deficiencies which Congressman Bennett recognized in the public services.

I would say that the fastest economic growth that is reasonably possible over the next few years, if unaccompanied by any additional programs, is most unlikely to reduce the unemployment rate below 5 per

cent.

Obviously some of our current unemployment is caused by the recession, by the tight money, the other economic conditions with which we are all familiar.

But I believe that it can be demonstrated that a substantial part of the current unemployment problem is the reemergence of the problem of chronic hard-core unemployment that we had begun to recognize in the early 1960's. The dimensions of this chronic unemployment problem are such that economic growth is very unlikely to reduce the national unemployment rate below 5 percent.

I would like to make one added comment on the trigger mechanism. I think it is relevant here. One of the changes in definition. that I referred to was to count the people who are employed in such a program as the public service employment program would be as employed persons rather than unemployed persons.

Historically, WPA workers were counted as unemployed and the very large unemployment rates that we find reported for the 1930's included the count of the WPA workers as unemployed.

Now if we developed a large-scale public service employment program combined here with the trigger mechanism, putting unemployed workers into this program, it might by itself set off the trigger and end the program.

So we might well have a kind of a yo-yo effect. If we had as many as 400,000 workers in a public service employment program, I recognize that is a larger program than is presently contemplated. To illustrate the point, the transfer of 400,000 workers from the count of the unemployed into the program where they would be counted as employed would by itself reduce the national reported unemployment rate by five-tenths of a percentage point.

So that if we had a 5 percent unemployment rate when the program started, this program would reduce the unemployment rate to 4.5. With another tenth of a percentage point decline, we would end the program and ending the program would result in a rise in the unemployment rate, assuming, as seems very reasonable, that the people thrown out of this program would not be able to find other jobs.

Mr. DANIELS. That thought occurred to me as the sponsor of H.R. 3613. How would your solution be?

Dr. KILLINGSWORTH. It seems to me that a possible solution to this problem would simply be a provision in the bill that in calculating the triggering mechanism, the trigger point, you count your people in the program as unemployed rather than employed.

This does not necessarily affect the figure announced for the national unemployment rate. You could have that, but there should also be a calculation of what the unemployment rate would be in the absence of this program or with the enrollees in this program counted as unemployed as virtually all of them would be if the program were terminated.

I believe that the need for this kind of program is a persistent one. I think it is going to take many years for us to develop adequate longrange remedies.

I would prefer a permanent type program. I recognize the kinds of pressures that have resulted in consideration of a temporary program. I believe that the experience with a temporary program is very likely to lead to a more permanent type of program.

I believe further that the trigger mechanism is one approach, of course, to the matter of terminating the program when the need is no longer there.

I think we also found with regard to the WPA, however, back in the 1930's, that when the labor market switched from depressed conditions to boom conditions, WPA rolls reduced themselves automatically.

People were not clinging to the WPA jobs in preference to private employment. When private employment became available, they left WPA by the tens of thousands. So, in a sense, if we look upon the public service employment as a kind of transitional measure, then when other jobs become available, people will voluntarily leave public service employment programs, so that is another possible approach.

Mr. DANIELS. Do you have any particular philosophy as to how public service employment should operate?

In other words, we have three bills before us today, H.R. 17, H.R. 29, H.R. 3613, and each differ from the manner in which public service employment should become effective.

Dr. KILLINGSWORTH. I did not come prepared to talk on the details of each of these approaches. I understand you have a witness who will follow me who is prepared to discuss those points.

Mr. DANIELS. Dr. Killingsworth, I was very much impressed by your testimony in Detroit. I chaired that hearing. I would appreciate it if you would give us the benefit of your views and you could submit a supplemental statement and I will be pleased to circulate your statement to all of the members of the committee.

Because of the pressure of time, I am going to call on Mr. Esch to ask a question.

Mr. ESCH. Thank you very much, Mr. Chairman.

Dr. Killingsworth, we are glad to have you with us today. In tribute to you, I wore my wolverine tie. I welcome you because I used to teach in the Department of Labor and Industrial Relations a few years ago.

I have some special identification with you, although we may have some disagreements with you today. On page 2 of your testimony you indicated that President Nixon vetoed the Manpower Act in part because it included a public service employment program and that this year the administration vigorously opposes the bills in both Houses which provide for such a program.

I think the President vetoed the Manpower Act not because of public service employment but because of the nature of the program. The President has this year, and did last year, support public service employment programs. The question is what is their nature, what is the relationship between public service and other manpower training programs and, more significantly, what kind of phase-out programs for the individuals are you going to have. These are the inherent questions rather than public service employment as such.

You have indicated your interest in the belief that we should have a continuing public service employment program as part of one exponent of manpower training.

Dr. KILLINGSWORTH. Yes.

Mr. ESCH. You have also, though, given the implication that although the program would be continuous, we should encourage individuals to move where possible from public employment into the private sector. Would that be a correct statement?

Dr. KILLINGSWORTH. Certainly. I would not like to downgrade public service employment. I have been in public service myself for many years and I don't think it is an unworthy kind of activity.

On the other hand, if we can create by whatever method such jobs in the private sector to provide employment for everybody who is willing and able to work, fine. I would say let's provide mechanisms to facilitate the transfer.

Mr. Escн. One of our goals then should be to coordinate our manpower training programs and public service programs so we could do that.

Would that be a laudable goal?

Dr. KILLINGSWORTH. Yes, I think so.

Mr. Escн. The other point that you raised, which was an interesting one, was that in the latter part of the 1960's inherent to our problem is the great downturn in the defense industry and the space industry. A great deal of the unemployment, roughly 800,000 to a million, individuals have lost their jobs directly by that displacement, even though the economy is going up.

Is that a summation of your views there?

Dr. KILLINGSWORTH. Yes. The coin has two sides. A lot of the reduction in reported unemployment during the period 1965 to 1969 was the result of the draft, the increased military spending and these other factors which we all knew would be temporary.

These factors are now being changed; that is, we are reducing military spending, we are reducing the Armed Forces, and this is contributing to unemployment.

Mr. EscH. I am pleased to have you reiterate that the President is winding down the war and changing the space program and that inherently is a problem which causes unemployment. It is not an evil scheme of the Republicans to have people out of work.

I have several other questions but we will see how our time goes.
Mr. DANIELS. Mr. Hawkins?

Mr. HAWKINS. I would like to indicate to Mr. Killingsworth that I, too, listened to him in Detroit and also today, and I think that he has made a real contribution to the subject.

Mr. Chairman, there is one thing that I would like to clear up. Does the administration have a public service employment bill pending in this committee?

Mr. DANIELS. Not to my knowledge.

Mr. KRIVIT. No. Not at this time.

Mr. HAWKINS. Are they supporting one of the bills? I am trying to clarify what my good friend from Michigan has said about the administration support of the public service employment program.

I was wondering what way has this support been exhibited by the administration.

Mr. ESCH. If the gentleman would yield.

Mr. HAWKINS. If the gentleman from Michigan would clarify his

statement.

Mr. EscH. If the gentleman would yield, a member of HEW indicated to a Senate committee that he was willing to have public service employment as a part of the family assistance plan. That testimony came last week.

Secondly, I believe that the question will be further clarified when the Secretary of Labor appears before our committee later in the week or early next week.

Mr. HAWKINS. My understanding is that the administration opposed the public service employment program in the Senate last week.

Mr. Escн. I believe that if you will look at the record, they opposed the specific bill of Senator Nelson and I would be happy to clarify for you why they are opposed to that.

Mr. HAWKINS. I wish you would. Did I understand the administration is introducing public service employment program next week, a bill to accomplish such a program?

Mr. ESCH. HEW has indicated that they would support public service employment within family assistance programs and that the Secretary of Labor will further clarify the relationship between that and manpower training when he appears later this week or early next week.

Mr. HAWKINS. I certainly hope so in view of the present crisis that they do something real soon and I am pleased to know that some feeble attempt will be made.

Mr. EscH. "Feeble" is your adjective, not mine.

Mr. HAWKINS. I think in terms of the great number of persons who are suffering, for whom I am speaking, those in my congressional district. What has happened does seem to be feeble indeed and I hope relief will be given at an early date.

Thank you.

Mr. DANIELS. I now recognize my distinguished colleague from New Jersey, Mr. Forsythe.

Mr. FORSYTHE. Thank you, Mr. Chairman.

Just one question. It may be just that I am new and really don't know the background of your testimony on the last occasion, but your term "hidden unemployment" mystifies me. I would like you to expand on that a little bit, Doctor.

Dr. KILLINGSWORTH. Our national unemployment statistics reflect or provide for the counting of a man as unemployed only if he has recently looked for work, only if he has taken some specific concretestep within the preceding 30 days to apply for a job, to answer an ad or something of that sort.

It is generally agreed among students of the subject that long-term unemployment often results in discouragement. That is, when a man in a small town has already applied to all of the employers and has been told over and over again, "Don't call us, we will call you," he may not be actively applying for a job, even though he is able and willing to work and would immediately go to work if one of the employers came back to him.

So these people are not counted as unemployed. They are counted. as not in the labor force. I call them the "hidden unemployed." It is

possible to calculate with a reasonable degree of accuracy how many hidden unemployed there are.

At a high level of reported unemployment there is also a high level of hidden unemployment-people who would take jobs if they were available, people who would actually resume looking for jobs if they thought they had some reasonable chance of connecting. That is the concept of hidden unemployment.

Mr. FORSYTHE. What is your estimate of that as you relate that problem?

Dr. KILLINGSWORTH. The increase in hidden unemployment in the lower half of the labor force in the middle 1960's, I calculated around 700,000 men. It is a very substantial figure.

Mr. DANIELS. I now recognize the distinguished colleague from the State of Wisconsin, Mr. Steiger.

Mr. Steiger, you have exactly 4 minutes.

Mr. STEIGER. Mr. Chairman, I will apologize to Professor Killingsworth but I am delighted to see you again.

Your statement last year was one of the best that the subcommittee received in all of the hearings that were held across the country. I must admit I am somewhat disturbed, however, by your statement this year.

You indicate that it is your best judgment that a public service employment program is the best and most important missing ingredient of a manpower policy. That doesn't answer the question, however, of the scope and direction that public service employment should follow? The gentleman from Michigan may have touched on this and, if he did, I will not take any more of your time or the committee's time. How do we assess, for example, the decision of the administration to provide 200,000 public service jobs through family assistance plans? Do you think that particular step makes sense from what you know of it?

Dr. KILLINGSWORTH. I was quite surprised by that and I might say that was announced after I had written this statement. It was a surprising move, in fact, because those jobs seem to have many of the characteristics that the President was most critical about in his veto message of the manpower bill last December.

As I read the press reports of the HEW proposal, it did seem that these would be dead end jobs necessarily. They would be low level jobs, and some would be paid less than the national minimum wage, if the press reports that I read are accurate.

They would almost necessarily be WPA-type jobs. All of which were characteristics which the President ascribed to the public service employment aspects of the manpower bill in his veto message.

Mr. STEIGER. Let's first understand that the concept as we understand it in this committee is that it is the prevailing Federal wage and the minimum State wage, whichever is the highest.

So I respectfully suggest that it is not by any means going to be characterized as being something less than the minimum wage. Second, I am afraid I would disagree with you if you analyzed this ard to the bill vetoed last year. The fight last year

conference committee to endorse the employer

transition is the key factor that led to the

proposed is a transitional-type program,