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trainees that can be selected. We have one fellow now who is going to make an awfully good stonecutter, but we have to teach him basic mathematics, so he can read a ruler. It is part of the course, but we have to go even deeper to help this young fellow along, and anything that can help the small manufacturer, as well as the large, would be very beneficial.
Senator KENNEDY of Massachusetts. Concerning the tax incentive can you see the problem that would arise with the Federal Government trying to determine whether a tax credit should be given to a small company for a given training effort; whether a tax credit should be given or whether the small independent company would carry out the program anyway.
Mr. WHITE. They would be doing it, but maybe not with the frequency that they might do
Senator KENNEDY of Massachusetts. How are you going to determine that? This is the problem. You feel, as a small manufacturer, that you can determine accurately what would be the realistic expenses that would be entailed in such an undertaking?
Mr. WHITE. As I mentioned, we have found that the larger manufacturers who are doing most of the training, and the trainees, either upon becoming journeymen or even during the course of their 3-year apprenticeship, some smaller manufacturer, who either did not have the complete facilities or the desire to go through the break-in probation, initial period with an apprentice, would pirate him away.
It is something maybe a little unique in our industry up there, but it
goes on. Some manufacturers do not want to be bothered with it, but we have told them that if they were to all put on maybe just one apprentice, it would not overburden the labor supply and our union representatives would not be up in arms over such a thing, but it would cut down this pirating and take the load off of the what we refer to as the larger employers in the industry, and hopefully spread it around.
Exactly what guidelines might be established to define whether it is additional training or just something that would normally be done, I hesitate to go too far on that one, but I think it could be done. Senator KENNEDY of Massachusetts. Senator Pell? Senator PELL. No questions. Senator KENNEDY of Massachusetts. I want to thank you very much for appearing, Mr. White. We appreciate your comments. Mr. WHITE. Thank you, Senator. Senator KENNEDY of Massachusetts. We appreciate your appearing before the subcommittee.
Our final witness this morning is Mr. Adolph Holmes, who is the associate director of the National Urban League.
Mr. Holmes, we are delighted to have you here and welcome you to
NATIONAL URBAN LEAGUE, NEW YORK CITY, N.Y.
The National Urban League is a professional community service
zens. It is nonprofit, nonpartisan, and interracial in its leadership and staff.
In that I have a prepared statement which will be submitted as a part of the record, I will attempt to summarize those things that we have found from our experience in working with on-the-job training projects
Senator KENNEDY of Massachusetts. Your whole statement will be included in the record.
(The prepared statement of Mr. IIolmes follows:)
PREPARED STATEMENT OF ADOLPH HOLMES, ASSOCIATE DIRECTOR, NATIONAL URBAN
LEAGUE, NEW YORK CITY, N.Y. My name is Adolph Holmes. I am the associate director for Job Development and Employment of the National Urban League in New York City. The National Urban League is a professional community service agency founded in 1910 to secure equal opportunity for Negro citizens. It is nonprofit, nonpartisan, and interracial in its leadership and staff. The National Urban League has afiliates in 73 cities and 30 States and the District of Columbia. It maintains national headquarters in New York City.
A trained professional staff conducts the day to day activities of the Urban League. This staff throughout the country numbers more than 800 paid employees whose operations are reinforced by 8,000 volunteers who bring expert knowledge and experience to racial matters.
We appreciate this invitation to appear before your subcommittee to add to your body of knowledge, the information and evidence that we have accumulated over the years as experts in the area and subject which are now before this Committee.
Since its inception, over 50 years ago, the National Urban League has applied its professional know-how in the development of equal employment opportunity for the minority citizen. Presently, its program of Job Development and Employment is recognized, across the nation, as a major contributor to the reduction of the economic lag confronting the disadvantaged citizen. Through the National Skills Bank Program we have successfully increased job opportunity for skilled, underemployed, underutilized, or unemployed Negroes. Fifty-nine Urban League cities joined with the total community in registering 33,692 persons and placing 5.320 at skill levels from professional to the unclassified. The success of the Skills Bank Program continues as business and their associates, labor representatives, lay citizens and educational institutions actively participate to place in jobs the talented discovered in this personnel search.
It has long been the Urban League's contention that approximately 60% of the minority group work population would require special effort and consideration to reclaim them for the job market. This need was validated through the Skills Bank Program. Many persons were uncovered during this talent search who, with additional education and/or training, could fill the demanding national requirement for skilled workers. A program to service the needs of this segment of the minority group manpower resources was sought by the National Urban League. A partial solution was found under the provisions of the Manpower Development and Training Act (Public Law 87-415) enacted by the Congress and its subsequent amendments. This Act permitted the federal government to fund training programs submitted by private and public agencies for the improvement and utilization of the Nation's manpower resources.
Its efforts were focused upon the disadvantaged worker: an area that reflected the concern of the Urban League. The legislation allowed for an additional component to the Urban League's established Job Development and Employment Program and provided the movement with the capability of servicing the emplosment needs of a greater portion of those who need this kind of assistance.
Provisions of the Act permitted the National Urban League and its affiliates to develop in cooperation with the Bureau of Apprenticeship and Training and the Employment Service of the Department of Labor, On-the-Job Training Projects which have as their goal the training or retraining of over 6,000 workers. As of December 30, 1965, twenty-five Urban League affiliates had placed 1,198 trainees in new and rewarding positions. Thirteen additional Leagues have submitted proposals that raise the Urban League's goal to 8,000 trainees for placement.
The increasing participation of Urban League affiliates is the result of the value the program has in servicing the needs of the unskilled workers. Illustrative of this point is the final report of the Pittsburgh Urban League OJT Project. This Project completed its first year in September 1965. The excellent results of their program is detailed below:
Weekly earnings of applicants before OJT Previous weekly rates :
$ 0 to $15. $16 to $30. $31 to $45. $46 to $60. $61 to $90_
Number of trainees
61 10 13 18 2
Weekly earnings of applicants after OJT
$40 to $65_--
Number of trainees
75 21 7 1
Pretraining occupational status
No work history---
Number of trainees
28 34 14 5 2 21
Heads of households with consistent work history-
8 40 31 13 12
3 3 6
104 Average weekly earnings of applicants before OJT.
$18 Average weekly earnings of applicants after OJT.
$62 Average annual earnings of applicants prior to OJT.
$936 Average annual earnings of applicants after OJT..
$3, 224 Presently, Urban League OJT Project staffs, located in 25 cities, are engaged in the two-fold task of developing employer participation through OJT subcontract negotiation, and concurrently recruiting, selecting and referring qualified disadvantaged applicants to the training positions. Through their efforts, valuable experience and additional insights into the problems have been gained. While the task of achieving the participation of the disadvantaged applicant was recognized as a challenge initially, equally as challenging has become the need to stimu ate greater response from the employer. Urban League experience has shown that the majority of employers participating in the program are those hiring 50 or fewer workers. For this particular group of businessmen who are willing to take the risk, it has helped them to train a less than qualified candidate because of the feature of payment for supervision. Yet, for each contract nego
tiated, it is our belief that many more would have participated had there been some other way to minimize the cost. Apparently, some device is necessary to stimulate greater interest on the part of employers to enter into contractual agreements for other than repayment for supervisory time and materials.
Experience suggests that the knowledge and progressive businessman, in each of the communities served, accepts the program and will participate. However, an analysis of field reports is indicative of the overall business response of these communities. There is an attitude expressed by some businesmen which works to the detriment of increasing the number of sub-contracts. Often, employers display a reluctance to enter into contractual agreements because of the voluminous detailed paper work and reporting procedures involved in the process. Therefore, there is an additional group of potential contractors who would enter into the establishment of training programs, which could be credited under the provisions of the Act, without reimbursement. At the present time, no provisions exist for this group.
From our experience, we have delineated another major problem, namely publicity and promotion of the program operations. We feel there has to be broader dissemination of the manpower development goals, on the local level. Such a campaign would be directed to employers and applicants alike. Many businessmen and potential applicants remain uninformed of the project advantages and opportunities. While the local projects are making an effort to publicize their activity, their effectiveness is hampered by a lack of funds for this purpose. Since promotional funds are not an allowable item in many Urban League OJT Contracts, this phase must rely upon voluntary efforts which are not always coordinated and effective. In many instances, the agencies' budgetary limitations preclude the extensive use of the mass media deemed necessary to reach the desired audience.
Further prime contracts negotiated on a one year basis suffer the problem of locating staff to serve for that period and affect the length of time for which sub-contracts may be written. As an illustration, a prime contract written on July 1st would suffer in negotiating sub-contracts after January 1st. Thereafter, all sub-contracts would necessarily have to be less than the allowable 26 weeks. Therefore, it is the opinion of the National Urban League that some effort should be made to restudy the feasibility of this limitation; not only for the sake of providing security for OJT staff personnel, but also to ensure the success of the objectives of the Manpower Development and Training Act.
The experience of the Urban League in OJT Programs underscores the need for additional incentives to motivate and encourage greater participation by employers in a national training and retraining effort of the nation's manpower. At a time of critical skill shortages in the nation, the government cannot he expected to fulfill this need alone. It is apparent that the private sector of the economy must be given the incentive to develop and conduct occupational training to reduce these shortages. One method that would contribute to greater participation in training would be the introduction of a federal tax credit for business and industry to induce them to invest in human capital. This form of rebate would also do much to enhance our objectives of building the Great Society. It would lower the unemployment rate and cause each trainer worker, spurred by the action of the employer, to reach his full potential ... namely the American Dream.
Mr. HOLMEs. We have at the present time approximately 26 onthe-job training projects in operation around the country, and based on our experience in the operation of these projects, our efforts are being felt.
First, we feel that there has to be some consideration given to the amount of paperwork necessary to implement the projects.
Second, we feel that there has to be some publicity and promotion to encourage the employers, particularly the smaller employers, to take advantage of this particular piece of legislation which enhances his business.
Third, we feel that not only the smaller employers, but also the major employers, if given some kind of tax relief, could and would absorb some of the costs that are involved in the training. It is our concern and our opinion at the moment, based on our experience, that it is not
fair to expect the governmental sector of the economy to absorb the total cost of training the Nation's manpower. We should also look to the private sector of the economy to absorb some of this cost in that the present corporate tax structure would then allow for this to be some portion of their tax relief.
We think this is one of the ways that could be exploral to determine whether or not it is feasible and we believe it is to begin to do much more in terms of reducing the unemployment rate below the present 3.5-percent level instead of training 400,000 people for the coming year as the act provides.
We think that where the Bureau of Apprenticeship and Training and the Employment Service have a role to play as the act is promulgated, it does not allow for those agencies that are joined to participate in the act to participate to their fullest extent. This is due to the monumental reams of paperwork that are involved, not only by the agencies involved, but also by the employer.
So our recommendation for consideration by this committee would be that publicity and promotion concerning this act be disseminated on a broad basis to as many employees as possible explaining the details proposed by the participating agencies would be most adFantageous; secondly, that if there is some form of relief that could be granted in some sort of way to where it included something above and beyond the supervisory cost, that we would have more participation; and thirdly, this then will allow for the private sector of the economy to begin to tackle the problems of skill shortages.
Senator KENNEDY of Massachusetts. Mr. Holmes, I think the fact that the effort is made through the Urban League by the MDTA is one of the more encouraging factors, utilizing a group such as the Urban League to help implement on-the-job training programs, and I think the fact that you have come down here and indicated what you have today bears out that this is an important aspect of the program.
You have mentioned the interest in providing for a tax incentive to help stimulate increased activity in on-the-job training programs.
I would like to have you address yourself to this observation which I shall make: That under the on-the-job training programs as they are set up now, it was testified that the Federal Government worked through the equal employment opportunity provisions and other provisions to at last indicate national policy of supporting equal opportunities for all the minority groups. By focusing attention on this problem, there can be forceful Federal action in this area.
I am wondering whether you see the same result if we provide tax incentives to companies or corporations who, not being accountable to the Federal Government, would be able to pursue current employment policies which might not be as sympathetic as a national administration that believes fully and strongly in the provisions of equal opportunities for all citizens?
Mr. HOLMES. We have found that of some 622 employers participating in the various cities, most of them are employers who hire 50 or less people, and therefore are not covered at the present time by the Civil Rights
Act of 1964. Therefore, it is our opinion that the larger employers who have training programs of their own that fall under the purview of that act are already participating in their way, but these employers that we have dealt with so far do not. But I think