And the rising unemployment that accompanied

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t he slowdown dro ve the unemployment rolls above the 5 million mark, and led to a dou bling of the welfare rolls __ from 6 million on AFDC in 1969 to a project ed 12 million this fiscal year.

Vhen Congre ss attempted to take a first s tep t oward doing something about joblessness in 1970 with t h e ove r whelming votes for the Employment and Manpower Act of 197 0 and its public s ervice employm ent p r og ram the President' s response was a veto messa ge denouncing llV.rPA_style" jobs .

For an administr ation so convinced of the superiority of wor k to welfare it was a str ange veto.

Then in 1971, when we had passed an extension of the Economic Opportunity Act i ncluding an additional $500 million for the Neighborh ood Youth Corps , we were met with another ve t o.

In J uly of 1971, the President did inde e d sign the Eme r gency E m ploym ent A ct, after many months of administration opposition. T hat program now employs some 180,000 formerly unemployed people in needed public service jobs on cit y and state payrolls all ac r oss the nation. In Ti sconsin some 3, 5 0 0 have foun jobs in a p rogram costing some $16 million.

But now, according to the newspa per s, the Office of Ma nagelnent and Budget wants to kill the p rogram . T hey are p r oposing zero funding for fiscal y ear 1974.

Instead of jore .. the Adm inistration has pushed fo r manpowe r reorgani­zation as if the program! s primary problems are administrative.

Together with public service employment,Congre ss deve loped a com­pr omise manpower reorganization plan in i ts 1970 bill, involving citizens as well as local officials and a ss urin g the poor a voice in planning and adminis t r ating manpower programs.

That compromise p lan won broa d s upport in 1970 before the b ill was vetoed. 'V'F e have continued to work on the program and confi de ntly expect to pass such a decentralization plan into law during the next Congress.

B ut we now stand in real dan ger t hat th e manpowe r programs we have are about t o b e drastically cut back.

Assistant Treasu r y Secretary C har ls '.I{ alker was quoted in the New York Times a few weeks ago as telling a secret meeting of New York bankers that manpower p rograms we r e h is favorite t a r get for elimination from the budget because they had not lowered the unemployment rat e.

'What nonsense! Vl ith over 5 million unelnployed h ow can a training pro­gram fo r some 500,000 individu a l s lower the rate of unemployment? T r aining is only half of the system. T h e re has to be a supply of jobs to be filled or the efforts at training are wasted.

On Labor Day the President dedicated himself anew to the wor k e thic. As if ther e is any r esponsible person in this broad land who is opposed to the work ethic. The poor s e ek w o rk. They have plenty of work ethk. But man does not live b y ethics alone, he must have the bread of opportunity.

To take away the j ob a nd criticize a man for not working hardly see ms fair.

T he National Impact of Ur ban Unemployment

In recent yea rs the connection between unemployment and poverty has begun to be bette r unde rstood. In the past , e specially in the late 1960' s when national unemployment r ates we re well below 4 percent, the re was a tendency to ignore the t e rribly high rate s of unemployment in rur al a r e as (as high as 16 pe r c ent in some Wisconsin counties) and ghetto labor m a r kets.

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Now we have newer infor mation and better ins i ghts. Even the conservative Senate Finance Committee now seems to favor a major job creation effort.

The information I speak of comes from a very careful survey of inner city job markets carried out by the Census Bureau as part of t he 1970 census.

As analyzed by my subcommi ttee staff the information shows that fully 30 percent of the labor force in the se inner city areas is either unemployed, looking for full time work or working for under $2 .00 an hour. You must earn $2. 00 an hour and work year round to earn $4,000 a year, the po verty level. In Mil­waukee's inner city, 22.5 percent of the workers are looking for full time work or ear ning below the poverty level.

The "subemployment index," as this combined measure of unemployment and low-wage jobs is called, is based on the pioneering efforts in 1966 of Willard Wirtz, then Secretary of Labor.

In a memorandum to President Johnson reporting on his 1966 findings, Wirtz said:

"If a third of the people in the nation couldn't make a living there would be a revolution. This is the situation and the prospect unless action is taken in that nation-within-a-nation, the slums and ghettos. "

With inner city labor mar ket conditions so tough. is it any wonder that we ll intention ed anti-poverty and training prog r arns can only help a few individuals? The terrifying circumstances of poverty corne to dominate life: low wages and unemployment, family break-up and welfare, despair. drugs and crime for the young men.

The loss, however, is not limited to the men. women and children of the inner city. nor to those whose cities are m ade dangerous and discouraging places by the existence of mass poverty i n the world's wealthi e st nation.

Unemployment is of enormous cost to the nation as a whole. You see, you c an leave a ton of coal in the ground and mine it anothe r year, you can leave a field lie fallow, money you can leave in the bank, but for those of us who have only our strength, skill and willingness to work by way of economic assets, a day's work lost is a day's work lost fo rever. A week's work stolen away is a serious loss.

And for the nation as a whole , for every 52 men unemployed for a week, the n ation loses a mar.-year of work. Multiply these men and those lost weeks by millions and you begin to understand the enormous 10s 6 to the nation that mass unemployment represents.

In fact, Senator Proxmire's Joint Economic Committee estimates that for everyone percent of unemployment, the nation 10 ses between $12 and $15 billion in tax revenue at current tax r ate s. One Michigan State economist esti­mates that if the nation could have maintained unemployment at 3 percent from 194 6 to 1970 -- as was common for Eur opean nations -- that our gross national product would have included another $650 billion over those years, as much as our entire GNP in 1966.

Talk about wasted resources! Full employment would secure us sufficient income to meet all our domestic and defense priorities.

Yet the Nixon Administration proposes to stop further economic expansion and settle for unemployment at the 5 percent rate. "\'1 e now know that 5 percent national rate of unemployment means 10 percent in the inner city and a rate of subemployment t riple that figure. Such a policy will inevitably result in per­petuating welfare. We must put the work ethic to work by providing jobs.

What Can be Done

First, we must make full employment at decent pay a first priority of the national gO'\Ternm.ent. It is unacceptable to trade abject human misery in poverty

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communi ties off against inflation for the rest of the nation.

To carry out that policy will require a series of steps. We must find ways of fighting unemployment with the least possible inflationary impact. We must find ways to develop the unused resources -_ human and material -- of our lagging regions. I would propose t he following:

A major public service employment program to put the unemployed to work on priority public service jobs. The present small scale but succes sful Emergency Employment Act provides a demonstration that such a program is possible. It represents an effective way to mOve people from we lfar e to con­structive employment on n eeded jobs. Public Service Employment programs have been urged for years by those studying the problems of inner city labor markets. Now I believe we have a real opportunity to build the political support needed for a substantial program.

But more jobs in the public sector are clearly not sufficient.

We need expande d employment in the private sector as well. We need economic growth and economic growth policies.

In fact, the population growth that this nation faces in the 28 years before the year 2, 000 compels us to take stock of the way this nation is going.

The Bureau of the Census projects that at current birth rates we will have to employ, house, feed, and clothe another 100 million Americans by the turn of the century. A backward glance at the way we have g r own wi t h out such planning since the end of the Second World War is enough to give chills to anyone. It would be disastrous to force more of them into cities. We cannot afford a continued pattern of inner-city overcrowding and poverty coupled with ugly urban sprawl. Do we want to continue draining population from the fine older cities and towns · in beautiful rural Wisconsin to crowd population down into Milwaukee, Racine, and Kenosha in the state's southeast corner . Of course not. We need policies for balanced growth in Wisconsin and in the nation.

It is sad to note that our national efforts in economic development have b een like our m anpower training and pover ty efforts __ too small and too late. It

was nearly 11 years ago that the great Senator Paul Douglas' Area Redevelopment Act passed the Congress. Yet today we are s pending under $300 million on all our economic development efforts nationwide (apart from a highway construction effort in Appalachia). As part of the Economic Opportunity Act amendments of 1972 -- just signed into law last month __ the Congress has established a new Title VII Community Economic Development program in O. E. O. It is promising -- but still very small. A major effort is needed to develop both inner city and rural areas so that the inevitable population growth over the next quarter century can be in harmony with man and nature rather than destructive to both.

Carrying out such a program of national reconstruction will be very diffi­cult. But it has this advantage: A program of balanced growth could unite all A me ricans behind an effort to rebuild t he nation on a basis of economic equality and a livable environment in the last quarter of the 20th Century. It is a program from which the whole nation can benefit.

The Role of Manpower

A s part of such a broad effort our manpower programs would need to be placed in the hands of local citizens, and expanded to help all workers.

Detailed social planning cannot be done from Washington -- or even the state capitol. Effective democratic planning must be done by officials at the local level -- with the participation of the people who will be affected.

Our experience with the evermore elaborate cat's crad1e of red tape pro­duced by the Labor Department and its regional offices gives practical proof of this point if any were needed ..

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Wisconsin's frustrating effort to simply find out the rules used in Washington for manpower fund allocation sounds like a chapter from a Kafka novel.

What local manpower administrator or mayor, for instance, would shift funds from programs that train veterans to programs to train welfare mothers when we know that few jobs for welfare mothers exist? Yet that is precisely what the Administration in Washington has done. The department testified to a House Appropriations Committee that it has cost the Federal Government $5,000 in training for every welfare recipient placed under the Work Incentive Program. But the decision to expand the program with no significant job cre ation stands.

Beyond decentralization it will be necessary to expand manpower pr ograms so that they serve not only the poor but all wor ke rs and industries who seek training, upgrading and retraining.

But manpower programs, decentralized or not, even better run programs cannot do the whole job. Job supply, am jobs at decent wages are crucial. The nation as a whole must be united around the effort to develop our resources in a responsible, responsive way, to achieve full employment and balanced growth.