ADVISORY COUNCILS AND REVIEW COMMITTEES

A final, important element of coordination is the establishment of advisory and review committees. Title IV now requires each prime sponsor to have a youth council under the prime sponsor's planning council. The new legislation would require prime sponsors to establish a youth opportunity council which would assist in the development of youth program plans. If the prime sponsor enters into an agreement with the local education agency, the Youth Education and Training Act in complementary fashion, provides that the CETA Youth Opportunities Council can also serve as the review council for basic skills grants. In this case, one-third of the members would be named by the prime sponsor, onethird by local education agencies, and one-third by the private industry council. Adequate representation on the youth council of program eligible youths must be assured.

CETA Title V would be amended to provide that the National Commission on Employment Policy establish a committee on youth to consider the problems caused by youth unemployment, and to help the Commission advise the Secretary, the President, and the Congress on the effectiveness and quality of training and employment policies and programs affecting youths, and to make recommendations to enhance interagency coordination of youth programs.

TRANSITIONAL PROVISIONS

Finally the youth legislation would provide for a phased transition, authorizing the Secretary to permit prime sponsors to continue existing local CETA youth programs started under subparts 2 and 3 of the current title IV-A through fiscal year 1981, as they move ahead upon enactment with planning and organization so that new programs can be started in fiscal year 1981 and become fully operational in fiscal year 1982.

CONCLUSION

In closing I would like to stress that the program we are proposing is not only a humane and equitable approach to solving a serious societal problem, it makes sense in simple economic terms as well.

What we are talking about is making an investment in people whose skills we are going to need over the next decade. We must act now to make sure that the demand for skilled workers will be met in a way which helps address the problems of excessive youth unemployment. The coordinated education and employment approach we are proposing can help make this happen and in so doing provide important long-range economic and social benefits to all Americans.

That concludes my prepared testimony. I will be glad to answer any questions of the Subcommittee.

STATEMENT OF HON. RAY MARSHALL, SECRETARY OF LABOR, U.S. DEPARTMENT OF LABOR, ACCOMPANIED BY ERNEST GREEN, ASSISTANT SECRETARY OF LABOR FOR EMPLOYMENT AND TRAINING; RICHARD E. JOHNSON, ACTING ADMINISTRATOR, OFFICE OF POLICY EVALUATION AND RESEARCH, EMPLOYMENT AND TRAINING ADMINISTRATION; DARLA WHITE, OFFICE OF LEGISLATION AND INTERGOVERNMENTAL RELATIONS

Secretary MARSHALL. Yes, sir. Thank you, Mr. Chairman. I am accompanied by Mr. Ernest Green on my right, Assistant Secretary of Labor for Employment and Training; Richard Johnson, on my immediate left, who is the Acting Administrator of the Office of Policy, Evaluation and Research in the Employment and Training Administration; and Darla White, who is from the Office of Legislation and Intergovernmental Relations.

Mr. Chairman, I would like to summarize my statement, since it will be put in the record, if that is acceptable with you.

Mr. HAWKINS. Without objection, so ordered.

Secretary MARSHALL. I think it is important to emphasize that the problem we are dealing with is one of the most important domestic problems that we face, and it is one of the most important domestic problems that many of the industrialized countries of the world face.

In our situation, we know that about half of all the unemployed people are under 24 years of age, and that young people who suffer severe employment disadvantages at an early stage tend to be permanently disadvantaged in the labor market. It has therefore been one of the high priorities of the Carter administration to deal with the problem of youth unemployment and employment. You recall, Mr. Chairman, when we came in, we worked with the Congress to pass the Youth Employment and Demonstration Projects Act of 1977, which was the first time in our history that we had a comprehensive youth employment act.

The basic strategy that we developed at that time was to take those programs with demonstrated effectiveness and expand them as fast as we reasonably could do so, and then to learn as much as we could about some of the problems that we did not understand fully, through demonstration projects. We have done that. An example of the kind of program that had demonstrated its effectiveness was the Job Corps and we moved-and are in the process of doubling the size of the Job Corps for that reason.

We have established a number of demonstration projects that have already provided a lot of information that forms the basis for our proproposals here today for the expansion of the youth employment and training programs.

Let me review very quickly some of the main findings that we have had from our detailed study of the youth problems as a part of YEDPA, as well as other activities.

The first one of those findings is that there tends to be a natural pattern of entry into the labor market for most young people 14 to 21 years of age. That pattern is a process of short-term jobs, experimentation, some on-the-job training and, finally, entry into the mainstream of the American labor market.

But for many young people that does not happen. A minority of young people who have severe disadvantages and these are frequently multiple disadvantages that cause them to be disadvantaged at an early date and not to be able to get into the mainstream.

We propose to target our resources primarily on this latter group, that is, the people who have the most severe disadvantages.

Another finding from the work that we have done so far is that the CETA program has worked, it has been effective in increasing employment and reducing unemployment for disadvantaged people. We moved on a number of fronts, Mr. Chairman, with your help, to improve the operation of the whole program.

One was that we dealt with the long-standing problems of the summer youth employment program. I think through the work that we have done, we have tackled and substantially solved the problems associated with this program.

I think it is significant, also, that we had the Youth Employment and Demonstration Projects Act fully underway within 6 months of the time the President signed the bill in August of 1977. The program

has served over three-quarters of a million young people since its inception. I might point out, that is less than half of the total number of young people served by the CETA system because youths obviously participate in other titles of CETA, particularly title II. Altogether, there are about 2 million young people at any time during the year who are in the CETA programs.

These programs have, since 1978, been especially targeted to people most in need. Eighty percent of all the participants during this time have been disadvantaged; 40 percent of the participants in the YEDPA program have been minorities.

We think that you can demonstrate with the statistics that the program has worked to reduce youth unemployment and to increase youth employment. In fact, one-fourth of all the growth in employment for teenagers in the country, since 1977, has been in the CETA system. Virtually all of the growth in black teenage employment since December 1977, has been in the CETA system.

We have done some special evaluations of participation through our continuous longitudinal studies, and we have found that between January 1978 and the spring of 1979 in all of CETA there were about 212 million young people. This represents 6.9 percent of all young people in their age category; 17.4 percent blacks, 12.2 percent Hispanics, and 4.8 percent whites.

We think that this program has therefore demonstrated that we can both expand the employment of young people and reduce their unemployment.

Another lesson that we have learned from this experience, Mr. Chairman, is that first, from studying the program content and structure, that the system is too complicated the way it is now. We believe, therefore, that it is important to consolidate the programs and to streamline the system and reduce paperwork. This is one of the main complaints that we got from people who are involved in the system; that is, the prime sponsors and others.

Another lesson is that youth employment policy should reflect the developmental needs of youths, and that these needs are diverse for different groups of young people. One of the findings from all of our work was that a major disadvantage of young people has been in basic education. Many of them, even though they had been through the school system or participated in the school system for a number of years, were not functionally literate. One of the complaints from employers was that we needed to give much greater emphasis to basic education.

Another conclusion was that the system was not disciplined enough, or was not formal enough, to make it possible for employers and others to know what had happened to young people while they were in the program. We therefore believe that it is important to develop local benchmarks and performance measures to certify to employers the achievements of young people.

Program records should document preemployment experience; employability development; educational attainment, and vocational competence.

We have learned that sometimes we do not do enough for the severely disadvantaged young people who are in the program, and

that therefore intensive efforts need to be made for older, out-of-school youths, and that these intensive efforts have been most effective and should be emphasized in our new initiatives.

A related finding was that the most effective treatment of young people in the program was a combination of education, classroom work, and on-the-job training. We think that, in order to be effective, Federal employment and training programs must reflect workplace realities in their demands and rewards. Increased emphasis is needed on performance requirements for program operators to make sure that Federal dollars are buying high-quality services which meet current labor market needs and realities.

We think that greater flexibility is needed at the local level. National prorities should be achieved through incentives. Incentive funding can be provided through special activities, such as weatherization, or for categories of youths with special needs, such as the handicapped, or for programs operated by special types of service deliverers, such as private for-profit organizations.

We also found that the problems of excessive youth unemployment are highly concentrated, both geographically and among certain groups of citizens. We found, for example, that during 1977 one-half of the black males between the ages of 16 and 19 did not work even 1 week. Our proposal would attempt to reach 20 to 25 percent of nonworking black teenagers.

Resources must be carefully targeted on communities and population groups with the greatest needs, such as dropouts, minorities, youth from poor families, and youths with handicaps or other special problems.

Finally, addressing problems of youth unemployment requires sustained planning and program linkages among the private sector, schools, the CETA system, community-based and voluntary organizations, parents, and concerned citizens. We believe that this must be done at the local level in order to break down the fragmentation and segmentation that we have had between these groups. Especially, we think, it is important to improve the linkages between schools and work; and the particular component of the employment and training system that needs to be more closely related to the schools is our private sector initiative.

Let me next look at the framework of our proposed legislation, Mr. Chairman. This new legislation would consolidate the existing subparts of title IV-A and revised title IV-C of CETA. The three existing subparts would be replaced by the following new subparts, differentiated by the extent of local and Federal responsibilities.

The first subpart would provide general purpose, basic grants to prime sponsors. These grants would constitute 59 percent of the total program funds. Three-fourths of that amount, that is three-fourths of that 59 percent, would be distributed as general allocations among all prime sponsors, according to the current YETP formula. Equal chance supplements, constituting one-fourth of the basic grant funds allocated to prime sponsors would provide extra funds to those prime sponsors with very large concentrations of disadvantaged youths, for the purpose of providing intensive programs and services in distressed areas.

These grants are an essential feature of our proposal. It is very clear that additional resources are needed to give an equal chance to youths who live in areas where concentrated problems of unemployment, poverty, and social disorder pose multiple employment barriers.

A highly targeted formula has been developed for these supplementary allocations. The legislation would also continue the existing laws, set-asides of funds for Governors for special statewide youth services, 5 percent; and to programs for native American youth, 2 percent, and eligible youths in migrant and seasonal farmworker families.

Both the generally distributed allocations to prime sponsors and the equal chance supplements would be available for use as general purpose basic grants. A wide variety of services, such as those currently available under the YEDPA would be authorized. The intent is to authorize prime sponsors to provide the array of services neeeded to give each participant the skills needed to get an keep a job. Emphasis should be placed on efforts to overcome sex stereotyping and on career development for nontraditional occupations, and on efforts to assist the handicapped.

Prime sponsors would be required to develop programs focused upon the achievement of basic and occupational skills needed for and leading to employment in the regular economy. The object is to support programs of the caliber of Job Corps that will serve youth in a nonresidential setting.

The overall program funded with the basic grant would center on out-of-school youths, including those beyond high school age or dropouts of high school age. Services for eligible inschool youths would be worked out in cooperation with the local education agencies and would include exposure to labor market and career education as well as work experience carefully coordinated with educational activities. Prime sponsors would support work experience and related services, but not basic education in the schools, or local educational agencies with funds under this part.

Prime sponsors' programs operated through community-based organizations, and other alternative arrangements could be used for educational programs leading toward a high school or equivalency diploma. Programs may be operated by postsecondary institutions, but funds may not be spent for courses leading toward a postsecondary degree.

Services for eligible out-of-school youth, including dropouts, would emphasize development of basic reading, writing, and arithmetic skills for those who need them, supported with employment opportunities and work experience. Training would be developed in cooperation with local education agencies and private industry councils to assure its usefulness to employers so that as many as possible of the work opportunities are located in the private sector.

The Secretary of Labor would establish performance standards for prime sponsors. In addition, prime sponsors would be required to assure strict accountability and performance standards designed to monitor their service deliverers carefully. Individual achievement records would be kept for each youth to continuously document the participation and progress of young people throughout their period of enroll