We are also concerned with the needs of small businessmen who may find it difficult to apply for, develop or utilize MDTA-OJT programs. In many instances their work force is made up of people whose skills are readily transferable within a labor area. There have been some fine MDTA programs using associations or employer groups to develop, administer, and implement on-the-job training programs, but perhaps more can be done in this area.

Finally, there is a growing concern with the role of the MDTAOJT program in helping meet emerging manpower shortages and in providing our labor force with greater flexibility during a period of increasing demand for qualified workers.

We are fortunate in having with us today the man authorized by law to encourage and develop these training programs. But more than that, Secretary of Labor Wirtz has long been a spokesman for disadvantaged in the labor market, as well as a prime mover in development of an active manpower policy.

It is our pleasure to have the Secretary with us, and I am sure his testimony will, as always, both enlighten and guide the Congress.

Mr. Secretary, before I ask you to introduce the members of your staff, I would like to see if Senator Randolph would like to say anything.

Senator RANDOLPH. Senator Kennedy, I believe that the Secretary will present testimony which will be very helpful and informative, and in a very real sense challenging to this subcommittee.

Your statement is certainly a valid one as we begin these subcommittee hearings during the second session. I am intensely interested in on-the-job training. When we perform the task of on-the-job training, we are helping the unemployed worker not a year from now or 5 years from now, but we are helping him at this present time, to become a gainful member of our labor force.

Thank you, Mr. Chairman.

Senator KENNEDY of Masachusetts. I was given a statement by Senator Prouty and I would like to read that into the record.

STATEMENT OF HON. WINSTON L. PROUTY, A U.S. SENATOR FROM THE STATE OF VERMONT, AS READ BY SENATOR KENNEDY OF MASSACHUSETTS

Senator KENNEDY of Massachusetts (reading). I commend the chairman of the subcommittee for continuing these important hearings on on-the-job training. On-the-job training offers a time-tested way of providing America's working men and women with the job skills they need to achieve higher standards of living, while at the same time contributing to the continuing advance of the American economy.

I have been an early and continuous supporter of the OJT provisions of the Manpower Development and Training Act. It is my hope that these hearings will cast new light on the operation of this program, so that it may be made to work more smoothly and efficiently.

I sincerely regret that my absence from Washington today precludes my attendance at the opening of these new hearings, but I plan to give the most careful attention to the work of the subcommittee in this important area.

Senator KENNEDY of Massachusetts. Mr. Secretary, if you would be kind enough to introduce the members of your panel.

Secretary WIRTZ. Thank you, Mr. Chairman.

Senator KENNEDY of Massachusetts. We do have the copies of your testimony. You may read that or summarize it.

STATEMENT OF HON. W. WILLARD WIRTZ, SECRETARY OF LABOR; ACCOMPANIED BY STANLEY H. RUTTENBERG, MANPOWER ADMINISTRATOR; HUGH C. MURPHY, ADMINISTRATOR, BUREAU OF APPRENTICESHIP AND TRAINING; AND HENRY P. PRZELOMSKI, CHIEF, DIVISION OF ON-THE-JOB TRAINING, BUREAU OF APPRENTICESHIP AND TRAINING

Secretary WIRTZ. Thank you, Mr. Chairman.

There are with me this morning Mr. Stanley Ruttenberg on your right-my left-who is the Manpower Administrator in the Department of Labor; Mr. Hugh Murphy, who is the Administrator of our Bureau of Apprenticeship and Training; and Mr. Henry Przelomski, working with Mr. Ruttenberg and Mr. Murphy, who has been responsible for a good deal of the development of on-the-job training

programs.

I have, Mr. Chairman, a statement which, with your permission and concurrence, I will be glad to file with the committee and summarize it very briefly, turning quickly to whatever questions there may be.

I would ask it be made part of the record on that basis.

Senator KENNEDY of Massachusetts. That is agreeable and it is included in its entirety.

(The prepared statement of Secretary Wirtz follows:)

PREPARED STATEMENT BY W. WILLARD WIRTZ, SECRETARY OF LABOR

Mr. Chairman and members of the subcommittee: Thank you for this opportunity to describe to the subcommittee the "on-the-job training program" being developed under the Manpower Development and Training Act.

My testimony and the description of this program will reflect, and may be influenced by, my strong feeling that the on-the-job (OJT) program is rapidly emerging as the one special training instrument best fitted to meet the demands of the present manpower situation in this country. The reasons for this broad statement can be shortly summarized:

First, the on-the-job training programs have a flexibility about them which permits their meeting an almost infinite variety of worker and employer needs, and makes them a valuable adjunct to other training programs. Second, these programs permit an extraordinary coordination of public and private training functions-with the accent, where it ought to be, on private responsibility.

Third, these programs lead directly from training to actual employment. Fourth, on-the-job training involves a minimum of public expense. Now in somewhat more detail:

As you know, the on-the-job training provisions of the Manpower Development and Training Act permit the Department to contract with employers to establish training programs for the unemployed and underemployed, and for those whose skills need conversion or upgrading.

The use of business and industry facilities for job site training gives practical training to the unemployed for specific occupations. Training conducted on the premises of the employer utilizes the ability and knowledge of industry in training its own employees for its own specific purposes.

On-the-job training also provides an unemployed worker with a job now. The worker, while in training, receives from his employer a wage, fringe benefits,

and virtual assurance of a continuing job after the completion of training. On-the-job training can be combined with classroom instruction where basic knowledge in the occupation is needed.

During the 3-year period ending December 31, 1965, on-the-job training programs covering more than 104,000 people had been approved; approximately 30,000 persons had completed training, and more than 90 percent of these 30,000 were employed as a direct result of this training.

Approximately 7,000 individual on-the-job training projects have been established, covering some 700 occupations, and involving over 6,000 individual employers.

Many of these training programs reached into industries which had never trained anyone before in a formal program. On-the-job training in small establishments initiated many small businessmen in the value and efficiency of training people, a concept utilized mainly by large industrial organizations before the advent of MDTA.

About 10 percent of the training was in the apprentice-entry category. Usually of 52 weeks duration, these apprentice-entry programs prepared the trainee for acceptance and entry into a formalized apprenticeship in a highly skilled craft or trade. The time spent in the apprentice-entry program is credited toward the 3- or 4-year formal program.

We have streamlined our procedures to make it easier for an employer who wants to train one man to do so without having the same paperwork that involves several hundred trainees. We are putting into effect immediately a new short form contract consisting of 2 sheets of paper, replacing the 12-sheet form we used previously.

In national prime contract agreements, we have installed new procedures to permit the prime contractor to approve routine subcontracts and expedite procedures, saving as much as 3 and 4 weeks between agreement and Departmental approval.

We are also negotiating fixed-price contracts, eliminating the need for the employer to keep cost records. Only attendance and payroll records are needed-which must be maintained in any event.

It became obvious to the Department in late 1964 that if on-the-job training was to make wide impact in terms of getting the unemployed back to work in large numbers, the practice of direct program promotion and development with individual employers would have to be augmented.

Greater effort was expended in 1965, therefore, to engage associations, large corporations, labor unions, and established community organizations to sponsor traning programs for their own industry or locale.

How successful this expanded effort proved to be in 1965 is attested by the record. The number of persons approved for training under contracts with community organizations, industrial and business associations, labor unions, and corporations serving as prime contractors for their dealers, totaled more than 33,000 or 60 percent of all trainees approved last year.

CORPORATE SPONSORS

Large corporations became prime contractors in 1965 to coordinate programs among their local outlets, agencies and affiliates located in various sections of the country, or at their main plant.

Among the large companies with large numbers of on-the-job trainees were Chrysler Motors Corporation, the dealer organization for the automobile and aerospace manufacturer, which agreed to train 800 automobile technicians and 200 auto body repairmen; Tidewater Oil Company which will train 1,080 gasoline service station managers at their East and West Coast training centers, and Douglas Aircraft Corporation, which will train 386 draftsmen, 80 computer programmers, and 340 Fortran analytical engineers.

Under the Chrysler contract, the firm has a national training coordinator and several assistants traveling to the dealerships to start programs for as many mechanics and repairmen as needed. Upon completion of the 52-week on-the-job training program, the trainees are admitted to formal apprenticeship programs without further Federal assistance to the dealer for the continuing training.

ASSOCIATION PROJECTS

National service organizations and industrial trade associations took a more active role in developing on-the-job training programs for their memberships in 1965.

Twenty-one associations joined the Department of Labor in developing programs for more than 13,500 trainees.

The largest association contract in 1965 was written with the Hospital Research and Educational Trust of the American Hospital Association to train 4,000 persons in the non-licensed, subprofessional hospital occupations. These jobs included nurse aides and orderlies, ward clerks, cashiers, therapy assistants, diet kitchen aides, and boiler-room helpers, among others.

The Diaper Service Industry Association will train 700 unemployed as launderers and delivery route salesmen, many of them recruited from among so-called neighborhood youth corps "graduates."

Tweleve State associations of oil marketers and jobbers are developing training programs for more than 4,000 trainees as service station salesmen in Arkansas, Colorado, Florida, Kentucky, Louisiana, Michigan, Minnesota, Missouri, Nebraska, North and South Dakota, and Wisconsin.

It will perhaps be helpful to set out in a little more detail the way this type of contracting works through a large national association representing hundreds of small business enterprises in a specific industry. The National Tool, Die and Precision Machining Association's contract with the Department is a good example. Nearly 1,200 tool and die maker apprentices are scheduled for training in hundreds of shops in 26 cities under this contract. We are about to expand this contract to train about 1.100 more.

This national association represents local associations made up of small tool and die shops, some having no more than 10 employees. The national association's training coordinator moves into an industrial area where a local association of tool and die shops exists. Agreement is reached by the shop owners that there is need for 45 additional tool and die makers among the 18 shops in the area.

Working with the shop owners, the coordinator helps select one or more tool and die instructors to be paid wages out of the Federal allocation. He also arranges for classroom instruction with the local vocational school.

The 45 trainees are selected by the employers from a large panel of qualified candidates selected by the local State Employment Service office. The men are distributed among the shops, some shops hiring one trainee, others two, and so on. The local instructor then establishes a schedule, moving from shop to shop as he instructs the trainees.

The tool and die trainees are paid from $1.65 to $2.00 an hour when they begin training. The employer, who has signed a subcontract with the Labor Department through the national association, is reimbursed a portion of the training cost.

We have on-the-job-training programs with two other associations which involve training of 2,500 mentally retarded. The Institute of Industrial Launderers' 500 members will develop training programs for 1,000 mentally retarded persons to work in laundry service occupations. Another 1,500 mentally retarded persons will be trained under the sponsorship of the National Association for Retarded Children in retail service occupations in large department stores.

COMMUNITY PROJECTS

Perhaps one of the most significant developments in 1965 was the increasingly important role played by community groups in on-the-job training promotion and development. These programs accounted for nearly 20,000 trainees in more than 50 cities in 1965.

Community organizations such as the Urban League and a variety of special new organizations created by mayors, civic leaders, community action programs, and minority group representatives recognized the scope of the assistance MDTA offered and took up the problem of training the unemployed in earnest in local areas.

The Urban Leagues in 24 cities agreed to find on-the-job training opportunities for 7,000 people in their communities by seeking the participation of individual employers who would provide the training, recruit the trainees, and develop and administer the sub-contracts with these employers.

The Urban League program in Pittsburgh is illustrative. One project, for 113 trainees, has already been completed; and the Pittsburgh League was awarded a second contract last month to develop training opportunities for another 400 unemployed. Twenty-eight of the first 113 trainees had had no work history, 21 had been on welfare, and the remaining 64 had worked sporadically as laborers, porters or domestic earning an average of $18 a week before

training began. Jobs were found for 113 floral designers, keypunch operators, machinists, upholsterers, warehousemen, floor tilers, meat cutters, auto body repairmen, and stenographers. The average weekly wage of the entire trainee group rose to $62 a week upon completion of training.

The NAACP has been working with the Urban League in Cleveland in operating a pre-job training program for 1,250 youth aimed at preparing youth 16 to 25 years to successfully pass apprenticeship examinations and enrollment in MDTA programs, many of which will be OJT.

The Department has worked closely with various local Mexican-American organizations to promote and develop OJT programs.

Thirty-eight other community groups, organized principally to use the assistance offered by OJT-MDTA, accounted for nearly 13,000 other on-the-job training trainees. These groups included the San Diego Mayor's Committee for Jobs, Inc., Utah Employment Training Committee, Chattanooga Full Employment Committee, Mexican-American Community Services Project, and Detroit's Committee on Total Action Against Poverty.

Nearly $12 million was allocated in OJT funds for these community projects in 1965.

The Department has assigned a representative from the Manpower Administration to the Equal Employment Opportunity Commission to lend expert advice to employers and unions seeking to develop training programs under MDTA.

About 20 percent of the OJT trainees in 1965 were non-white.

ORGANIZED LABOR PARTICIPATION

With the need for more workers and the retraining or upgrading of skilled workers in many industries becoming increasingly apparent during the year, more and more labor organizations began to participate in OJT-MDTA to help meet the demand for skilled workers capable of meeting new skill requirement.

Joint labor-management and labor-sponsored on-the-job training projects covered nearly 6,000 trainees entering apprentice-entry and retraining or upgrading programs. These programs were under the aegis of 24 different labor or ganizations and joint labor-management groups in 28 States.

EXPANDED SCOPE OF TRAINING

More and more of the potential trainees screened and tested by the employment services are now found to have low literacy levels or other deficiencies. This was a natural consequence of the continuing decline in the unemployment rates in 1965. As more and more of the better prepared unemployed were as similated into jobs, either on their own or through MDTA training, the less prepared and educated presented a greater challenge as OJT-MDTA prospects. Good cooperation between local educational and social service agencies enabled on-the-job training developers to expand the so-called "coupled" program. On-the-job training is coupled now with classroom training to provide literacy and other related instruction to prospective trainees. About 29 percent of our on-the-job training programs in Fiscal Year 1967 will be of the coupled variety because of the decreasing unemployment rate. We are reaching more and more of the hard-core unemployed. Indeed, in Fiscal 1967, 65 percent of the trainees will be from this group.

The Department also has liaison officers working closely with the Office of Economic Opportunity to coordinate and utilize the youngsters moving out of the Job Corps and Community Action Programs for actual training on the job with employers who have worthwhile and stable occupations which need workers.

The youngsters who "graduate" from the Neighborhood Youth Corps will be given first crack at openings in on-the-job training programs. This is being written into our on-the-job training contracts as a sensible and logical step in moving disadvantaged youngsters up the economic and social ladder.

The question is raised whether some of the jobs in these programs are of the dead-end variety, jobs without futures—or whether they are training for nothing. There have been, for example, about 3,250 men trained as gasoline service station attendants. But what this means, typically, is that a young, unemployed man, usually a school dropout with little or no employment experience, is hired under one of these gasoline station projects. His training, usually of 10 weeks' duration, covers the importance of his physical appearance and cleanliness, his manner of speech and address when he approaches a customer, oiling and lubricating