AS THE budget-cutting knives are being sharpened, it is important to try to view those programs most likely to be cut as they are -- not as symbols of waste or symbols of the national effort to help the poor. The symbolism, in fact, often doesn't reflect the reality. Consider Exhibit A: counter-cyclical public service employment (PSE). It sounded wonderful until it was tried.
Economists saw PSE as a way to provide employment during economic downturns without increasing inflation; local politicians saw it as a means of rescu- ing troubled municipal budgets with federal money; and those concerned for the poor believed that such jobs would provide the first step onto the career ladder for disadvantaged minority workers.
As everyone has learned since the massive increase in PSE set in place by the Carter 1977 stimulus program, it couldn't be done. First, the increase took nearly a year to put into effect, so that its major impact was felt just as inflation was becoming the principal problem in the economy and when unemployment rates were falling. Next, the aims of the local officials asked to run the program and those who wanted to help the poor were in direct conflict with one another. At first, the localities proceeded to do what made sense to them: fire large segments of their work force and then rehire them with federal funds at the same relatively generous wages they had been receiving. These employees were far from being the people the civil rights leaders had in mind at the inception of the program. They tended to be young, white, well-educated and male. In order to get the numbers up, the Labor Department ignored who was hired.
In 1978, Congress changed the program radically to meet the other objective, that of helping the poor and genuinely unemployed. The eligibility requirements were tightened, the wage levels were reduced, more training was required and an 18-month limit was imposed on any person's tenure in a public service job. But the 1978 version is even less amenable to rapid shifts of funding level than the relatively simple 1977 program. A rapid increase now could only be accomplished by abandoning the changes that made the programs focus on the poor.
In fact, it may be difficult to get this new program to its currently assigned level. Enrollments in 1979 were well below what Congress has appropriated, and even now are about 70,000 less than the 1980 target of 450,000. There is nothing wrong with this slow pace. Localities are learning how to operate a public service employment program as just one part of a training and employment effort to help the hard-to-employ. For the first time, they must concentrate on getting people out of PSE and into regular jobs, not just on getting them into the program.
What is wrong is considering the need for this program to have anything much to do with the business cycle. The push toward a balanced budget could provide the chance to get rid of this misconception once and for all. A moderate-sized, steadily supported program may well help otherwise unemployable people move into regular jobs, given time and thoughtful management. Maintaining it as a counter-cyclical tool ensures only that the needs of the poor will be slighted, and that they will be the first to go if a rapid expansion of the program is undertaken.