Moreover, we find that our Manpower Development and Training Act supported instructor-coach system of weekly training calls would be of immense help to some apprentices from disadvantaged backgrounds if we were able to extend this psychological support and intensive training effort beyond the first year of our 3-year apprenticeship program.

Our association in February previously went on record before this same committee in support of a Manpower Development and Training Act amendment, now passed, to lengthen the training period to 2 years. In spite of this we now find the new $570 average training cost goal is forcing present 1-year programs to consider drastic reductions in length as well as in quality.

3. With only 16 percent of the Manpower Development and Training Act appropriation being allocated to OJT and 84 percent tagged for institutional training, it is impossible for our organization to understand the logic behind the new requirement that the institutional portion of our programing as well as the training allowance during this vocational school phase, come out of our OJT State quota, and further pull down this $570 average OJT figure. In our own case these costs constitute about 25 percent of program expenses. It's appalling to observe that some heavily financed institutional programs go begging for takers while our OJT programs, which can recruit their own disadvantaged trainees and guarantee them jobs, are not only short of funds to initiate programs, but must give up approximately 25 percent of their existing allocations. This gross inequity should be corrected immediately.

4. Present selective service policies, varying from each locality, are making it most difficult to convince prospective employers to hire apprentices. Most employers wish to have assurances of at least a year of productive work out of their training investment. The interagency committees on selective service policy should be directed to formulate some standard department policies in the broader concept of national interest. Naturally, any deferment policy would not be expected to apply to short-term training programs of secondary skills.

Our association feels that an apprentice, particularly one from a deprived background, who has completed 1 year of an intensive Manpower Development and Training Act OJT financed apprenticeship is correctly motivated toward responsibility and could be rated as a specialist in any branch of the service, eventually give our Defense Establishment a high return on such a deferment policy.

5. The enthusiastic support of our organization for OJT is confined to meaningful OJT programs. Unfortunately, most small busines establishments, particularly those in the service trades, which offer some of the greatest potential for new job opportunities, are incapable of setting up and following through a significant OJT program without continued and close instructional assistance and supervision.

There is a dangerous trend on the part of some Government agencies and community action agencies to “buy” job placements instead of creating a real training structure in these firms. It is far better to apply part of the Manpower Development and Training Act funds for the services of a traveling instructorcoach and a smaller amount for reimbursement of the training establishment than have the OJT funds used solely for reimbursement of the establishment. In light of our own association experience, we would like to emphasize that the presence of an agency OJT coordinator insures the completion of training paperwork but in no way performs the vitally important instructional function. 6. Some administrative procedure must be created to facilitate the flow of paperwork in processing new programs. With so many agencies and levels of Government participating in advance approvals, intolerable delays soon become the commonplace rather than the unusual.

For example, where our State Department of Education Manpower Coordinator is exceedingly cooperative, the degree of cooperation varies strongly in each regional vocational school. If a school does not have adequate facilities to offer preapprenticeship training then someone in authority must have the right to move forward within a week to investigate leasing of private facilities, acceptable to the OJT contractor. The settng of time limits on each processing level would be administratively helpful.

While on the subject of improvements in OJT administrative procedures, the lack of any assurances that funds will be available after 6 months or a yearof advance promotion work can be very frustrating.

Manpower Development and Training Act. Cook-chef institutional on-the-job apprentice training program cosponsored by the Associated Restaurants of Connecticut and the Connecticut Chefs Association. Supervised by the Bureau of Apprenticeship and Training of the U.S. Department of Labor and the State labor department, division of apprentice training, in cooperation with the State bureau of vocational education

Informational bulletin for guidance teachers, social workers, and community leaders

For further information: Associated Restaurants of Connecticut, 179 Allyn Street, Suite 305, Hartford, Conn.

PROGRAM

Cook-chef basic institutional training, 6 weeks of classes (210 hours) for young men (18 years and above to early thirties) using the new coach-instructor system (small class instructional setup with same instructor moving out on the job as traveling training supervisor for remainder of the year (2,203 hours). Job is guaranteed by the restaurant association at end of 6 weeks schooling. Students receive training and travel allowances where needed during 6 weeks of school. Wages start on 7th week when trainee commences on-the-job training; $1.25 initial wage will rise to minimum of $1.70 by the 46th week of work. The program is a 3-year apprenticeship which aims successful graduates to a minimum annual salary of $7,000 between the fourth and fifth year of training and work experience.

ELIGIBILITY

Preferably male, 18 years to early thirties. (The median age of the present class is 21 years, a mature 17 or an alert 38 will not be ruled out.)

Unemployed and some underemployed; whites, Negroes, Puerto Ricans, equally preferred.

TRAINING GOALS

Traineers are being groomed for responsible supervisory positions, not just any kitchen job, and should have basic intelligence to move ahead and no felonies on police record. However, driving offenses will be overlooked. Provide new skills and new vocational training and upgrade present skills. Program will guarantee job placement and future full-time jobs. Maximize learning potential of culturally deprived and disadvantaged persons who, once accepted, will not be dropped for personality reasons, but rotated around numerous restaurants until a favorable learning situation is matched to trainees' potential. Help meet great manpower shortage (needed 75,000 new positions in food services each year).

PROCESS FOR ENROLLMENT

1. Registration and testing at local office of Connecticut State Employment Service.

2. Personal interviews with teams made up of full-time training personnel of restaurant association, chef association officials, and representatives of future employers and Federal and State apprenticeship training agencies. 3. Physical examination.

PAY SCALE

Pay: $1.25 an hour to start (at end of 6 weeks of schooling); $1.40 an hour after 14 weeks on-the-job training; $1.55 an hour after 30 weeks on-the-job training; $1.70 an hour after 46 weeks on-the-job training; similar stepups for second and third years of program.

(A successful trainee should be earning a minimum of $140 per week as a first cook or chef shortly after end of apprenticeship program-between the fourth and fifth year of training.) All trainees who have completed first year of Hartford's program are making between $81 and $110 in their 14th month of training.

STATEMENT OF JOHN D. DEWHURST, PRESIDENT, ARROW TOOL CO., INC., WETHERSFIELD, CONN.

Mr. DEWHURST. I really appreciate the opportunity to be here this morning and get some of our views before this subcommittee about this training problem.

In addition to the testmony that you have a copy of, I also have a copy of a plan which I would also like to have entered into the record and then describe some of this in my own words.

To get to the point of this whole problem, industry is the place where the majority of training has to be done. Institutions may bring people to the point where they can be trained, get them to the point where oftentimes they know what the job is about, but they do not know the details.

Our association has come to believe the industry must be made a more effective part of the skill creating structure of the Nation, if the private sector of the economy is to provide jobs for unskilled youth, minority group members and all of the other unskilled and unemployed.

After all, industry is the place where the jobs are, where the machines are, where the materials are. It is a true-to-life situation. It is not a make-believe situation.

How many times we have observed in the public school sector makebelieve situations with no true relationship to what job content really is. This includes not only the manipulative skills that are involved, but some of the psychological barriers that exist in job situations.

For instance, a person from a minority group might have that barrier before him, so that he feels that he may not be treated fairly. On the other hand, an employer might feel that the minority group coming into his plant may cause some problems, may cause upsets amongst current workers. This kind of barrier can only be overcome by onthe-job training daily true-to-life situations.

Now, that is one facet of the reason why on-the-job training to me is most important and deserves much more attention than it has been getting from the standpoint of, shall we say, subsidies.

In industry we have said the jobs are there, the materials are there, the machines are there. We also have an additional problem of providing instructors. Whether these instructors be journeymen from the highly skilled ranks or whether they be teachers who have been trained in institutions how to teach and then are brought into industry with the necessity for them to learn the job content so they can probably teach, or on the other hand-if we start off with a highly skilled individual who we have chosen by some device and then try to see to it that he learns how to teach. Here there is a cost of training the trainer.

These are very real costs that exist and these costs are distinct deterrents to companies doing more training.

I am not sure of the statistics as to the percentage of large companies versus small industry, by the Small Business Administration's definitions, but as I recall it, it is somewhere in the neighborhood of 85 or 90 percent of all-employment is in small companies, and these are not the companies, as you know, that are making $50,000, $100,000 or $2 million a year profits. These are companies that are getting along year after year on break-even or small amounts of profits be

cause they have the very distinct problems of having been started from scratch, in the cellar oftentimes. The principals have been trained as workmen and just because they have gone into business does not necessarily make them businessmen and they never get to the point where they make any real money, and it is a constant struggle.

The 1962 tax credit was a good start toward giving some relief and encouragement for incentives.

I would like to bring your attention around to this tax credit proposal. There has been mention made of it this morning. I first brought it up at a Federal Committee on Apprenticeship meeting in January of 1964 and at that time proposed to that committee that such a course of action, a tax credit for improving the quality of training, not just the quantity game, because we have all seen how badly the goods we buy today can become.

We complain about the house that we buy and the things that are poorly made, and this is merely because the quality of the training of those people has not been paid attention to.

I maintain that if quality of employees is brought up in the first instance, that this will raise the whole economy and encourage employers to put on more people and get deeply into the training game. Under the tax credit proposal that I had suggested to the Federal committee, we had listed certain itemized items that would receive consideration for tax credits-tuition fees, training aids, cost of training directors on a full-time basis, the cost of full-time instructors, perhaps 5 percent of a foreman's wage that might be construed as being a payment against instructional time.

However, I personally believe that the 7 percent that is being discussed is not significant in that if we take a case, and these figures are something that I have been working with a little bit earlier if we take an employer with a net income of $50,000 after deductions, but without having deducted any training costs, this employer would be in the 50-percent tax bracket and his tax would thus be $25,000.

If the same employer spent $1,000 on training, his net income would be $49,000, making his tax $24,500. The actual cost to him of his training program, therefore, amounts to $500, and if a tax credit was applied directly to the tax of $24,500 without any adjustment, the employer's tax would be reduced by another $70, to $24,430.

I do not think that a $70 return is the type of thing that is going to encourage an employer to really go all-out and do the kind of a job

that has to be done.

Now, to continue this example a little bit further. If an adjustment were made in tax deduction and credit provisions similar to that of the investment tax credit provisions of the 1962 amendments, the employer's tax would be $24,465, a saving of only $35 under the tax payable under the present business expense deduction provisions.

The point of this whole thing is that the skills that go into people, the skills that people learn, that they are taught on-the-job, belong to them they do not belong to the employer, and they never should.

The mobility factor was mentioned a little bit earlier this morning, but I would like to point out that oftentimes in industry, because of any number of reasons, after having spent thousands of dollars on training a particular man for a particular job, for one reason or another, that man chooses to leave, and he must be free to leave and he does leave. And he takes that investment with him.

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I would like to propose that you might consider something in the order of a 25-percent-and it sounds like a lot of money, but I think you will find if you analyze it carefully to see who that skill belongs to and who is paying for it, that you might favor such a consideration. These things, of course, should be coupled with maximum schedules so that it does not get out of hand, so that anyone or any one industry can impose too much of a burden, greater than they should have, on the rest of the tax structure.

I would like to take a few moments more and veer away from this tax credit thing and get around to the question of some of the current programs under the Manpower Development and Training Act.

In our testimony that you have a copy of we have made some mention of some of the problems that exist in the current programs in being administratively unwieldly. Oftentimes there are 30 or 40 steps that the paperwork has to go through before an employer or an employer group can see any results coming back down in the form of a finalized signed contract.

These various steps get bound up in political considerations and many other considerations of empire building which we have all seen and are aware of, and I would like to remind Senator Kennedy that the good services of his office have been used only recently to shake look three programs in the tool and die industry, specifically in Boston, Worcester, and Springfield. I think you may recall those in

stances.

This is an example of the type of things that goes on. We, under our plan, have proposed that now the Manpower Development and Training Act funds be made available for a longer period of time with less stations of review. We do believe in firm controls, but we do not believe that they should be checked at every way-station with opportunity for what is the word-paper shuffling. It is more than paper shuffling involved oftentimes, and many times the employer gets to the point where he throws his hands up in the air and says, "Well, I am going to go my own way and get along as best I can," and consequently, the one who loses by that device is not only the company, but the whole economy because it has been demonstrated time and again that even though last month's figures showed an unemploy ment of 4.6 percent, I believe, nationwide throughut the industrial United States, the classified ad columns were screaming for help.

You can go to any plant that is moving along and modern and alert and today you will find them crying that they could do twice as much business, literally, if they could get enough people to fill the spots. And yet they are reluctant to train these people, because, No. 1, they do not know how. These research programs that we speak of in our paper need to be brought into being and the results of those definitive research programs need to be written in plain English so that the companies, and the unions, can use them to institute programs that are meaningful and quickly bring people to a state of efficiency.

I think at this time that if we could prevail on this committee to peruse the plan we have given and go through it, we would certainly appreciate it.

We appreciate this opportunity to speak to you.

Senator KENNEDY of Massachusetts. Thank you very much, Mr. Dewhurst. I will reserve any questions I have until after Mr. Isenberg makes a comment. Maybe Senator Prouty would like to ask questions.