WASTEFUL DUPLICATION UNDER DEMOCRATIC ADMINISTRATIONS

In the last few years the Kennedy-Johnson administration has stayed up late nights devising overlapping and wasteful Federal training programs. Some were conducted under the preposterous Area Redevelopment Administration Act, more commonly known as the area reelection administration among certain members of the majority. Others were spawned by the Vocational Education Act, and others by the social security amendments, and others by the Manpower Development and Training Act. When the leader of the so-called Great Society came forth with his hydraheaded poverty monster, containing not one but at least five programs purported to be training programs, I thought even the fertile imaginations of the administration theorists had been exhausted. From past experience, however, I have learned never to jump to such a plausible conclusion. Needless to say, in its haste to concoct new and slightly different-but always overlapping-training programs, the administration has consistently overlooked the resources of the greatest job training industry of them all-the free enterprise system. The bill which I am joining to introduce today will, if enacted, at least attempt to put the emphasis back where it belongs. I am happy to join with my distinguished colleague from Missouri in sponsoring this sound Republican-conceived measure.

Mr. SCHNEEBELI. Mr. Speaker, of the six categories of allowable training expenses under the Human Investment Act, the first is the wages and salaries of apprentices in registered apprenticeship programs.

ENCOURAGING APPRENTICE TRAINING

It is fitting that apprenticeship should be first in order, for it is a type of job training which has proven itself over not decades but centuries in America. Examples of apprenticeship agreements dating from as early as 1640 have been discovered. Perhaps America's most famous apprentice was Benjamin Franklin, who began his apprenticeship with his brother in the printing trade in 1718, at the age of 12.

Apprenticeship has a number of advantages over other forms of skill training. Its combination of on-the-job training and related classroom instruction are a proven, effective means of passing on skills and knowledge. The apprentice earns while he learns, moving to a higher wage as his skills increase. Apprenticeship has an extraordinarily high investment to yield ratio, and a built-in capacity for adjusting to changing patterns of skills and demands.

George Meany, president of the AFL-CIO, has stated very forcefully the recognition by labor leaders of the need for increased promotion of apprenticeship:

"There is general agreement," Mr. Meany said, "that the demand for skilled workers will grow very rapidly in the next decade, while the opportunities for unskilled workers will continue to shrink. Therefore our interest-and the national interest-must look to an across-the-board increase in apprenticeship training."

Mr. Meany's support of apprenticeship programs has much company within the labor movement. The Metal Trades Department of the AFL-CIO, for example, reported to that body's fifth convention that "apprenticeship continues to be the only sure way to produce highly skilled workers with a complete craft competency capable of coping with the increasingly complex present-day trade and industrial developments.'

The Human Investment Act, quietly, indirectly, and without Government interference, will at last give private industry a real incentive to expand its apprenticeship programs. I am happy to join in sponsoring this important legislation, and commend the gentleman from Missouri in taking this initiative today. Mr. COLLIER. Mr. Speaker, I, too, am happy to join as a sponsor of the Human Investment Act.

Like my distinguished colleague from Pennsylvania, Mr. Schneebeli, I am happy to see that this act gives a real incentive to the promotion of apprentice training. Many business and labor manpower experts have long recognized the need for more attention to these time-tested programs. Prof. Felician F. Foltman of the New York State School of Industrial and Labor Relations, for instance, wrote in the January 1964 issue of Monthly Labor Review, that "some way should be developed to provide financial assistance for training apprentices." A. J. Hayes, now retired as international president of the International Association of Machinists, hit the nail on the head as early as 1961 when he said before a House subcommittee:

"I would suggest that the possibilities of encouraging apprenticeship programs through special tax inducements both to the employer and perhaps to the apprentice as well *** ought to be seriously explored."

Presently, under the 1937 Fitzgerald Act, the Federal Government, through the Bureau of Apprenticeship and Training, provides technical assistance in promoting the conclusion of apprentice agreements. The costs, however, of the training are borne entirely by employers. Part of those costs, at least after the first 6 months, are recouped by the apprentices' growing productivity. Now, if the Human Investment Act is enacted into law, America's private employers will be given an unobtrusive but genuine incentive to expand these proven programs.

I am pleased to take part in this important Republican initiative, and commend the gentleman from Missouri for his part in making this presentation possible.

ON-THE-JOB TRAINING ENCOURAGED

Mr. FRELINGHUYSEN. Mr. Speaker, I am happy to join my colleagues today in sponsoring the Human Investment Act. Passage of this legislation would be a significant step in broadening the opportunities already available for improving the skills of our citizens. Among the most promising ideas for governmental aid in job training are the provisions of section 204 of the Manpower Development and Training Act, enacted in 1962. Under this section the Secretary of Labor is authorized to enter into agreements with public agencies, private employers, unions, trade associations, or similar groups to provide on-the-job training to persons needing improved job skills. Under a typical contract the Labor Department reimburses the contracting party-usually a private business-for such training costs as instructor's salaries, training materials, technical assistance, books and instructional supplies, enrollee recruitment, and similar items.

During 1964 the on-the-job training program took a major step forward with the negotiation of contracts covering 1,160 occupational projects for 27.605 trainees. This represents a more than threefold increase over the levels of the previous year. For the same year, it should be noted, there were about 110,000 enrollees in institutional programs under Manpower Development and Training Act.

The Labor Department reports that the costs per hour of an institutional training program average around $5, while the cost to the taxpayer of an hour of on-the-job training is on the order of 55 cents. Even when the wages of the on-the-job trainees are added in to this 55-cent figure, it is clear that we are getting twice our money's worth from on-the-job training.

It is thus with approval that I read, in Newsweek of July 19, 1965, the following story:

"A significant policy switch is underway in the Government's manpower training program. Under the direction of Manpower Administrator Stanley Ruttenberg, the Government is giving increased emphasis to on-the-job training Until now, nearly all the training has been done in institutions. In the on-the-job training programs, the Manpower Administration underwrites a share of the cost of training men at specific companies-with the jobs guaranteed. In a sense, the Government subsidizes private company training costs. But manpower officials argue that it is just as defensible to invest in people as it is in new machines with programs such as the investment tax credit."

This bill would directly encourage private firms to conduct more on-the-job training programs, without Government intervention.

Mr. STANTON. Mr. Speaker, I am pleased to join my colleagues today in the introduction of a bill which I feel could make a tremendous contribution to the training of our labor force. The Human Investment Act will encourage business to train employees for jobs which exist in their particular industry in an efficient and practical manner.

I am happy that this bill gives an incentive to employers to make use of section 204 of the Manpower Development and Training Act.

For several reasons this section has not been used as much as it might have been. For one thing, there is far too much paperwork and redtape. Charles Hanna of the California Department of Industrial Relations has written : "Greater use must be made of private industry in skill training * (but) what is needed is more encouragement and less redtape. A Manpower Development and Training on-the-job training program just completed by our agency required 61 pages and the signatures of 15 agency heads."

Because of this redtape, he said, employers have been wary of taking part in the program.

Another reason why these programs have not been more common is a rather strict maintenance of effort requirement involved. Publicity on the availability of the on-the-job training provisions has not been outstanding, and many employers do not even know about them. But certainly one of the principal deterrents to increase on-the-job training programs is the fact that the entire cost of wages of employees in training must be borne by the employer. The Human Investment Act, by providing an incentive to employers in the form of a 7-percent tax credit against the wages of enrollees, should help a great deal to encourage many employers to take a second look at these provisions.

AID TO COOPERATIVE EDUCATION

Mr. TALCOTT. Mr. Speaker, the Human Investment Act which I am sponsoring along with these other distinguished Members today should do much to encourage private business to expand its job training efforts, just as the investment tax credit provisions of the 1962 Revenue Act were useful in expanding investment in depreciable property.

I note that the act among other things will allow an employer to claim the 7percent credit against the wages and salaries of employees participating in cooperative work-study programs. These programs may be at the secondary level, at the college level, or in conjunction with a trade, business, or vocational school. The cooperative plan of training employees in new job skills as a proven way of increasing the Nation's skill inventory. The National Commission on Cooperative Education has estimated that some 40,000 Americans at the postsecondary level are now taking part in regular cooperative arrangements, where there are alternate periods of study and employment. These programs vary from those at Rochester Business Institute, in Rochester, N.Y., where two students share one job, one working in the morning and studying in the afternoon and the other vice versa, to those at Antioch College in Ohio, where the employment and study periods alternate every 3 months.

I am glad to have the opportunity to join in this special order today, and I commend the gentleman from Missouri for his hard work in producing this constructive Republican proposal.

ENCOURAGING TUITION-AID PROGRAMS BY EMPLOYERS

Mr. QUIE. Mr. Speaker, I rise to voice my support of a bill I join in sponsoring, the Human Investment Act of 1965.

Among the expenses for which an employer could claim a 7-percent tax credit are tuition payments made by him to a college or to a business, trade, or vocational school. The bill is tightly drawn in this respect. To qualify, the payment must be made to an institution of higher education as defined in the National Defense Education Act, or to business, trade, or vocational schools on the approved list of the U.S. Commissioner of Education. Furthermore, no credit could be claimed for courses of a managerial, supervisory, professional, or advanced scientific nature, nor could credit be claimed for tuition payments for courses not directly related to the job skill needs of the person taking the course. This latter provision properly reflects the intent of the sponsors to focus attention on upgrading the job skills of those working their way up the skill ladder, not those who are in middle management or professional positions, or those who are taking courses for their own entertainment, irrelevant to their actual or prospective jobs.

If an employer thought a certain employee could increase his productivity by additional training at a vocational institute, for instance, this bill would give that employer an incentive to pay the employee's tuition fee for the new training. There is an extremely wide range of schools from which the employer may choose. The beauty of this approach is that the Government does not step in and tell the employer or the employee where he must go for his training-the tax credit works quietly behind the scenes.

Mr. Speaker, almost every large company in America and a great many of the smaller ones now have tuition payment programs for their employees. This bill gives this private enterprise program a shot in the arm. I hope that before long we will see this principle enacted into law.

MORE TRAINING THROUGH HOME STUDY

Mr. MIZE. Mr. Speaker, the Human Investment Act now being discussed is a very significant Republican effort to enlist private business into the great national business of upgrading the Nation's job skills, and I am proud to have

the opportunity of joining with the gentleman from Missouri [Mr. Curtis] in introducing it today.

Members will notice that this bill gives employers an incentive to pay the costs of home study training for their employees. The list of distinguished graduates of home study schools is lengthy. On it one can find such names as former Secretary of Commerce and Governor of North Carolina, Luther Hodges; former Secretary of the Navy Dan Kimball, former Senator Ralph Flanders, Donald Henderson, chairman of the board of the Sheraton hotel chain, and G. L. Phillippe, chairman of the board of General Electric.

Over the years home study training has been used by thousands of Americans to get the training they needed for a new start in auto repair, air conditioning, radio and television work, and hundreds of other skilled trades. I am happy to see this recognized by the bill we are introducing today.

ENCOURAGING GROUP INSTRUCTION BY EMPLOYERS

Mr. FINDLEY. Mr. Speaker, perhaps the most common type of employer training program outside of ordinary, informal on-the-job training is organized group instruction, including classroom instruction. The expenses to the employer of conducting these programs are expenses which would be eligible in most cases for the 7-percent tax credit provided by the Human Investment Act. By thus encouraging private enterprise to expand and improve its group instruction, the Human Investment Act would make a real contribution toward the across-the-board upgrading of the Nation's inventory of needed labor skills. It is worth pointing out that the employer need not conduct the program on his own company premises to be eligible for the credit. All that is necessary is that he pay the costs of the program. The credit would apply to instructors salaries, books, training materials, and similar expenses involved, but would not apply to the wages and salaries of the personnel being trained.

Similarly, it would be possible for an employer to claim the credit for training persons who are not employees, provided only that at the completion of training, the person be put on the payroll for at least 3 months. Realistically, however, an employer is not going to train a prospective employee and then cut him loose when the training is complete. The virtual certainty that a nonemployee will become a pay-earning employee after training is one of the strong points of the approach of this bill.

I note also that under the bill an employer could claim a credit toward the wages and salaries of apprentices in registered programs. At the same time he could take the credit against the training expenses involved in operating the classroom instruction parts of the apprenticeship training program. In this respect, then, the bill offers an incentive to apprenticeship in two places. This bill is a sound idea, and I am happy to see so many Members joining to day in introducing it.

Mr. CLEVELAND. Mr. Speaker, it is with great satisfaction that I join my est leagues today in introducing the Human Investment Act of 1965. This legislation is patterned closely on the investment credit provisions of the Revenue Act of 1962, which grants companies a tax credit of 7 percent of the cost of capital investments in new equipment and facilities. Surely, we should do no less for human beings than for machines and buildings.

MOVING UP THE SKILL LADDER

This bill likewise would provide industry with a tax credit of 7 percent on a broad range of expenses incurred in setting up programs designed to train prospective employees for jobs and to retrain current employees for more demanding, and better paying jobs. This bill has been drawn carefully in an effort to meet the increasingly serious problems of unemployment among persons who are not sufficiently skilled to fill positions required by industry in this dynamic and technical age. It is our hope that this program, by advancing workers up the ladder of skills, will open vacancies at the bottom for the unskilled and semiskilled workers who are unable to obtain jobs.

This program is also based on the belief that private industry, over the years, has shown that it can obtain the highest value per training dollar. We believe industry should be encouraged to continue and increase its training activities to meet the national need.

Of particular interest to me is the fact that this bill not only will help areas of high unemployment but should be very helpful in places where there is an

actual labor shortage, which is the case in many sections of my district. In such places, this legislation will give industries an important tool by which to encourage young people to stay in their home areas and to attract others to come in. I believe this program will be an excellent supplement to the Manpower Development and Retraining Act and the vocational training programs in my State.

MINIMIZING GOVERNMENT INTERVENTION IN THE ECONOMY

Mrs. MAY. Mr. Speaker, I sincerely appreciate the opportunity to participate in this special order on the Human Investment Act of 1965, which I am joining my many colleagues in introducing.

One reason this approach is attractive to me is that first, job training by private industry minimizes the necessity for Government intervention and regulation in the economy. Instead of taking money in taxes, paying a number of bureaucratic middlemen and spending the difference on public programs, the tax credit method gives a true incentive to business to accomplish the same ends much more efficiently. The Government does not need to get into the business of screening instructors, determining curriculum, supporting trainees, and other such appendages of Government-run programs, beyond the point of assuring that useful training is in fact being imparted by the employer. Federal-State complications, elaborate placement procedures, and general administrative problems are largely avoided. It is interesting in this connection to note that the British Government, faced with the identical problem in 1963, chose to promote job training through private industry instead of setting up an elaborate Government-operated program. The British Industrial Training Act of 1964 vests responsibility for organizing job training programs with joint labor-management boards, one for each major industry, which use the proceeds from a payroll tax to support training programs conducted by the employers.

This is a good bill, Mr. Speaker. I sincerely hope that it will get very serious consideration by this Congress.

GUARANTEEING JOBS TO TRAINEES

Mr. ELLSWORTH. Mr. Speaker, I am proud to join over 40 of my colleagues in introducing the Human Investment Act. The concept of this legislation represents a dramatic step forward in channeling the mighty resources of private industry into the federally backed battle against the menace of unemployment. I am limiting my remarks to the relationship between training programs and the prospect of employment for the trainee.

It is indeed sad when a young man or woman trains for a new occupation and then, upon completion of the program, discovers that there are no job openings. The sense of discouragement among traines may well account for dropouts from existing institutional programs such as the Job Corps and Manpower Development and Training Act. Under the Human Investment Act, a trainee must remain on the payroll for at least 3 months after completion of training before the tax credit can be claimed. Thus, the training would be directly related to an opportunity for gainful employment. This, Mr. Speaker, is one of the many reasons why the Human Investment Act should be considered and passed by the Congress.

PRIVATE JOB TRAINING FOCUSES ON ACTUAL JOB OPENINGS

Mr. BROYHILL of Virginia. Mr. Speaker, I want to compliment the distinguished gentleman from Missouri on bringing so many of us together this afternoon to discuss the Human Investment Act of 1965, which I am happy to join in sponsoring.

When private industry trains a man it invests in him. That investment is made with the expectation that the trainee can contribute to the company's productivity as an employee following training-else it would be difficult to justify the expense to the stockholder. Thus there is a built-in bias in favor of the employer giving top quality training, carefully designed to prepare the trainee for a position for which a worker is needed. It would make little sense for a firm to train men and women as a public service project, and then see its investment wasted because the company has no appropriate job openings. Speaking on this point, Prof. William Faunce, of the Labor and Industrial Realtions Center of Michigan State University, has said: "A retraining program which did not involve retraining with respect to specific job openings is not a meaningful retraining program." Here training by private industry has a great advantage over Government-run programs.

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