Mr. FLOOD. We will now take up Federal Grants to States for Employment Services and the Limitation on Grants to States for Unemployment Insurance and Employment Services. INTRODUCTION OF WITNESSES The presentation will be made by Mr. William H. Kolberg, Assistant Secretary for Manpower. All right, Mr. Kolberg. You have a statement, I see. Mr. KOLBERG. May I proceed, Mr. Chairman? Mr. FLOOD. Suppose you do. GENERAL STATEMENT Mr. KOLBERG. Mr. Chairman and members of the committee, the budget requests for fiscal 1974 are $881,800,000 which is an increase of $27 million over the 1973 revised appropriation of $854,800,000. The 1974 requests are composed of trust funds in the amount of $817,400,000 and general revenue funds of $64,400,000. We are requesting mandatory increases of $41,807,000 for increases in State salary and benefit costs; however, this is offset for the most part by productivity savings. We expect these savings to be accomplished through improved procedures and increased efficiency. Continued emphasis will be placed on reducing high cost State activities in the administrative staff and technical services, as well as indirect costs in the employment security programs. The State employment service activities in fiscal year 1974 will require $430,200,000: $64,400,000 from general revenue funds and $365,800,000 from trust funds. General revenue financing is required to comply with a provision of the Employment Security Amendments of 1970, Public Law 91-373, limiting the use of Federal Unemployment Tax Act revenues to services for those individuals covered by State unemployment insurance laws. In accordance with this provision, 15 percent of the estimated cost of the employment service is requested from general revenue funds since approximately 15 percent of employment service activities are related to persons not covered under State unemployment insurance laws. The request also includes an increase of $25,400,000 for computerized job placement activities. This function was funded in 1973 by the Manpower Training Services appropriation and is now included in this request because the system is operated by the State employment security agencies. The Manpower Training Services request has been correspondingly reduced. In 1974, the employment service will devote primary emphasis to improving placement services to all applicants. Increased job vacancy listings are expected through an integrated program of employer services and individual job development planning, making maximum use of the mandatory job listing program that was initiated in Executive Order 11598. The employment service will also emphasize priority services to veterans, especially Vietnam-era and disabled veterans. Not less than $25 million will be used for services to veterans in 1974. The employment service will continue to stress improvement of manpower delivery systems into rural areas, services to those members of the agricultural work force facing dislocation due to increasing mechanization, and full utilization of computer capability through job banks in order to provide optimum exposure of applicants to available openings. The amount included in the limitation on grants to States budget providing for the operation of unemployment insurance activities is $423,600,000 in 1974. This request continues to be funded solely from the unemployment trust fund. During 1973, interim cost standards were designed based upon historical data for the efficient administration of each function in the unemployment insurance area. State allocations for 1974 will be based on these interim cost standards. The Manpower Administration is commited to the devolpment of cost and performance standards designed specifically to meet each State's operating requirements. All cost models are intended for completion by the end of fiscal year 1974. This schedule will permit replacement of the interim cost standards in effect during fiscal year 1974. Mr. Chairman, this concludes my statement on the requirements of these appropriations. I will be glad to answer any questions you or members of the committee may have. WORKLOAD STATISTICS Mr. FLOOD. Will you place in the record the workload statistics on which you base the appropriations request in this budget? COMPLAINTS FROM STATES Mr. FLOOD. Are we going to get any complaints from the States about these estimates? Mr. KOLBERG. You probably will. We are cutting them back some and expecting productivity savings. I believe we have gotten some complaints. Mr. BROWN. We have had some complaints during the last year because of a slight reduction but the complaints were not really bad at all, Mr. Chairman. The complaints were tolerable and the performance increased. This year the cut is not much more drastic than last year. We anticipate about the same amount of objection. MAN-YEARS OF STATE EMPLOYMENT Mr. FLOOD. How many man-years of employment are financed from the two appropriations in 1972, 1973, and 1974? Mr. ZUCK. În 1974, it is 64,085; in 1973, it is 67,664. I do not have the 1972 figure immediately available. Mr. FLOOD. Please provide that. [The information follows:] In 1972, there were 68,101 man-years of employment financed from the grants to States appropriations. REQUEST FOR 1974 LESS THAN 1973 Mr. KOLBERG. The 1974 figure is a reduction of about 3,500 from the 1973 level. Mr. BROWN. Primarily on the UI side. VETERANS EMPLOYMENT AND ADJUSTMENT ACT Mr. FLOOD. What are the new activities which the State agencies have undertaken as a result of this Veterans Employment and Adjustment Act of 1972? Mr. KOLBERG. Let me ask Mr. Brown to respond to that, please. Mr. BROWN. Mr. Chairman, of course the Employment Service has always had the veteran as its No. 1 priority. However, with the Vietnam-era program announced by the President some year and a half ago, we put on an intensive publicity campaign to the employer community to list their job openings with the Employment Service so we, in turn, could refer veterans to those jobs. As I indicated earlier this morning, the placement of Vietnam-era veterans during the first 6 months of this fiscal year, as compared to the first 6 months of fiscal year 1971 increased almost 85 percent. The one important thing that we believe we can do in the Employment Service is get veterans into jobs. Mr. FLOOD. What new activities, talking about the States now, what new activities have the States undertaken as a result of this law? Mr. BROWN. We had, first of all, a renewed emphasis in terms of making sure that every veteran was contacted when he returned from overseas. As you know, almost 1 million returned last year. Every single veteran received a personalized notice asking him to come down to the Employment Service for special counseling, interviewing and placement activities. Beyond that, if he needed training, he was provided assistance through the VA in terms of GI bill training; he was also referred for on-the-job training to MDTA, through institutional training, and, if necessary, to other manpower programs available to the Employment Service. Early last year, the then manpower assistant Secretary Lovell gave the veteran priority in every manpower program where he was eligible under the statute. I believe that is a summary of what we have done. Mr. FLOOD. Those are new undertakings? Mr. BROWN. By the State Employment Services. Mr. FLOOD. Yes. Mr. BROWN. Who receive their money through this grant account. MANDATORY JOB LISTINGS Mr. KOLBERG. In addition, Mr. Chairman, the law required that employers doing business with the Federal Government list all their job openings with the Employment Service. This mandatory job listing requirement had been started by Executive order. Now we have the job of getting it across to the employer community, that this is a requirement of law. Mr. FLOOD. I am interested in what new activities the States have taken on under the new law. Mr. BROWN. I think Secretary Kolberg put his finger on one of the most important things, Mr. Chairman. The States have always received job orders from employers. What happens in mandatory job listing is that all Federal contractors in the country now must list their job openings with the Employment Service. That means an increase in the number of job openings coming into the Employment Service. Indeed, over 100,000 more openings per month are now coming into the local offices of the Employment Service. This really provides a dramatic increase in the number of oportunities for veterans and is essentially the most important thing that the States are doing. TRANSFER OF JOB BANKS Mr. FLOOD. Why are you taking the financing of job banks out of manpower training services and putting it in this appropriation? Mr. KOLBERG. The simple answer is that they are operated by the Employment Service for the benefit of employers that are covered under the employment insurance laws, so we think that they are a part of the Employment Security System. We set them up initially under the Manpower Training Act to try them out as an experimental pilot effort. They seemed to work. Now they are installed statewide in some 30 States, as well as in many local communities. We think they ought to be a part of the regular financing of the Employment Security System. EXPLANATION OF JOB BANK SYSTEM Mr. FLOOD. Suppose you give us a rundown of the job banks, what future plans you have for job banks. |