Recently there have been a number of thought-provoking articles on our jobs and training programs. Unfortunately, they often present myths as fact. I've learned that in Washington myths unchallenged become perceptions and, sadly, perceptions can become reality.
Let's look at the facts. The nation's jobs and training programs have been extremely useful and effentive. These programs have been used to reduce unemployment and improve the incomes and employability of millions of American workers. Despite assertions to the contrary, we actually know more about their effectiveness than about any other social program.
We are, of course, painfully aware of the problems, as well. But that awareness has led to major program changes and important new initiatives. Instead of surrendering to the complexity of the problem, we've worked to develop solutions.
Through a decentralized, locally run program, the Comprehensive Employment Training Act system (made up of more that 460 prime sponsors and more than 30,000 subcontractors) is serving more that 2 million unemployed citizens a year. We know from recent studies that those 2 million Americans are for the most part being wellserved.Sixty-four percent of those involved in public service programs were gainfully employed in the regular economy after 12 months. For CETA overall, 60 precent of the participants were employed after 12 months.
But perhaps more importantly, if you ask the people who are served, the jobless, more than 85 percent view the program positively.
CETA also has incrcreased the earnings of many participants dramatically. A recent study compared the earnings of CETA participants a year after they had left CETA. On the average, the incomes of those who were predominately unemployed prior to CETA almost doubled. The incomes of those who were predominately not in the labor force prior to CETA increased 5 1/2 times.
The facts clearly demonstrate that, for the vast majority of participants, the CETA program will mean increased skills, increased earnings and a better chance to share in the prosperity of our country.
Another popular myth is that public service employment programs are ineffective. Somehow the issue is always cast as public service employment versus training - countercyclical versus structural. The programs often are criticized for shifting their emphasis from structural to countercyclical objectives and back again.
The new CETA regulations recognize (although critics may not) that the two problems are related and that their relative importance shifts during the business cycle. The new CETA legislation provides for the capacity countercyclical public service progrmas. Their main focus is to provide jobs when unemployment is high for those who would be employed when the economy is at relatively full employment. Training is of relatively minor importamce under the countercyclical section of the legislation.
Recent studies make an excellent case for the inclusion of public service employment in any countercyclical strategy. Compared to a general tax cut, such a program is likely to be less inflationary, more quickly responsive and more equitable.
Studies by Tobin, Bailey, and Solow support this concept. Public Service Employment (PSE) programs target employment for those whose skills are not in high demand and therefore are a non-inflationary way to increase employment.The new legislation limits PSE jobs to families in financial need while general economic stimulus is much less targeted. The recent analysis also indicates that the public service employment is three to four times more efficient in creating jobs per dollar of additional budget deficit than all of the likely alternatives.
In 1976, the Carter administration inherited an unemployment rate of almost 8 percent. The economy was sluggish. The president decided to expand jobs through the CETA system as a major component of his economic stimulus package. Today the unemployment rate is 5.8 percent.
Few would argue with the overall accomplishment of the Carter administration in reducing unemployment. But many argue that the targeted programs are not having an effect on the hard-core unemployed.
Again, let's look at the facts: The unemployment rate for Vietnam-era veterans has dropped below the national average.
The employment statistics for minority youth are even more revealing of CETA's success. In the five years prior to the initiation of this administration's new programs - from March 1972 to March 1977 - employment for black male teen-agers fell by more than 14 percent. From March 1977 to March 1979, employment for the same group grew by 34 percent.
Perhaps the most puzzling myth I have observed is the assertion that the Carter administration is reducing its commitment to jobs and training programs. A recent article by John Berry and Art Pine in The Washington Post maintained that the administration has given up on the Humphrey-Hawkings goals of full employment. It claimed that new programs have been shelved and that youth programs and targeted programs enjoyed only modest support.
In fact, when Jimmy Carter came to the White House, our nation was spending only $3.8 billion on jobs and training. The 1980 budget has more than $11 billion for these programs.
We also are reviewing our experience with the Youth Employment and Demonstration Act programs. Out of this review will come major legislative proposals for programs to deal with youth unemployment.The president soon will submit a welfare reform package with a major focus on jobs.
Although we can demonstrate tremendous progress, we also realize the formidable challenge we now face in solving the problem of structural unemployment. Over the past year, the Carter administration has been working closely with the Congress as well as state and local government to overhaul the CETA system completely.
Under the new CETA, we are targeting our programs to serve those who need help most. But more importantly, we are concentrating on training and skills development.
The only way to continue to cut unemployment and reduce inflation as well is to increase the productivity of our work force.
We also have launched a major new partnership with the private sector.
The only permanent solution for the problems of structural unemployment lies with the business community. We have designed a system that will involve the business community in planning, operation and oversight of CETA programs through Private Industry Councils (PICs) in each local community. The councils will tie the jobs and training programs to the real needs of each local labor market. In addition, the new legislation provides a tax-credit incentive of employers who hire and train the structurally unemploved.
We also have taken steps to improve the management of our jobs and training programs.We have cracked down on waste, cut red tape, provided more technical assistance to local managers, and set up extensive monitoring and auditing systems to assure accountability. We want to be sure that we are delivering more job training and jobs for every dollar invested by the American taxpayers.
And finally, we have vigorously and systematically attacked fraud and abuse in the system.
We are still learning. But we are also taking action - sound, sensible action based on experience. The only other course would be to wait as the problems get worse, to wait for all the answers which we probably never will have.
Constructive criticism is absolutely necessary in this process of improving the CETA program.But we also need positive suggestions and criticism based on fact, not myths.