certain private sector jobs are very important. It is laudable for people to have them in the public sector and I could also say vice versa on both of those.

Mr. ESCH. One of the variables you would have would be flexibility of meeting the individual needs and the community needs, and so on. Flexibility would be a part?

Mr. SHEPPARD. What the total needs are, right, and what the individual wants.

Mr. Escн. So, any system we should develop should have this component of flexibility at the local level?

Mr. SHEPPARD. Yes, I agree with that, but I also want to repeat the significance of the high turnover rate in the public sector.

Mr. EscH. Let's get into that for a minute. You emphasized there were at the State and local level proportionately extremely high turnover rates. What would you attribute that to? Would you attribute it to the fact that they were meaningless dead end jobs which people wanted to leave?

Mr. SHEPPARD. Without talking like a professor now, I would have to do a study and anything I say is guesswork. I am sure that some of the things you have mentioned are involved. It is also true that the private sector in general pays higher wages than the public sector and we are always trying to keep the public sector up with the private sec

tor.

Mr. EscH. But it is very possible that because of a high turnover rate, those jobs are not as desirable as the one for which they left.

Mr. SHEPPARD. Yes, so I would agree that the critical point is therefore that if somebody is in an undesirable job, he is going to be looking around for a desirable job, right?

Mr. ESCH. You mentioned the fact that there were many positions that could be filled if they had funds at the State and local government. Why don't they have funds at the State and local government?

Mr. SHEPPARD. My general understanding is that we have placed too much reliance on real estate tax as a basis for getting local revenues there is a sort of a taxpayer's revolt going on and you wouldn't like to be on the county board to vote an increase in the real estate tax.

Mr. ESCH. So, in effect, one variable is the appropriate tax but, in effect, the people have decided they do not want increased taxes many times over.

Mr. SHEPPARD. It depends on the source and nature of the taxes.

Mr. ESCH. Do you believe that we could have a large expenditure of additional funds at Federal level or increased taxes at Federal level without having a reaction from citizens?

Mr. SHEPPARD. I think with the right orientation we could convince enough American people that we are lacking and suffering from certain public services which we had better have and certain things which we need, think we need or want. We always are willing to pay for such a thing.

Mr. EscH. Sometimes the figures approach 40 percent in terms of all types of tax structure. Do you think we will ever reach a point where we have at the Federal level reached a saturation point when we can no longer tax the private sector in terms of the needs or desires in the public sector?

Do you think we will ever reach that point?

Mr. SHEPPARD. All I can say is anything like that is possible. I don't know what the probabilities are.

Mr. Escн. Have you ever thought what that point might be?

Mr. SHEPPARD. Not in terms of precise percentages. There is a lot of literature on what percent of the average European's income goes into taxes and what he gets for them is also a critical point. What do you get for your taxes is also a critical point.

There are a lot of things that we pay for through the private sector that they pay for through the public sector. The critical thing, again, is what percent of the total pay goes for what kinds of services we think we need or we want.

Whether you call those taxes or not, I don't care. Let's say, if my health is taken care of through a private health insurance system, I could call that a tax. That is one of the things I have to pay for out of my income.

Mr. Escн. Basically, you are not really as concerned as to whether the Government takes over more and more services or services for the individual, or whether the private sector performs these.

Mr. SHEPPARD. Or vice versa, it doesn't bother me if some of the services are provided by the private sector, like daycare or nursing homes, but under appropriate standards. I am not going to get in the old argument about private versus public. I said at the beginning there is a false dichotomy here and there is an interaction between the two.

I could go on and expand on the need for services and for hiring more people in the public sector; you rae increasing purchasing power for goods and services of the private sector which in turn would need more workers.

It is not an either/or proposition.

Mr. ESCH. If you had a choice in which you could take an individual and place him either in the private sector where he was contributing in terms of taxation or in the public sector in which he would be providing a service to his fellow man, but at the expense of Government, Tassume your choice would be in the private sector?

Or don't you think you could make the choice?

Mr. SHEPPARD. It depends on the service he is providing. If he is making golden diaper pins in the private sector or is working in a hospital as a laboratory technician, I would choose the latter.

Mr. ESCH. We are not talking about diaper pins. We are talking about real people out of work and a tax rate that approaches 40 percent. We are talking about whether or not and to what degree do we want to put people into "meaningless dead-end jobs".

Obviously, from your testimony, people don't like the public service jobs, so they move. So, I think we are talking about the real world. Thank you very much, Mr. Chairman. My time is up.

Mr. DANIELS. I now recognize the gentleman from Pennsylvania, Mr. Gaydos.

Mr. GAYDOS. Dr. Sheppard, you are the first witness I have heard in a long time who made such concise staatements going down to the heart of the matter.

You stated that the JOBS program has failed. Do I understand you correctly? In your understanding, has it failed?

Mr. SHEPPARD. I don't like to use words like "failed." I think they created a net of 35,000 jobs and this is not a criticism of the private sector. It could be a criticism of the kinds of people that went in to the jobs, too, but it certainly did not solve the problems it was designed to solve. OK, it failed.

Mr. GAYDOS. If my frame of reference is correct, they were kicking around a figure of 200,000 jobs, but you mentioned 30,000, those that stayed on and are now permanently employed.

Mr. SHEPPARD. Thirty-four thousand is the last figure I saw.

Mr. GAYDOS. Is my concept proper when I make a statement that in the public service area, a job can be productive, it can produce something in the economic stream?

Mr. SHEPPARD. Yes; I agree with you.

Mr. GAYDOS. Every public service employment opportunity or job is not a drain on the economy. Many of them produce things.

Mr. SHEPPARD. Or they provide services that are necessary for the growth of the private sector. Yes.

Mr. GAYDOS. And many times they are in competition with the private sector and a comparable job in the employment area, isn't that true?

Mr. SHEPPARD. Yes.

Mr. GAYDOS. You mentioned a long list which you call the laundry list indicating why the private sector failed in solving the problem. I would like to have your observation as to whether or not you will include foreign competition which is becoming so critical.

I think that is the most critical area and one which is woven intrinsically into the problem about which we are talking. Has your calculation included that factor?

Mr. SHEPPARD. No; I merely talked about the general aggregate demand in the private sector for jobs but one of those factors explaining the leveling off or dropping of the aggregate demand by the private sector might be this foreign competition.

Mr. GAYDOS. And the inability for the foreign private enterprise, I mean the private enterprise system under our concept of laissez faire type of government, their inability to solve our unemployment problem.

Mr. SHEPPARD. I think it is a joint responsibility. As you say, if we have to put the whole monkey on the back of the private sector, I think we shouldn't. I think many people in the private sector are objecting to the Government saying, "Let George do it." There needs to be a cooperation and partnership here rather than this kind of adversary, antagonistic situation.

Mr. GAYDOS. We have had several witnesses. In fact, yesterday, one of our colleagues testified that he thought the area we should concentrate our attention on should be to provide jobs in the less than expert field, the common man, putting grits on the table. I am happy to hear you say in order to provide that type of a job, which requires less training, less know-how, less professionalism, that you must of necessity include at least 50 percent in the area of professional training, expert training, engineers, planners. I think that is a concept you tried to put before us.

Mr. SHEPPARD. I said in the study that I did-I haven't seen all of the data of a more recent study-50 percent of the new jobs these may

ors and their aides estimated they needed were in the professional and technical fields.

I don't have the figures with me, but I could provide the committee with that. It isn't 50 percent in each one of these functions. It goes from 24 percent professional and technical in some functions, up to 75 percent in some other municipal functions.

Mr. GAYDOS. Could we illustrate that by talking about a stonemason, a man who builds a stone wall. Before he builds it, he must have a professional engineer design the wall.

Mr. SHEPPARD. An architect.

Mr. GAYDOS. And technically, a man in the field who would look at the location of the wall and take into consideration the drain, isn't that right? That is what you are talking about.

Mr. SHEPPARD. Yes, plus supervision.

Mr. GAYDOS. And there are varied degrees of professional training and expertise which are needed. We passed a bill last year and for reasons best known to the administration, the President saw fit to veto the measure.

In that measure, we specifically provided for a new concept and new approach to manpower training in all areas.

I am sure you were exposed to that legislation and know of it. I am concerned that in our present considerations we are ignoring and bypassing the very fundamental and necessary element in this entire picture, that is, that you must connect of necessity manpower training along with the public service employment aspect. What do you think about it?

Mr. SHEPPARD. If you are talking about technical and professional problems?

Mr. GAYDOS. Yes.

Mr. SHEPPARD. I think we need it across-the-board.

Second, there was also in the bill a little provision having to do with the idea of midcareer development which I keep running across more and more, now.

First, I learned about this through my work on problems of middle management and executives, guys in their forties, late forties, early fifties who want a radical change in their occupational life. That is what is happening to some of those people in Seattle now.

Whether they like it or not, they are being forced to make a radical change in their lives. Some of them are finding that they like it, those that found some new and interesting jobs.

This is also occurring and I see this in the research I have recently completed with these white male union members in Pennsylvania essentially blue-collar workers, they, too, have a desire for a really new and different job.

They are getting bored with the kind of job they have. They would take advantage of a training program that would allow them to upgrade to a better position either with their present employer or someone else. They have thought very frequently and are serious about the idea of changing to a new type job.

Many of those people could move into the kinds of job you are talking about, not at professional or technical level, but semiprofessional level. If we are going to lick this pollution problem, we can't just use high school dropouts who qualify only for unskilled jobs.

7

Mr. GAYDOS. If you hire a sewage treatment plant employee for 1 manual work, handling the floodgates or checking machinery, to enlarge your operation on the productive end, you also must consider employment of a chemist, an accountant, administrator and supervisor, isn't that true?

Mr. SHEPPARD. Right, those are real jobs.

Mr. GAYDOS. I am concerned that the legislation we are considering today is going to be 50 percent effective.

Mr. SHEPPARD. This is a fascinating paradox in that you are talking as I should and I am talking as I think you should. We are trying to get a veto-proof bill and maybe we will just have to make that sacrifice at this point in history.

Mr. GAYDOS. Thank you very much, and I want to compliment you for your very concise and clear statement.

Mr. DANIELS. I recognize the gentleman from Wisconsin, Mr. Steiger.

Mr. STEIGER. Mr. Chairman, I wasn't present for Dr. Sheppard's opening statement. Allow me to pursue that last comment you made about this veto proof bill. What would you recommend to this committee, knowing that the three bills that are now before us are not veto proof? Do we go back to the House-passed bill last year that was developed on a bipartisan basis and supported by the administration? Would that be one way of trying to do it?

Mr. SHEPPARD. I really don't feel that I can give an intelligent answer to that unless I thought about it for awhile. It is a beautiful dilemma you are putting me in. I am sorry to hear that you think that maybe these bills are not veto proof. I thought this is what the Congress was trying to do. All I can do is pray that they don't veto it, because I thought it was a rather severe compromise with the bill which was previously passed by the Congress and which some other people said was a compromise. So, this is a compromise on a compromise, with a very small number of jobs, and it bothers me especially at a time when the rate of unemployment doesn't seem to be going down very much.

If it is going down at all, it is not at a fast enough rate. I am sorry to hear the possibility that it might be vetoed again. I really can't answer the question as to what I would recommend. I have to first of all put myself in the minds of those who are advising the President as to what they would accept and they haven't been making me privy to what they are thinking about.

Mr. STEIGER. I understand that.

Mr. SHEPPARD. You tell me that and then I can answer the question. Mr. STEIGER. Clearly, our problem is that the bills that are now in the House, and one bill in the Senate of which the Daniels bill is a modification are not at all acceptable nor are they compromises.

Mr. DANIELS. Is the gentleman speaking for the administration, now?

Mr. STEIGER. No, but I would be willing to stake my own reputation on what I think is a legitimate analysis of what the administration's position is and this does pose a dilemma because we can go through the exercise of passing a bill simply to make a political issue out of it. Such action doesn't increase the productivity of this Nation. It doesn't solve the unemployment problem nor does it help those in need of public service jobs. I really want to get something done and I