1983 Summer

SECTION: CONTROVERSY; No. 25; Pg. 7

HEADLINE: Government Job Creation

BYLINE: Senator Orrin G. Hatch, United States Senate, Washington, D.C.

BODY:
Dear Sir:

Mr. Bovard's fears concerning the Job Training Partnership Act of 1982 (JTPA)
are understandable given the dismal track record of previous federal attempts in
employment and training. But he makes several judgments against the new program
based primarily on assumptions which are no longer true.


First, he gives no credit to the Reagan administration for its resolve to
fairly and effectively administer programs like the Job Corps and the summer
youth employment program. Extensive administrative checks against waste and
abuse have already been initiated. If Mr. Bovard were to read a yet unwritten
audit by the GAO, his verdict may be different. His criticisms of these
programs are based on poor past management, not on a poor concept, or lack of
need. I do not disagree that there is room for improvement in these programs,
and, in fact, I am pursuing the development of legislation to reform the Job
Corps. The fact that the Job Corps can be a useful tool for rehabilitating
hard-core disadvantaged youth who would otherwise draw a lifetime of welfare
benefits should not be discounted.

Second, the provision regarding affirmative action must have been
misinterpreted. Mr. Bovard, I should think, would support the idea that if
business puts up its own funds to train women and minorities who are
economically disadvantaged and successfully places them in unsubsidized jobs,
certainly business should be relieved of some of the onerous federal
requirements of Executive Order 11246. This is strictly a voluntary provision,
but one which has the potential of drawing private funds into training, of
placing women and minorities in jobs, and of reducing federal paperwork. If
there is a choice between business spending their resources on complex
affirmative action plans and compliance costs, or on training, does it not
make more sense to encourage them to spend it on training?

Third, the 40% youth service requirement exists for the same reason that the
Job Corps exists -- that it may be possible to prevent disillusioned youth, for
whom the school systems, families, or churches have failed, from becoming wards
of society for their lifetimes. I believe Mr. Bovard would agree that youth is
the hope of our free enterprise system -- and if it fails, we all fail.

This is why I hold that as the butterfly replaced the caterpillar, the CETA
program evolved into the Job Training Partnership Act. This programmatic
transformation included five rather fundamental changes:

First of all, the JTPA is a training program. It is not an anti-poverty
program, a civil rights program, a government procurement program, a
counter-cyclical economic stimulus program, or a public service jobs program.
The JTPA has been blessed by its Congressional sponsors with a singular purpose,
that of training people for jobs. Even Senator Edward Kennedy, during debate on
the measure in the Senate, conceded that "this legislation is not a jobs program
. . . I think that we also need a jobs program . . . But that is not what we
are considering today. We are considering a training program." Unencumbered
with all of CETA's conflicting goals and purposes, JTPA is already in a better
position to succeed.

Adherence to this policy is mandated by a strict prohibition on funds which
can be spent for non-training purposes, i.e., income support and administration.
Mr. Bovard accurately points out that CETA funds were being spent on wages,
stipend, or allowances; 80 percent, in fact, of the CETA dollar was spent for
purposes other than direct training. The JTPA limits funds for non-training
expenses to 30 percent of the service delivery area's allocation and a full 70
percent must be spent on training. This provision will prevent the payment of
income support in all but the most necessary instances and, even then, such
support cannot be of such an amount that it would make the JTPA program an
attractive alternative to a job.

Irrespective of the view taken by Mr. Bovard that business supported this
legislation because it meant subsidies to them, business must be involved in the
training program. Business has the best concept of what occupations are in
demand in the labor market area and what industries are growing or declining.
The private sector has the best vantage point from which to judge the quality of
training curricula, therefore, helping to dissolve the possibility that
individuals might be trained below the levels required by employers. If we
discount business from this role because they may reap some benefit, what other
institution is there in each labor market around the nation that is as
responsive to market conditions and that will voluntarily devote its time and
expertise to planning a local training program?


Third, to further enforce the training initiative's new market-oriented
approach, performance standards, not process, will prove the program's success
or failure. For the first time, adequate statistics on placement in
unsubsidized jobs, other positive placements (such as enlistment in the military
and enrollment in an advanced trade school) earnings gains, and welfare
reductions must be accumulated. The JTPA contains both incentives to exceed
performance standards and sanctions for falling short. If such standards are to
be met, training must serve a real, not an imaginary, labor market.

Fourth, substantial program authority was given to substate "service delivery
areas" which have been designated by governors taking into account the state's
labor markets, economic activity, and boundaries for other federal programs.
While CETA was administered on the basis of geography exclusively, JTPA's
service units will not be as arbitrary. Governors will assume the role of chief
monitor and auditor. One major failing of CETA, indicated by Mr. Bovard, was
inadequate oversight. It will be far more efficient for governors to track the
expenditures for the service areas in their states than for the federal
Department of Labor to do so for more than 450 prime sponsors under CETA.
States will be accountable to the federal government. This federalism approach
will assure a better system of checks and balances on the expenditure of
taxpayer-contributed training dollars.

Finally, the important relationship between the training system and the
referral and placement system has been solidified by means of the incorporation
of amendments to the Wagner-Peyser Act in JTPA. These amendments will tie the
purposes of the United States Employment Service together with the new training
system so that planning for each function can be both concurrent and
complementary. Perhaps, because of these amendments, we will be able to refrain
from reinventing the wheel.