TRAUMATIC FOR SOME, BUT...

Contrary to much conventional wisdom about unemployment, Mr. Rinaldi demonstrates that being out of work doesn't automatically mean painful suffering. Certainly job losses are traumatic for most people, and unemployment pay, which is normally far below working wages, rarely relieves genuine hardship for some people who are laid off. But Mr. Rinaldi didn't mind being laid off, and he enjoys his current situation. In fact, a look at his situation prompts some reconsideration of just what "unemployment" really means in some instances.

Mr. Rinaldi hasn't been ambitious in the conventional sense in his working life. He took the job at the parking lot while he was training to be a surveyor at Hartford State Technical College. When he completed the course he decided he'd rather continue working 25 or 30 hours a week at the lot than take one of the three jobs he was offered as a map maker. Being a parking attendant "was relaxing," he recalls. “I didn't have to work up a sweat. I could do what I wanted."

That isn't to say the parking lot was without drawbacks. It did make some demands on his time. It wasn't terribly stimulating. And take home pay, averaging $41 a week, wasn't very lucrative. The biggest worry, however, was crime. Mr. Rinaldi was held up twice during his last few months at the lot, even though he was located a mere two blocks from police headquarters in Hartford. At that he considered himself lucky. An attendant in the lot across the street was knifed one night.

So when the management changed, Mr. Rinaldi, who had worked fairly steadily at a variety of part-time, unskilled jobs since he turned 16 years old, wasn t upset by the layoff. Living with his parents and drawing on some $1,000 he had in savings, he figured he could easily survive until he decided what he wanted to do next. Collecting unemployment pay was an afterthought suggested by friends who at various times had, as he puts it, "been on Ella's payroll." (Ella Grasso is Connecticut's governor.)

But when he began collecting the unemployment check, any sense of urgency about finding another job disappeared. Connecticut, like most other states, requires that people receiving unemployment compensation be "actively looking" for jobs. But in practice that's nearly unenforceable. Mr. Rinaldi told the service that he was looking for a job as a carpenter's apprentice-a rare job opening in a state like Connecticut where the construction industry is severely depressed. Mr. Rinaldi concedes he hasn't any experience as a carpenter but says he'd be happy to get such a job. However, his real interest was in remaining on unemployment. "If I said I wanted to be a parking lot attendant, they'd tell me to get a job," he asserts.

So, once every six weeks, Mr. Rinaldi goes to the unemployment compensation office in a depressed section of North Hartford and checks job openings as required by the state labor department before picking up his check. The rest of his checks are mailed to him and the remainder of his time is his own.

A spokesman for the Connecticut labor department, which administers the state's unemployment compensation, says that people collecting unemployment compensation are regularly informed of job openings and told to get job interviews. He asserts, "You can't sit for 65 weeks and wait for a job." He adds that applicants are thoroughly investigated. But sources familiar with the department admit that the system isn't equipped to deal with the huge number of clients it handles when unemployment is over 9%, as it has been in Connecticut.

Mr. Rinaldi says he has never been told of a job opening by the service or even asked whether he is actually looking.

On a typical winter day, Mr. Rinaldi says he gets up at 8 a.m., "so my parents won't think I'm a bum." On cold days he goes out and warms up his mothers car because her place in the garage has been supplanted by a battered 1951 Chevy panel truck which Mr. Rinaldi is sporadically storing. Some mornings he goes into the garage and fiddles with the vehicle but when his parents leave for work, he often returns to bed.

When he gets up again he eats and reads The Hartford Courant from cover to cover including obituaries, box scores and all the classified ads. "It's all right to be physically lazy. But I have to read something," he says. By the time he's through with the paper it's late afternoon and he can go out with some friends and have a few drinks. Evenings he often goes to various friends' homes or stays

at his own home, a comfortable split-level on a side street and watches television. Some evenings he goes to Hartford's jai alai fronton, pays $1.25 for general admission standing room and slips blithely into the plus seats in the uncrowded $5 seat section right in front of the court.

PRESSURE FROM PARENTS

Although his lifestyle isn't exciting, it's certainly comfortable. He's able to indulge his penchant for imported German Hofbrau beer. And he has enough friends with cars and places to go that he isn't trapped in one place. He says the most unpleasant element of unemployment is being nagged by his parents. "They say 'go to work, everybody works'. I say 'everybody's miserable.' ”.

Mr. Rinaldi's lifestyle may soon change. His parents have begun actively pressuring him to start doing something, and recently they began charging him $20 a week for room and board. Mark now intends to take some electronics courses, and he also talks of getting at least a part-time job, which would put an end to his unemployment compensation.

Mrs. Rinaldi, who works for the state as a purchasing agent, thinks Mark's lack of enthusiasm for work stems from the nature of the jobs he has held. "With better jobs he might have gotten a better impression" of the job market, she says. Her husband declined to be interviewed.

For his part, Mark says bluntly that if his parents ease up he'd gladly continue drawing unemployment until his benefits run out next summer. He also says that if he saw a good chance to make a lot of money, he'd jump at it. "I've learned the trail of the green is elusive," and a shot at riches would be worth some work, he says. But even then the job wouldn't be an end in itself. "I'm only interested in making a quick million and retiring," he wisecracks.

Mr. GONZALEZ. Mr. Pattison.

Mr. PATTISON. I would be very interested in hearing Mr. Francis' remarks, and I would like to use my time to have you respond to Mr. Rousselot's question, if you could do that.

Mr. FRANCIS. I will take a look at it, and I may still want to write an answer, because I think this is a very interesting subject, and I say what I am about to say with, I think, about as big a heart as there is in this room, because I don't want to see anyone in this country go hungry, go cold, because they can't find a job.

But I think we have some problems in the unemployment area that were pointed out in the articles, and I think the system of unemployment compensation that we have developed piece by piece over a long period of time lends itself to this kind of development. And so as a first shot, I would

Mr. ROUSSELOT. These are two examples that I have given?

Mr. FRANCIS. Yes.

And I think there is an opportunity for the Congress to take a look at the whole unemployment compensation program with a mind toward helping those people who need it, and then maybe taking care of some of the people who don't need it in some other way.

I think you will find it not unusual to see a retired man who has worked a long period for a company with an excellent retirement program, at age 65 go on retirement, go on social security, and take 26 weeks of unemployment; this has always seemed a bit inconsistent to

me.

Now, I think that the Congress, in looking at this whole program, needs also to concern itself substantially with another group, and this largely is our younger workers, many of whom have never learned the work ethic, never learned that people do get up and go to work, and indeed, many have come out of high school with an ability that hardly

permits them to read and write and makes them almost unemployable. And this is covering a little ground that was touched on earlier. But it seems to me that some kind of a program to educate these people into the work force, so to speak, should be a part of a review of our whole unemployment program. You can find, I think, some demographic studies that indicate that this country in 15 years could be short of labor, certainly short of skilled labor. And I think this makes it increasingly important that we come to grips with the structural problem of unemployment. Not try to solve it through creating money or other macroeconomic demand management programs, but with programs that can hopefully bring these people back into our employable group. And I believe that I have got enough confidence in the future that this country will be able to absorb them as we go on. Let's cut out those that should not be counted as unemployed and go about the job of correcting the true employment problem we have got.

Mr. PATTISON. Would you, therefore, because of what you just said about the teenagers, would you feel that basically that is a problem, regardless of whose fault it is, that our society to some extent has imposed upon our teenagers, I mean for one reason or another the teenager is unable to read or write, or reads or writes very poorly and is poorly motivated and therefore, obviously, we are not going to allow that teenager to starve, and so we have to have some part of the educational system-we have to recognize as part of the educational system that we have to do something different than what we've been doing up to now?

Mr. FRANCIS. I think we do.

And I think, for instance, the minimum wage that was mentioned by Dr. Brunner should be looked at, and perhaps these kids should be excluded. Regardless of what is done with the minimum wage, we should give them a chance to work for somebody at a level of compensation that they can actually earn while they are in the training program. If that is not the answer, then there may be some kind of a program of subsidization to help these kids reach the point where they can indeed earn the minimum wage.

Mr. PATTISON. To some extent this may go outside of your economic area, but to what extent would you think that a program, a restructuring of the educational system whereby young people would move into the work areas early and then back into education and then out into the work area and back into education over a much more spreadout period of time so that those young people might possibly acquire some motivation, to what extent could this be done-and that would be a rather radical restructuring of our educational system.

Mr. FRANCIS. Some of that, as you know, has been done and done with some success. I personally have been through the experience of using high school students for half the day: School half day, work half day; and it worked out very well. It kept them in school and for many it meant they were prepared to move on into full-time work when they finished.

Mr. GONZALEZ. Mr. Pattison, I regret to say your time has expired. If you wish to add to your statement in the written transcript that you will receive, of course, that is possible, if the gentleman wishes to receive a more complete reply to that last question.

Mr. Hyde?

Mr. HYDE. Thank you, Mr. Chairman. A very brief question on the problem Mr. Rousselot asked. I do believe that our approach on unemployment is, at least as we analyze the statistics, is primitive. We don't really diagnose where, what, and how these elements of the unemployment statistics are created and what to do about them. We immediately rush into a public works jobs program or public service jobs, even worse. I have got constituents who are on unemployment compensation. One man is a lithographer. He's employable, wants to work, there are jobs out there, but unless he gets a job as a lithographer, he loses his pension rights with his union. This is true with other unions.

The role of the minimum wage, we are going to raise that in this Congress. That's going to harm the unemployment situation.

Well, there are jobs available, and there are people who will not get matched with those jobs and will continue to get unemployment compensation, and we really ought to analyze the problem and be determined to do something about it, even though it is politically inexpedient, which really brings me to my main question.

I listened to Professor Samuelson-and he is gone now-talk about, really the Fed ought to be more responsive to Congress. I really disagree with that. I might rather apply that to the U.S. Supreme Court, but there is a sharp division there. But as a politician and as one who observes the political process, I am convinced that politicians congenitally are interested only in the short-term solution. Everyone wants to go to Heaven, nobody wants to die. When you preach discipline, you're not going to get elected. But somebody in that economic atmosphere has got to not only preach discipline but implement discipline somewhere along the line. And if it's left to the politicians, I'm concerned about the health of the economy.

Look at energy. We have not had the guts to talk about how to really solve the problem. Instead, we continue to import more and more in the face of a devastatingly tragic situation. If they ever turn the spigot off, we will be in World War III like that, if we can get our planes off the ground.

So to say that the sensitive and often difficult mechanisms of monetary policy ought to respond to the shifting political winds that we in Congress are subject to, I think, is a mistake. I'm not thrilled about shorter terms for Governors. I'm not sure making them coterminus with the President is good, because I think our Founding Fathers knew something about human nature when they made the judiciary independent of Congress and the political winds, and to me, I think there is wisdom in making those people who set out monetary policy independent of politics.

Now, that is not to say they should be on Mount Olympus. I don't think they are. I think they come down here. I think they talk to us. They are subject to pressure and criticism in the media and from Congress, like everyone else is. But for goodness sake, I would hate to see the hotline go from the distinguished and compassionate chairman of this committee, of whose fan club I am a charter member, or Senator Proximire, and have them jump to the crack of the whip, because I think our views of the situation are necessarily more political than maybe the wisdom that the good of the country calls for.

Now, that's not a question; that's a statement. And I would love to hear your comments on it.

Dr. TOBIN. I will make a short comment. First of all, I don't think that Professor Samuelson meant, or that anybody means, that day-today or month-to-month monetary policy should be made by this committee, much less by Congress as a whole. That can't be done.

However, the choices that are made by the Federal Reserve as to monetary policy, just like the choices that are made by the Congress and the executive in regard to fiscal policy, do determine extremely important outcomes for the society as a whole. I think it's fair to say that monetary policy is one of the most important aspects of public policy that one can imagine. It affects the rate of inflation, it affects the rate of unemployment, it affects the rate of economic growth, it affects the composition of national output as between investment and consumption.

All those matters influence the lives of people all over the country. All involve value judgments about priorities. For example, we have heard disagreement today from this panel in regard to the relative importance to the country in the next few years of reducing unemployment and of reducing inflation.

There may not be a long-term trade-off between the two, but there can't be any doubt that there is an important shortrun trade-off between the two. And there is another trade-off between trying to reduce inflation by incomes policies of various kinds as against trying to reduce it by holding the economy down for a long period of time with low rates of monetary growth.

Those are all inevitably political questions. And the institutions of representative democracy cannot avoid taking a position on them, a position which must be compelling to the agents who carry out the day-to-day and month-to-month operations. I don't think you can avoid your responsibilities in that regard by letting a group of experts on Constitution Avenue decide those strategic points.

Mr. HYDE. We do it with the Supreme Court, though.

Dr. TOBIN. I'm very happy with the Constitution of the United States, and with the division of the responsibilities among the three branches of Government. But the founding fathers did not set up the Federal Reserve system. They did not decide that the coinage was a responsibility of the judiciary. They did say it was the responsibility of the Congress.

Mr. HYDE. Sir, my time is up. But I just want to comment. The philosophical underpinning, though, for setting up an independent branch of government did not terminate, it seems to me, the validity of that with setting up the Supreme Court.

I wish we had more time. I would like to hear the other gentlemen's comments.

The CHAIRMAN. We all suffer from a lack of time.

Mr. Vento?

Mr. VENTO. Well, Mr. Chairman, gentlemen, I've enjoyed listening today. I think it's been very helpful.

I know the time is short, but I have a number of questions that I think will be brief, or I hope will be. But I'm a teacher, incidentally, of background, and I want to assure you we do our best and the difference in high school achievement is due to the fact that today we