Report No. 81-56 EPW COMPREHENSIVE EMPLOYMENT CETA) M by Ilona Rashkow Specialist in Social Legislation Education and Public Welfare Division February 27, 1981 HD 5720 B CONGRESSIONAL RESEARCH senvnce THE uamxnv or couoness olum fllllllliallllllll Universitr of Missouri llll Ill” llllllllli 010-1 0 86030 ilihe (Iongressional Research Service works exclusivelv for the Congress. conducting research. analyzing legislation, and providing information at the request of cotninittees. Mem- bers. and their staffs. V The Servite makes such research available. without parti- ' *4" *‘1 7,manv forms incliiding studies. reports. Compila- LL ;idiidests. and background brieliiiqs. L'pon request- (IRS I z ,1” 1 b t rt » committees in analyzing legislative proposals and issues. and in assessing the possible effects <:>t these proposals ’ ~arid_ .tit3_l1p‘§“fiir alternatives. The Servites senior specialists and subject analvsts are also available for personal (‘onsultations in their respective fields of expertise. ABSTRACT The enactment of the Comprehensive Employment and Training Act (CETA) of 1973 resulted in the consolidation of many of the nation's employment and train- ing activities under one administrative system. This accomplished the first major change in these programs since their inception in the early 1960s. This paper briefly reviews the history of employment and training programs that pre- ceded CETA, describes the major elements of the program as it currently exists, and examines some of the issue surrounding the program in 1981. CRS-v CONTENTS O C O O I O O O O O O O O O O O O O O O O O O O O O O O O O O O I O O O O O I O C C O O O I O O O O O O O O O C O O O C O C C O O I O O O O O I O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O C O O I O O C O O O O O I O O O O O O O O O I O O O O I O C O O C I O O O O O O O O O O O O O O I O I I O C 1 II C O O O O O I O O O O O O O O O O C O I O C C O O O O O O O C C O O O O C O O I O O O O O I O AC OCCOOOO O O O O COOCOOOOCOOOOOOIOOOOOOCOOOOOOOOOOO O O O O O 00000 9 B. Comprehensive Employment and Training Services ................. 12 C. O O O O I O O O O O O C O O O I O C O O O O O O C O O O O O O I O O O O O O DO O O C O I O O O O C O O O O O O O O O O O O O O O O O O O O C O O O I O O O O O O I O O O O O O O E. Private Sector Initiative Program .............................. 20 F. Special Federal Responsibilities . . . . . .......................... 22 III. C C C C 0 O O O O O O C O O O O O O O O O O O O O O O O O O O O O O O O O O AC C C O O O O O C O O O O O O C O O O O O O O O O O O O O O O O C O O C O O O O B. O O O O O O O O I O O O O O O O O O O O I O O O O O C O O O C O C C O O O O O O C O O O O O CC I C O C C O O O O O O O O O O O O O O O I O O O O O O O O O O O I O O I O I C O O O O O O D. Preventing Fraud and Abuse . . . . . . . ... . . . . . . . .................... 28 NO O O O O O O I O O O O O O O O O O O O O O O O O O O O O O O O I O O I O O O O O O I O O O O O A. Termination of Individuals_from CETA Programs . . . . . . . . .......... 31 B. Postprogram Employment and Earnings ............... . . . . . . ....... 33 TABLE 1. Budget Outlays for CETA Youth Programs ................. . . . . . .... 17 TABLE 2. Selected Characteristics of CETA Participants, Fiscal Year 1979 . . . . . . . . . . . . . ............. . . . . . . . . . . . . . . . .... 26 TABLE 3. Cumulative Terminations from Programs Conducted Under Selected CETA Titles, Fiscal Years 1978 and 1979 . . . . . . . . . . . . . . . ....... 32 TABLE 4. Distribution of Terminees Out at Least 12 Months by Terminee Group and by Labor Force Status at Selected Time Points ...... 35 TABLE 5. Average Hourly Wage of Terminees Employed at any Time, Average Percent of Time Employed, and Average Annualized Earnings for Terminees out at Least 12 Months by Selected Time Period ........ . . . . . . . . . ... . . . . . ....... . . . . . . ................. 36 APPENDIX A: AUTHORIZATION LEVELS OF CETA PROGRAMS 1979-1982 .............. 37 APPENDIX B: COMPREHENSIVE EMPLOYMENT AND TRAINING ACT FUNDING ............ 38 O O I O O O O OOOOOOOOOOOOOCO C O O O O I CO0.0000CCOCOOOOOO CRS-Vii INTRODUCTION The decade of the 1960s was characterized by a proliferation of human re- source programs. Beginning in 1961, employment and training programs (then re- ferred to as "manpower" programs) grew from the relatively small provisions of the Area Redevelopment Act to a complex system of programs funded under differ- ent statutory authorities and aimed at different clientele groups. By the end of the 1960s and early in the 1970s criticisms were raised over the number of separate categorical programs; excessive duplication of systems for delivery of manpower services; and over centralization of program administration at the na- tional level. As a result, in 1973 Congress enacted the Comprehensive Employ- ment and Training Act (CETA), designed to achieve what has been described as a comprehensive manpower policy. The purpose of the Comprehensive Employment and Training Act was to provide a new and up-to-date charter for the manpower programs which were previously operated under the authority of the Manpower Development Act, the Economic Op- portunity Act and the Emergency Employment Act. The legislation eliminated the numerous categorical programs which were authorized under these separate pieces of legislation and substituted a relatively decentralized and decategorized pro- gram that was hoped to be more responsive to the diversity of local needs. In- stead of operating manpower programs through over 10,000 contracts with the Sec- retary of Labor, CETA operates through grants to about 475 local and State prime sponsors who plan and operate their programs to meet local needs. The basic structure of the Comprehensive Employment and Training Act is as follows: (1) Financial assistance is given to State and local governments for CRS-viii planning and operating comprehensive employment and training programs. Direct assistance is given to local governments of a specified size and the State gov- ernment is given responsibility for the balance of the State. (2) Financial as- sistance is given to State and local governments for a program of public service employment in areas of substantial unemployment. (3) The Department of Labor has the responsibility for providing financial assistance for employment and training programs for specified groups, and also has direct responsibility for research, training and technical assistance, labor market information, and re- lated activities. In the six years that the program has been operational, the statute has been amended five times, and funding has almost tripled from $3.8 billion in fiscal year 1975 to $9.4 billion in 1982. These changes have been primarily responsive to nationally recognized problems (e.g., rising unemployment during "recession and continuing high rates of youth unemployment) and have been accom- plished through the authorization of specific services that have been targeted on specific segments of the population. It has been argued that to some extent these actions represent a recatego- rization and recentralization of the employment and training programs. However, they also underscore the continuing question of how to achieve nationally estab- lished objectives in a decentralized and decategorized system. To date, the re- assertion of centralism and categorization has generally been accompanied by in- creased program funding. (See pages 38-39) The authorization of all of the CETA programs will expire during the 97th Congress. (Authorization for the youth program under Title IV A expires in June of 1981. All other programs, including services for the economically disadvan- taged, public service employment, special national programs, Job Corps, summer youth programs and private sector programs expire at the end of fiscal year 1982.) CRS-ix The most fundamental question is whether or not these programs should be reau- thorized and, if so, in what form. The Reagan Administration has proposed to terminate the public service employment component of CETA by the end of fiscal year 1981. (See the issue brief on this topic for more current information.) If reauthorized, some of the issues which are likely to be considered are: (1) How to provide effective services; (2) What should be the respective roles and interrelationships between CETA and other programs; and (3) How scarce re- sources can be maximized. (See issue brief "CETA: Reauthorization Issues" for a more detailed analysis of these issues.) THE COMPREHENSIVE EMPLOYMENT AND TRAINING ACT (CETA) I. DEVELOPMENT OF CETA There is much debate surrounding the actual inception of the nation's in- volvement in employment and training policy and activities. Garth Mangum in The Emergence of Manpower Policy traces U.S. policy regarding manpower require- ments to indentured servitude and slavery as early responses to the employment needs of a new continent. lj More traditional Federal initiatives related to employment and training can be traced back as early as 1862 with the passage of the Morrill Act which established the agricultural and mechanical land grant colleges, followed by the Smith-Hughes Vocational Education Act of 1917 which authorized funding for vocational education in specific occupations designated by Congress. Although the two laws were far apart in time, they were not in conceptualization. The emphasis in both was on the needs of the economy rather than the needs of the individuals participating. The structure, both economic and political, of the still predominantly agrarian society was reflected in the ‘ three occupational groupings for which it provided matching funds: agriculture, home economics, and trades and industry. 2/ The 1930s brought a period of experimentation with monetary manipulation, business self-government, direct cash relief, work relief, public works, farm if Garth L. Mangum, The Emergency of Manpower Policy (New York: Holt, Rinehart and Winston, Inc., 1969) 2/ Melvin L. Barlow, History of Industrial Education in the United States (Peoria, Ill.: Charles A. Bennett, Inc., 1967) CRS-2 production controls, social insurance, shorter hours and minimum wages. However, unemployment at 15 percent was higher in 1940 than in 1930. It was not until 1940 that the nation's real per capita income exceeded that of 1929. The employ- ment efforts were directed at temporary alleviation of distress, not elimination of unemployment. The manpower elements of a permanent nature were the Wagner-Peyser Act, establishing the United States Employment Services; the Social Security Act, including unemployment compensation; the National Labor Relations Act; and the Fair Labor Standards Act. The Federal Emergency Relief Act, the Civil Works Administration, the Public Works Administration, the Works Progress Administra- tion, the National Youth Administration, and the Civilian Conservation Corps pro- vided employment and income to millions of unemployed and built public facili- ties with otherwise wasted labor, but were charged by many with "leaf-raking" as their last contribution. Though some argued that unemployment was the result of lack of personal virtue and initiative, few argued that lack of education and skill was at fault. The Fitzgerald Act, designed to promote apprenticeship, was the sole evidence of public interest in skill training. There was no incentive to train for, or to attempt to place people in, nonexistent jobs. What the dec-A ade did produce was a commitment to use public policy to alleviate distress. Aside from the obvious short-run impacts of World War II on employment and manpower policy, more profound changes, under way for decades but culminating in that period, had long-term significance not recognized until the 19603. World War II brought to term the long process of industrialization. Since the bulk of the nation's labor force was committed to military combat, new entrants to the labor force were found and productivity of those available had to be increased. Retirements were delayed; retired workers were recalled; hours of work were ex- tended; and women were drawn into the workplace. The public vocational education CRS-3 system was marshalled to train 7.5 million people by the war's end. In addition to regular vocational education funds, nearly $400 million was appropriated by Congress between 1940 and 1945 for the training of war production workers. On- the-job training was expanded; jobs were broken down into a single skill; and simplified tasks were performed by unskilled and inexperienced workers. 2/ Contemplating the end of hostilities, Congress in 1944, sought means for rewarding and to some degree compensating, the millions of "civilian soliders" for their service in World War II. The most important of the GI Bill's provi- sions offered to pay a subsistance allowance, in addition to the full costs of up to four years of various kinds of education or training, for all veterans of over ninety days of military service. Of the 16.5 million men and women who served in the Armed Forces during that war, 7.8 million enrolled in the program: 2.2 million in colleges and uni- versities, 3.5 million in other schools, 1.4 million received on-the-job train- ing, and 700,000 were trained on the farm. The Veterans Administration has data on enrollments, but none on how much education and training was completed by how many. No study has ever been made of the economic benefits from the $14.5 billion World War II GI Bill expendi- tures or the additional $3.6 billion spent educating Korean conflict and Vietnam- era veterans. One survey made by the Veterans Administration found that the average income of veterans who had taken advantage of the GI Bill was $7,861, compared to $6,041 for those who had not. Assuming the difference to be a conse- quence of the added education, it was concluded that an additional $1 billion per year had brought into the Federal treasury as a return on the original public 2/ W.S. Woytinsky and Associates, Employment and Wages in the United States (New York: Twentieth Century Fund, 1953) pp. 177-178. CRS-4 investment. The calculation has obvious limitation, although there is no reason to doubt that a substantial income and tax revenue contribution resulted. The achievement of "maximum employment, production, and purchasing power" was made a national objective and a specific concern of the Federal Government by the Full Employment Act of 1946 which in addition to the above-quoted goal also established Council of Economic Advisors, the Annual Economic Report of the President and the Joint Economic Committee of the Congress. However, it was not until the 1960s that manpower training as a distinct program area came into being. The development of employment and training legislation and programs during the 1960s was influenced by at least three major factors: --The persistently high rate of unemployment (averaging in excess of 6 percent between 1958 and 1961); --The growing awareness of the pervasiveness of discrimination and the increasing strength of the civil rights movement; --The commitment at the national level to the reduction and eventual elimination of poverty. In attempting to deal with each of these problems, the Federal Government instituted a series of initiatives designed to provide the competitively dis- advantaged with the skills and competencies demanded in the labor market. With the enactment of the Area Redevelopment Act of 1961, the Federal Gov- ernment formally initiated its involvement in employment and training activi- ties. Although intended to assist areas experiencing chronic economic distress with low interest loans and grants for community facilities the legislation did authorize a modest training component. As the Area Redevelopment Act was being implemented in 1961, the nation was in its third recession in seven years. The unemployment rate averaged 6.7 per- cent for the year and unemployment was a paramount concern to policymakers. While it was agreed that macroeconomic measures would be used to stimulate the CRS-5 economy and reduce the aggregate level of unemployment, there was a perception that most of those who had become unemployed were heads of households with sub- stantial skills and experience. There was concern that many of these individ- uals would remain jobless because technological progress had made their skills obsolete. In response to the recession and the perceptions of technological displace- ment, the Manpower Development and Training Act was designed and, in 1962, en- acted. 3/ The Manpower Development and Training Act (MDTA) authorized training (either on-the-job or in vocational education institutions) and allowances (for subsistence and travel) for up to 52 weeks for heads of households who had a minimum of three years experience in the labor market or were from low income families. Services to out-of-school youth were authorized on a very limited basis. By the time there was programmatic activity under the Manpower Development and Training Act, unemployment had begun to decline, particularly among married adult males, and would continue to do so for the remainder of the decade. At the same time, there was a growing recognition of the labor market difficulties of youth and an increasing commitment to combating poverty and discrimination through manpower programs. Amendments adopted over the course of several years expanded the scope of eligibility for Manpower Development and Training Act pro- grams, extended the length of time over which a trainee could be paid a stipend, and increased the amounts of allowances that could be paid. The provision of 3/ The Trade Expansion Act of 1962 also authorized training, relocation and other services to assist workers displaced by increased international trade. In both the Manpower Development and Training Act and trade legislation, the individuals eligible for employment and training assistance were those who had been displaced from employment. Both pieces of legislation were predicated on the "compensation principle," i.e., assisting those adversely affected by social policies or trends that are generally beneficial. CRS-6 basic and remedial education and supportive services (e.g., orientation and coun- seling) to trainees was also authorized. The cumulative effect of these modifi- cations was to shift the focus of the program from those who had been displaced temporarily to those who had been excluded consistently. The change in the Manpower Development and Training Act transformed the pro- gram in such a way as to cause one observer to remark: "In effect, an emergency recession measure designed to provide technologically displaced, experienced, family heads with subsistence while they acquired new skills through either state-operated vocational schools or private on-the-job training in order to fill existing job vacancies has become a permanent, wide-ranging, primarily Federally funded and directed program, though with less clearly defined objectives than the the original bill." 2/ The declaration of the "war on poverty" in l§64 and the passage of the Eco- nomic Opportunity Act that same year led to the creation of several new employ- ment and training programs. The Economic Opportunity Act authorized a variety of approaches directed at eliminating poverty including education, housing, so- cial services and manpower programs. It was in the Economic Opportunity Act that the poor and minorities were designated as the primary targets of employment and training programs. §/ The Economic Opportunity Act resulted in the proliferation of programs such as the Neighborhood Youth Corps which provided work experience for in-school and out-of-school youth; New Careers and Operation Mainstream both of which provided work experience and training for poor adults; and the Job Corps, an intensive skills training program, usually in a residential setting 2/ Mangum, Garth L. MDTA: Foundations of.Federal Manpower Policy (Balti- more, Md.: John Hopkins University Press, 1968) .Q/ It is felt by many that the passage of the Civil Eights Act in 1964, while not authorizing any employment or training programs, was a landmark of major proportions in the development of U.S. employment policies. CRS-7 for disadvantaged youth. The Manpower Development and Training Act programs were administered by traditional State agencies and the Economic Opportunity Act established community action agencies as the deliverers of services in the be- lief that the traditional agencies had not adequately served minorities and the poor. By the late 1960s, a wide range of programs and services were in place. Z] In addition to these new programs, there were other Federal efforts which di- rectly affected the functioning of labor markets and the supply of labor, in- cluding the U.S. Employment Service, the vocational education system and the vocational rehabilitation system. In varying degrees, these programs were af- fected by the emergence of the employment and training programs and all of these efforts taken together comprised a collection of agencies and programs which provided a strikingly similar set of services for persons who were experiencing difficulties in the labor market. Since many felt that the nation's employment and training efforts were fragmented, duplicative and in need of reorganization if they were to meet their potential, policymakers began to focus on the need for an "improved" administrative and organizational structure and efforts were begun to develop "comprehensive" employment and training legislation. Under_MDTA, there were several administrative initiatives which combined the delivery of services, in some jurisdictions, under one administrative um- brella. At the same time, grants were provided to the governors and mayors of _Z/ In addition to previously mentioned efforts, an attempt was made to in- volve the private sector directly in the training of the disadvantaged. With Presidential leadership, a National Alliance of Businessmen, composed of leaders of the nation's major corporations, was formed and it launched the Jobs Opportu- nities in the Business Sector program, discussed later. ' CRS-8 large cities to establish State and local planning and coordination. The ob- jective in both instances was to develop a more rational delivery system as a means of increasing the efficacy of the programs. The thrust towards an improved administrative and delivery system occurred at the same time as, and was delayed as a result of, an increasing interest in direct job creation efforts, i.e., public service employment. In 1971, the Emergency Employment Act was enacted and public service employment was added to the job services available under other Acts. The other major factor influencing the development of CETA legislation was a commitment by the Executive Branch during this period to the use of special revenue sharing or block grants as a means of discharging Federal responsibili- ties in several social welfare areas. According to the revenue sharing theory, the Federal Government allocated funds to the States and localities to be used in broadly defined functional areas (e.g., manpower, community development, law enforcement, etc.). The States and localities had a great deal of discretion on how these funds would be used and the Federal Government was reponsible primarily for assuring compliance with the legislation. This concept was expected to move the authority out of Washington, D.C., and "back to the people." Efforts to restructure the employment and training system led to the passage of the Comprehensive Employment and Training Act which was primarily a statement of administrative policy. It subsumed under one act many of the then extant man- power efforts (under the Manpower Development and Training Act, Economic Opportu- nity Act, and Emergency Employment Act) and vested in State and localities re- sponsibility for planning, administering and delivering services to the unem- ployed, underemployed or economically disadvantaged. The Federal role was to be limited to assuring compliance with the law through plan reviews and program au- dits and providing technical assistance. CRS-9 II. MAJOR PROGAM ELEMENTS A. Overview As signed into law on December 28, 1973, the Comprehensive Employment and Training Act consisted of six titles; four of which authorized the planning and delivery of employment and training services. This legislation did not autho- rize any new employment and training services. Instead, it consolidated the au- thorization for many existing employment and training services and accomplished two significant administrative changes in the process: --It shifted to a substantial degree the authority for planning, implementing, operating, monitoring and assessing programs from the Federal Government to the State and local prime sponsors (see page 10) i.e., it decentralized . --It allowed the prime sponsors flexibility to design the services and the service mix around the needs of the jurisdiction's tar- get population i.e., it decategorized the program. Experience and factors external to the program resulted in several legisla- tive amendments and administrative modifications. During the recession of 1974, CETA was pressed into service as part of a strategy for combating rising unem- ployment and the emphasis of the act began to shift to countercyclical Public Service Employment (PSE) programs. In December 1974, Congress passed the Emer- gency Jobs and Unemployment Assistance Act, adding a new countercyclical PSE program (title VI) to CETA and authorizing $2.5 billion to create 250,000 addi- tional positions for one year. Faced with persistently high levels of unemploy- ment, Congress extended title VI in 1976, and expanded PSE as part of a national program to stimulate the economy. The 1978 amendments reorganized the titles of the Act as follows: Title I contains general and administrative provisions and CRS-10 the authorizations for appropriations. Title II authorizes a program of compre- hensive employment and training services for the economically disadvantaged, in- cluding transitional employment opportunities. Title III details the special Federal responsibilities including national programs and research and demonstra- tion activities. Title IV authorizes youth programs including the youth programs under Title II of the Youth Employment and Demonstration Projects Act of 1977, the Job Corps and the Summer Youth Program. Title V authorizes a National Com- mission for Employment Policy. Title VI authorizes a countercyclical public service employment program. Title VII authorizes a program of private sector opportunities for the economically disadvantaged. Title VIII continues the Young Adult Conservation Corps established by the Youth Employment and Demonstra- tion Act of 1977. Eligibility for funding is generally limited to "prime sponsors," thus the definition of prime sponsors plays a crucial part in determining the roles that the State and local governments play in direct administration of manpower pro- grams. The act defines a local prime sponsor as any unit of general local gov- ernment (that is, a city or county) with a population of 100,000 or more, which means that approximately two-thirds of the population is included in jurisdic- tions served by cities and counties, and one-third in areas served by the State. (There are presently 475 prime sponsors.) Funds may be used to finance the development and creation of job opportuni- ties and the training, education, and other services to enable individuals to se- cure and retain employment at their maximum potential. This includes programs and activities that had been financed under previous manpower legislation such as outreach, counseling and testing, referral, basic education, institutional and on-the-job training, supportive services, and subsidized employment programs with public and non-profit employers. These eligible activities may be carried on by CRS-ll the prime sponsor directly or may be contracted to other organizations. The determination of the appropriate mix of services and programs is at the prime sponsor's discretion. To receive financial assistance under the Act, a prime sponsor must estab- lish a planning council and submit a comprehensive employment and training plan, consisting of a master plan and an annual plan. The master plan is the long- term charter under which programs are operated and includes a detailed analysis of the economic conditions of the area as well as description of the administra- tive arrangements under which the programs will be operated. The annual plan provides a detailed description of the programs to be operated in the ensuing year. The plan must ensure that employment and training services will be pro- vided to those most in need of them. Governors must also submit a coordination and special services plan dealing with the relationship between programs under this act and other employment and training programs. The Secretary of Labor is required to review each plan to determine whether it meets the statutory requirements.‘ The Secretary is also required to act on complaints filed by persons who have exhausted the prime sponsor's grievance sys- tem and to investigate whenever he has reason to believe that a prime sponsor is failing to comply with the Act or its approved plan. The Secretary of Labor has. authority to revoke the prime sponsor's plan in whole or in part and to terminate or suspend financial assistance. Sanction may be invoked only after notice and opportunity for a hearing with a right of judicial review. CRS-l2 B. Comprehensive Employment and Training Services The original CETA legislation established a ". . . flexible and decentral- ized system of Federal, State and local programs" lg] to provide training and employment services for the economically disadvantaged, unemployed or underem- ployed. Title I was viewed as the primary title under which services would be provided and it authorized the full range of training and employment related services including: classroom and on-the-job training, work experience, public service employment, basic and remedial education, payment of allowances, coun- seling and orientation, job search assistance, and supportive services. The prime sponsors were given the authority to design their programs, choose the delivery mechanism and implement the services. They were also made responsible for deciding who would be served and in what ways. The 1978 amendments combined the old Title I (Comprehensive Manpower Serv- ices) and Title II (Public Employment Programs) into a single new title II tar- geted for the most part on the economically disadvantaged. The purpose of title II is to ". . . establish programs to provide compre- hensive employment and training services in order to ease barriers to labor force participation encountered by economically disadvantaged persons, to enable such persons to secure and retain employment at their maximum capacity, and to enhance the potential for individuals to increase their earned income. These programs include the development and creation of training, upgrading, retraining, and education."_ll/ Classroom training, usually conducted in an institutional setting, is de- signed to provide individuals with the technical skills and information required _lQ/ Section 2, Comprehensive Employment and Training Act of 1973 (P.L. 93-203). lf Section 201, Comprehensive Employment and Training Act, as amended. CRS-13 to perform a specific job or group of jobs. On-the-job training is training in the private or public sector given to a participant, who has been hired first by the employer, and which occurs while the participant is engaged in productive work which provides knowledge or skills essential to the full and adequate per- formance of the job. Work experience is a short term and/or part-time work as- signment with a public employer or private nonprofit organization that is de- signed to enhance the employability of individuals through the development of good work habits and basic work skills. Eligibility in Part B of title II is limited to the economically disadvan- taged, defined as family income at or below 70 percent of the Bureau of Labor Statistics lower-living standard budget. Part C of title 11 which provides for occupational retraining or upgrading of skills, has no income eligibility crite- rion. The program requires only that an individual be working at less than his or her full skill potential, primarily those in entry level positions or posi- tions with little advancement opportunities. C. Public Service Employment Public service employment operates under two sections of CETA--title II-D, aimed primarily at combating long-term or structural unemployment, and title VI, aimed at counteracting cyclical increases in unemployment caused by economic downturns. Title VI, the countercyclical public service employment program, was ori- ginally enacted in response to a rise in unemployment late in 1974 and was in- tended as a countercyclical supplement to the PSE jobs available under the old Title 11. As unemployment rose from 4.5 percent in August 1974 to 8.5 percent in May of 1975, an increase of approximately 3 million in those counted as un- employed, 260,000 public service employment jobs were funded and put into place. CRS-14 The eligibility criteria required only that an individual be unemployed or under- employed for 30 days. 12/ The Emergency Jobs Programs Extension Act of 1976 reauthorized and altered the Title VI public service employment program in two significant ways: 18/ (1) All jobs that were to be created had to be in projects that had an identifiable objective and could be accomplished in 12 or fewer months; (2) The eligibility criteria for participants were tightened to require that individuals had to meet an income test and that they had been unemployed for 15 of the last 20 weeks, had ex- hausted unemployment compensation or were from a family re- ceiving assistance under the Aid to Families with Dependent Children program. The public service employment program was a major component of President Carter's Economic Stimulus Program in 1977. As such, the program was slated to expand by more than 400,000 jobs over a nine-month period, reaching a target level of 725,000 jobs. In fact, the program reached a level in excess of 750,000 jobs in March of 1978. The revisions to title II in 1978 were prompted, according to the Senate re- port, by testimony that a large part of CETA funding was being expended for dead- end jobs which were devoid of any skill component and that, on the other hand, a significant number of public service employment jobs were filled by well-educated individuals who were not economically disadvantaged. In fiscal year 1977, for example, 77.5 percent and 72.8 percent of all enrollees in titles II and VI, re- spectively, had high school diplomas, and many had advanced degrees. In title II, less than half of all enrollees were economically disadvantaged and in title VI, .1g/ A resident of an area of excessively high unemployment, one having an unemployment rate in excess of 7 percent, was eligible after only 15 days of un- employment or underemployment. 12/ These criteria applied to all new jobs created in title VI and one-half of the vacancies that occurred in previously filled title VI positions. CRS-15 66.6 percent of all enrollees were low-income persons. By providing a large pro- gram for the structurally unemployed, the Congress hoped to achieve a better tar- geting or resources on those who were the least likely to obtain unsubsidized em- ployment and to insure that such persons were given the opportunity to hold mean- ingful skill-developing jobs. Basically, the purpose of title II-D public service jobs is to provide eco- nomically disadvantaged persons who are unemployed with transitional employment in jobs providing needed public service, and related training and services to en- able such persons to move into employment or training not supported by CETA. The allocation formula for appropriating title II-D funds to prime sponsors is: 25 percent based on relative number of unemployed; 25 percent based on excess number of unemployed over 4.5 percent in prime sponsor area; 25 percent based on unemployed in areas with unemployment at 6.5 percent or higher; 25 percent based on relative number of low-inocme adults lg] Title VI, on the other hand, provides for temporary employment during peri- ods of high unemployment. To be eligible, individuals must be: (1) unemployed for at least 10 out of the previous 12 weeks and unemployed at the time of en- rollment in the program, and (2) either from a family whose income does not ex- ceed l00 percent of the BLS lower-living standard income or from a family receiv- ing AFDC or Supplemental Security Income. Because this is a countercyclical program, by March 1 of each year the Pres- ident must report to Congress on the amount of money needed to provide jobs for 20 percent of the unemployed in excess of 4 percent or, if the unemployment rate _l£/ The term "low-income" is defined in Sec. 3(l6) as‘ . . . that amount which bears the same relationship to $7,000 as the Consumer Price Index. . . . bears to the Consumer Price Index of 1969, rounded to the nearest $1,000." CRS-16 exceeds 7 percent, 25 percent of the unemployed in excess of 4 percent. The al- location formula for Title VI distributes funds to prime sponsors as follows: 50 percent on total number unemployed 25 percent based on excess unemployed over 4.5 percent 25 percent based number of unemployed in areas of substantial un- employment (6.5 percent) Maximum wages for public service employment is limited to $10,000 adjusted up (but no more than 20 percent) by the ratio that local average wages bear to national average wages. The 1978 amendments set the average rate at $7,200; in 1980 the average wage limit was increased to $8,000. Duration in public service employment is limited to 18 months, subject to certain waiver provisions. Participation in any program under the Act is lim- ited to 30 months in any five year period. Prior to the 1978 amendments, the occupational mix of PSE jobs reflected both the national emphasis on employing the most disadvantaged and the local emphasis on providing services which require professional, technical, and mana- gerial skills. The wage restrictions of the 1978 amendments are expected to shift the PSE occupational mix to a greater concentration on low skill jobs, such as clerical workers, service workers, and laborers. D. Youth Programs Some of the current CETA programs directed at youth (generally ages 15-22) are federally operated; others are operated by States and localities. Title IV of CETA includes the Youth Community Conservation and Improvement Projects (YCCIP), the Youth Employment and Training Programs (YETP), the Youth Incentive Entitlement Pilot Projects (YIEPP), the Summer Youth Employment Program (SYEP), and Job Corps. Title VIII authorizes the Young Adult Conservation Corps (YACC). CRS-17 In addition, the public service employment components of CETA also provide services to youth. Table 1 shows budget outlays for CETA progams serving youth for fiscal years 1975-1980. TABLE 1. Budget Outlays for CETA Youth Programs (dollars in millions) Youth Program 1975 1976 1977 1978 1979 a] 1980 3/ Job Corps ‘ $170 $226 $202 $ 275 $ 376 S 404 Summer Youth Employment Program (SYEP) 381 459 575 670 681 545 Youth Employment and Training Program (YETP) 0 0 4 294 592 851 Youth Community Conservation and Improvement Projects (YCCIP) 0 0 0 61 140 140 Youth Incentive Entitlement Pilot Projects (YIEPP) 0 0 0 32 148 43 Youth Adult Conservation Corps (YACC) 0 A 0 0 139 307 153 TOTAL $551 $685 $781 $1,471 $2,244 $2,136 Other CETA Programs: (Estimated outlays by proportion of youth served in programs) Comprehensive Education Training Act (CETA) 1, 11, v1_§/ $ 900 $2,153_g/ $1,814 $2,727 $2,364 $2,115 TOTAL $1,190 $2,570 3/ $2,190 $3,117 $2,787 $2,547 a] Amounts for fiscal years 1979 and 1980 represent estimated expenditures. Ey Funds for youth under 22; data are not available for the number of youth served aged 22-24. 2/ Includes transition quarter. SOURCE: U.S. Department of Labor Factbook on Youth. CRS-18 When it was enacted in 1973, (CETA) contained two major youth programs: the Summer Youth Employment Program (SYEP) and Job Corps. The Summer Youth Employment Program (formerly called Summer Program for Economically Disadvan- taged Youth), authorizes a variety of activities in the summer months, but most youth are employed in part-time work experience in public or private nonprofit agencies. Program statistics indicate that the majority of SYEP participants return to school at the conclusion of the program. All participants of SYEP must be 14 to 21 years of age and economically disadvantaged. The Job Corps is one of the oldest youth programs, having been created in 1964 as part of the War on Poverty. There are currently 95 Job Corps centers. These centers, located in all areas of the country, are operated by a variety of organizations, both public and private. Thirty Civilian Conservation Centers are operated under an interagency agreement among the Departments of Labor, the Interior, and Agriculture. These centers are small (about 200 slots each), lo- cated on public lands, mostly in the South and Northwest. The remaining centers are operated under contract by private for-profit and private nonprofit corpo- rations, State and local government entities, Indian tribes, community-based organizations, and CETA prime sponsors. These contracted centers vary widely in size, ranging from 200 to 2,600 slots, with an average capacity of around 400. Job Corps assist impoverished and unemployed youth aged 16-21 by providing them with basic education, vocational skills training, work experience, counsel- ing, health services, and other assistance in both residential and nonresiden- tial settings. CRS-19 The Youth Employment and Demonstration Projects Act of 1977 (YEDPA), which amended CETA, created four major demonstration programs (described below), each representing a different way of addressing youth employment problems. The Youth Incentive Entitlement Pilot Projects (YIEPP) is unique in employ- ment and training programs in that it establishes an "entitlement" to a job for any youth who meets the program's eligibility criteria. It was designed to test the effect of guaranteed jobs on the high school return, retention, and comple- tion rates of economically disadvantaged youth. Approximately 45,000 young peo- ple 16 to 19 years old in 17 selected geographic areas are guaranteed year-round jobs if they agree to attend high school or work toward a high school equivalency degree. The jobs offer an average of 20 hours of work per week during the school year and up to 40 hours per week in the summer. The Youth Community Conservation and Improvement Projects (YCCIP) program was designed to develop the vocational potential of jobless youth by providing them with work of tangible community benefit. The program is for unemployed 16- through 19-year olds, with preference given to economically disadvantaged out- of-school youth with the most severe difficulty in finding employment. Seventy- five percent of the funds is allocated to CETA prime sponsors for basic program operations, 2 percent is for migrant and seasonal farmworkers youth, 2 percent for Indian programs, and 21 percent for the discretionary use of the Secretary of Labor. The Youth Employment and Training Program (YETP) was designed to enhance the job prospects and career preparation of low-income youths aged 16 through 21 who have the most severe problems in entering the labor force. A broad variety of employment and training programs, including work experience opportu- nities in community activities, outreach services, counseling education to work CRS-20 transition, institutional and on-the-job training, job restructuring and child care services are authorized. Eligible youths are from families whose incomes do not exceed 85 percent of Bureau of Labor Statistics lower living standard in- come level. Youths from families with lower incomes receive preference for en- rollment.\ Seventy-five percent of the funds is available by formula to CETA prime sponsors; of that amount, 22 percent is earmarked for in-school projects, with coordination and agreement of the local education agency. A large number of discretionary projects are also supported by YETP funds. The Young Adult Conservation Corps (YACC), which became Title VIII of CETA, was patterned after the New Deal's Civilian Conservation Corps (CCC). Its aim is to give young people experience in particular occupational skills through their work on conservation and other projects carried out at Federal and non- Federal sites. Young people aged 16 through 23 who are unemployed and out of school are eligible for the program. Preference is given to youths from high un- employment areas. Thirty percent of the funds is allocated in grants to States for State conservation efforts that include preservation, management, and im- provement of vegetation and wildlife; development, rehabilitation, and mainten- ance of recreational facilities; and natural disaster damage control and cleanup activities. YACC is operated by the U.S. Departments of Agriculture and Interior under the terms of an interagency agreement with the U.S. Department of Labor. E. Private Sector Initiative Program (PSIP) For several years Congress has indicated a growing interest in engaging the private sector more actively in employment and training programs. The economic stimulus package of 1977 included a New Jobs Tax Credit designed to subsidize net increases in private sector employment and Skill Training Improvement Program aimed at involving the private sector more actively in job upgrading efforts. CRS-21 The Youth Employment and Demonstration Projects Act of 1977 contained several new experiments to encourage the private sector to participate more actively in training and employing young people with labor market handicaps, including up to a 100 percent subsidy of their wages. Further, in the new title VII of CETA and in the Full Employment and Balance Growth Act of 1978, Congress empha- sized its conviction that the role of the private sector should be expanded to facilitate the training and employment of hard-to-employ individuals. Finally, the 1978 Revenue Act included a new Targeted Job Tax Credit as well as a revised credit to encourage employers to hire welfare recipients. Title VII of the 1978 CETA reauthorization amendments provided authority for a two-year demonstration of the effectiveness of various approaches to in- creasing the involvement of the business community in employment and training programs. In the 96th Congress, the program was reauthorized for an additional two years. The specific objectives of the demonstration are the following: --To increase private sector employment and training opportunities for CETA participants. -To establish Private Industry Councils to work with CETA prime sponsors to plan training and placement activities directed to- ward private sector employers. --To provide a vehicle for redirecting CETA's current emphasis on subsidized public service employment toward methods for finding private sector jobs for the unemployed. Upon passage of the CETA amendments in October 1978, all of CETA was put under a continuing resolution, delaying funds for PSIP activities. During fis- cal year 1979, prime sponsors had $25,000 each in planning funds for developing title VII plans. However, in May 1979, Congress had approved the reprogramming of $75 million from unobligated public service employment funds so that implemen- tation of PSIP could begin during the last quarter of fiscal year 1979. Grant instructions were then issued, and those prime sponsors with private industry CRS-22 councils in place and plans already established were able to apply for their title VII funds immediately and to have their PSIP program in operation during fiscal year 1979. Other prime sponsors were to submit title VII plans for fis- cal year 1980. F. Special Federal Responsibilities Title III of CETA authorizes employment and training assistance to special population segments that have particular disadvantage in the labor market, in- cluding Indian and other Native Americans, migrants and seasonal farmworkers, offenders, persons of limited English speaking ability, handicapped individuals, displaced homemakers, older workers, and other persons whom the Secretary of Labor determines require special assistance. Title III also provides for tech- nical assistance and training for Federal, State, and local personnel involved in the planning and administration of employment and training programs; for a comprehensive system to develop labor market information; and for research, de- velopment and evaluation. Federal funds are directed through grants and contractual agreements with industrial, education and State organizations, and with Federal agencies to special segments of the population to provide additional employment and train- ing services. Of the base amount available to the prime sponsors under title II parts B and C, the Secretary must reserve an amount not less than 4.625 per- cent for migrant and seasonal farmworker programs, and an amount not less than 4.5 percent for Indian and other Native American programs. CRS-23 III. EFFECTS OF THE 1978 AMENDMENTS The 1978 amendments reauthorized most of CETA programs through 1982. In addition, many provisions were added to more clearly direct program efforts to serving low-income or disadvantaged persons and to tighten management require- IIl€I'ltS . A. Eligibility Requirements The CETA reauthorization amendments targeted CETA resources largely to economically disadvantaged and low-income persons, except for the upgrading and retraining program authorized by title II-C. Applicants for other CETA programs must meet eligibility criteria based on both income and employment status. For example, public service employment opportunities are limited under title II-D to economically disadvantaged persons who have been unemployed 15 of the last 20 weeks; or who receive, or are members of families that receive, public assist- ance. lg] In fiscal year 1979, 90 percent of those enrolled in these programs were economically disadvantaged (up from 79 percent the previous year); recipients of public assistance, including Aid to Families with Dependent Children (AFDC), made up 26 percent of the total enrollment in comparison with about 25 percent in fiscal year 1978. (See table 2) 13 The trend described below must be viewed with caution because the de- finition of "economically disadvantaged" as used in the data has changed sub- stantially over time. Since October 1978, while the income standard has re- mained the same, additional transfer payments have been excluded from the defi- nition of income so that the standard has in effect been raised for those re- ceiving such transfer payments, most importantly, unemployment compensation. CRS-24 Increased enrollments of various other special groups in title II-B pro- grams also point toward more emphasis on serving persons with the greatest dis- advantages in the labor market. The proportion of women in the program in- creased from 51 to 53 percent over the 2-year period and handicapped partici- pants accounted for 7 percent of all enrollees compared with 5 percent the year before. About one third of all participants in fiscal year 1979 were black and 13 percent were Hispanic. (Comparisons with fiscal year 1978 data for blacks and Hispanics are not possible because of changes in reporting requirements and definitions. In fiscal year 1978, persons of Hispanic origin were included among black, white, and other races; in fiscal year 1979, Hispanics were recorded sep- arately.) (See table 2) Under title VI, PSE is earmarked for unemployed persons who have been un- employed 10 of the last 12 weeks immediately prior to program application and whose family income is at or below the Bureau of Labor Statistics lower living standard budget; or who received, or are members of families that received, pub- lic assistance 10 of the last 12 weeks immediately prior to application. The law further specifies that service is to be provided equitably to sig- nificant segments of the eligible population (determined by age, race, sex, and national origin) and that special consideration must be given to Vietnam-era veterans, disabled veterans, and public assistance recipients. In fiscal year 1979, the proportion of economically disadvantaged participants in the program rose from 81 to 86 percent. Welfare recipients accounted for about 19 percent of all title VI participants, and about 63 percent met the OMB-defined poverty level. Some increased representation was also noted among women (up 5 percent- age points from the year before) and persons with limited English-speaking abil- ity (up 1 percentage point). Thirty percent of all fiscal year 1979 partici- pants were black; 54 percent were white; and 12 percent were Hispanic. CRS-25 Within the general eligible population for each program and the specfic segments for each area, efforts must also be made to serve those most in need. This objective is to be accomplished through strict intake and assessment proce- dures and through job designing that accommodates lower income and less skilled persons. It is the responsibility of the prime sponsors to develop appropriate jobs for this eligible population. Characteristics of participants in PSE programs for fiscal year 1979 are shown in the following table. CRS-26 TABLE 2. Selected Characteristics of CETA Participants, Fiscal Year 1979 Characteristic Title Title Title IIB/ C IID VI ILS.tota1 ____________________________________________ __ 1,194,400 459,300 790,900 Percent ______________________________________________ __ 100 ‘ 100 100 Male ...................................... -.' ................ -- 47 52 57 Fem ale ...................................................... __ 53 48 43 Age: Under 22 years ........................................... -_ 48 23 22 22 to 44 years ____________________________________________ __ 45 63 33 45 to 54 years ____________________________________________ __ 4 9 9 55 years and over _________________________________________ __ 3 6 5 Education: High school student _______________________________________ __ 19 2 2 High school dropout _______________________________________ __ 29 26 27 High school graduate equivalent ____________________________ __ 39 44 42 Post high school attendee __________________________________ __ 13 28 29 Economic status: AFDC recipient __________________________________________ __- 18 13 12 Public assistance recipient __________________________________ __ 8 8 7 OMB poverty level 1 ______________________________________ __ 71 68 53 71-85 percent BLS lower living standard 2 ____________________ __ 1 1 1 Above 85 percent lower living standard ______________________ __ 1 1 1 Economically disadvantaged 3 __________________________________ __ 90 86 86 Race/ethnic group: White (not Hispanic) ...................................... -_ 51 55 54 Black (not Hispanic) ______________________________________ -_ 33 29 30 Hispanic _________________________________________________ __ 13 13 12 American Indian or Alaskan Native _________________________ __ 2 1 2 Other ____________________________________________________ _ _ 3 2 1 Limited English—speaking ability ________________________________ __ 5 5 4 Migrant or seasonal farm family member ________________________ __ 1 1 1 Handicapped _________________________________________________ __ 7 5 Offender _____________________________________________________ __ 8 5 5 UI claimant __________________________________________________ __ 5 11 12 Veteran status: Veteran __________________________________________________ __ 9 16 17 Vietnam-era 4 _____________________________________________ __ 4 6 6 Special 5 _________________________________________________ __ 1 3 3 Special disabled ___________________________________________ __ 1_ 1 1 1 In 1978, the poverty level for a nonfarm family of four established by the family size and location, does not exceed the most recently established pov' 03309 Of Management and Budget (OMB) W38 $6,661 erty levels determined with criteria established by OMB or 70 percent of the 3 The Bureau of Labor Statistics (BLS) lower living standard income level BLS lower living standard income level’ Whichever is high“ I I f '1 If ' l9"8 $11,546. 0§:np)erls,:)rrlI1wl£l:>Il;e}c,e(ivecs)l1f)x3rils aixnejiia-bet of a family that receives, cash we1- ‘ Served between Aug’ 5' 1964’ and May 7' 1975' and are under age 35' gate payments or has, 0,15 3 member of 3 family that has’ 3 total famjly income 5 Served in Indochinese or Korean theater of operations between August (for the 6-month period prior to program application) that, in relation to 1964 and May 1975. SOURCE: Employment and Training Report of the President, Fiscal Year 1979, p. 27. CRS-27 B. Wage Restrictions Title I of the CETA amendments of 1978 mandated an annual, average, feder- ally supported wage rate for public service employment (PSE) jobs equivalent to $7,200 for fiscal year 1979, as adjusted year-to-year and place-to-place in ac- cordance with the CETA area wage adjusted index. That provision was meant to reduce substitution, insure that the maximum number of employment and training opportunities be provided to participants, and assure that the types of PSE jobs funded be compatible with the skill level of disadvantaged persons in the CETA-eligible population. The index adjusts the average wage by area wage expe- rience, based on unemployment insurance system wage record data. Because wage rates generally increase, an upward adjustment of PSE average wages in most areas will occur over time. Several prime sponsors reported difficulties in developing programs that comply with the new average wage requirements despite innovative approaches such as job restructuring or combining PSE and training to allow more flexibility in pay. (The combined work-training approach, for example, allows the participant to receive a rate of pay that is more than the mandated average wage for that portion of time spent in PSE and the minimum wage for time spent in training, thus reaching an average wage that remains within the statutory guidelines.) As a result, in 1980 when Congress reauthorized the title VII provisions for an ad- ditional two years, an amendment to the average wage provisions was included to raise the base for computing the average wage index from $7,200 to $8,000. Besides containing restrictions on the average annual wages rates, the CETA reauthorization legislation continued the previous requirement that CETA funds not be used to pay participant salaries in excess of $10,000, indexed upward in some circumstances. The previous authority allowing prime sponsors to supple- ment CETA salaries with non-CETA funds was also authorized in title II-D public CRS-28 service employment programs and restricted to no more than 10 percent of the to- tal allocation in title VI programs. These changes were made to insure that jobs be entry level and thus aimed toward the disadvantaged CETA-eligible population. C. Tenure Limitations The CETA reauthorization placed a series of limitations on the length of time a participant may remain in certain activities, as well as for total parti- cipation in CETA. These included a 104-week limit in a 5-year period on class- room training; a 1,000-hour limit in a 1-year period and a 2,000-hour limit in a 5-year period on work experience; a 78-week limit in a 5-year period on public service employment; and a 30-month limit in a 5-year period on overall CETA par- ticipation. The 78-week limit on PSE participation was meant to insure that the transi- tional nature of public service employemnt be maintained and the maximum number of individuals be served with available funds. Provisions were included in the statute that allow the Department to grant a limited number of waivers to the 78-week restriction in areas where unemployment is high and prime sponsors are experiencing unusually severe difficulties in moving PSE participants into un- subsidized employment. D. Preventing Fraud and Abuse A major emphasis in the CETA reauthorization was prevention of program fraud and abuse. The law requires the Secretary of Labor to establish standards and procedures to prevent nepotism, conflict of interest, excessive legal fees, improper commingling of funds, kickbacks, political patronage, or similar abuses. In addition, each prime sponsor is required to establish an independent unit to monitor compliance with the requirements of the Act, the regulations, and the Comprehensive Employment and Training Plan. The Secretary of Labor is required CRS-29 to assess annually the effectiveness of each prime sponsor's independent moni- toring unit with particular regard to the adequancy of funding, staffing, train- ing, and insuring the independence and objectivity of monitoring practices and methods. CRS-31 IV. PROGRAM EFFECTIVENESS A. Terminations of Individuals from CETA Programs One indication of program effectiveness is provided by the record of pro- gram terminations. Table 3 compares the termination data for titles I (now II-B and C), 11 (now II-D) (counterstructural PSE) and VI (countercyclical PSE) from fiscal years 1978 and 1979. In fiscal year 1979, "positive" terminations result- ing from job placement and other activities designed to enhance employability in- creased only slightly for all three titles (from about 59 percent all termina- tions in fiscal year 1978 to about 61 percent in fiscal year 1979), with a cor- responding decrease in "nonpositive" terminations that did not lead to a job or some other activity that enhances employability. CRS=32 TABLE 3. Cumulative Terminations from Programs Conducted Under Selected CETA Titles, Fiscal Years 1978 and 1979 Emma) Tfifla Thu Type I HE/C II IID V1 V1 1978 1979 1978 1979 1978 1979 1978 1979 All terminations I 106 o 100. o 106. o 100. o 100. o 100. o 100. o 100. 0 Positive 1-- ------ 53. 3 61. 3 69. 2 69. 8 51. 4 56. 3 46. 4 46 5 Placements--- 43. O 44. 1 48. 3 47. 3 44. 5 46. 7 32. 6 36. 4 znnuna __ (6.4) (4.8) (10.2) (8.1) (.6) (.3) (.3) (.3) Indhgct'________-____;__----_- (23.2) (25.7) (26.5) (27.2) (27.0) (29.7) (16-2) (20-6) 3,u.__ _ (13. 4) (13. 7) (11. 6) (12.1) (16. 9) (16.9) (16. 1) (15.5) other u___ ____ -- 15. 3 17.2 20L 6 22. 5 6. 9 9. 6 7. 8 10. 1 Nonpodfiv, . 41. 2 38. 7 36. 3 30. 2 43. 6 43. 7 59. 6 53. 5 1 tuba. gm.-uugugnggqg, 8 Participant has left the CETA llfolnm because of (0) enrollment in full-time ecedeanic or yoeetionhl schools, (b) enrollment in an employment Ind tnlninx program not funded under CETA, ((3) transfer to programs under mother CETA title (except summer youth pron-uns). or (d) com- pletion of CETA procrun objectives not involving entnnce into unsub- sidized mployznent. 0 Participant has left CETA program {or reasons other than unsubsidized employment or reuona cited in tootnote 6. Enmplee include phrticiphnt: who are nnmooesml job relernlr in whom no further CETA participation 8 panned and nu-ticipenta who rinse niahle nnsnbddiud unployznut. lion: Deunnzlrnoteddtotohhbeanudronnding. 1 ru-ucipent in plnced (through the spam: or otherwise) in unsnbeidiufl unplnyment after receiving only antruch, inthke, And employment and tnining nu-vino. Participant may (I my not have received supportive uwioee. 0 Unsnbddiud unployrnent hu hem secured for the participant by the prune sponsor or it: went one participation in training or subsidized elno ployment activity. Puticipent he: received employment and tnining serv- ice: Ind my or my not hove received supportive ea-vies. 0 Unlubuidiud cnplaynunt, including entnnee to 6 bunch olthe Armed Ioreu. huboun uncured through naennsatherthhnphounntbytheptinne tponnorcthupomcre CETA-mndednhunnteu. __ _ SOURCE: Employment and Training Report of the President, 1980. Although the greatest increase in positive terminations occurred under title VI, the countercyclical program, placements rose by only 6 percentage points over the previous year, largely attributable to increases in the indirect placement category (individuals placed in unsubsidized employment after partici- pating in CETA training, employment, or supportive services). Nonpositive ter4 minations showed a corresponding decrease from nearly 60 percent in fiscal year 1978 to about 54 percent in fiscal year 1979. A similar pattern emerged with regard to title ll=D, the counterstructural program, where all positive terminations rose by nearly 5 percentage points over the prior fiscal year and indirect placements increased from 27 percent to As in title VI, nonpositive terminations declined from 49 nearly 30 percent. to 44 percent over the year. CRS-33 To some degree, the increased record of placements in unsubsidized jobs under both titles II-D and VI may reflect the recently enacted 78-week limit on tenure in PSE jobs. In contrast to the increase in positive terminations in these two titles, there was only a marginal increase in all positive terminations for title II-B and C programs (formerly title I) during the year (a 0.6 percentage point rise). At 47 percent, the proportion of terminations resulting from job placements of all types declined by 1 percentage point over the previous year while termina- tions for other positive reasons (excluding transfers) increased somewhat. Non- positive termination remained about the same level in both years. B. Postprogram Employment and Earnings Information on early post-program experience of CETA participants has been developed through the Continuous Longitudinal Manpower Survey (CLMS). This sur- vey is being conducted by the U.S. Bureau of Census with funding from the Depart- ment of Labor. It is tracing the employment and earnings experience of a sample of participants for up to 3 years after their enrollment in programs conducted by State and local governments under CETA. Two followup reports,_1§/ based on interviews with participants about 18 months after entry, are now available, one on those who entered CETA between January and June 1975 and the second on entrants in fiscal year 1976. The re- ports compare earnings before and after program participation, controlled for 12/ Continuous Longitudinal Manpower Survey, Followup Report No. 1 (18 Months After Entry), Post-Program Experience and Pre-Post Comparisons for Ter- minees Who Entered CETA in January-June 1975 and Continuous Longitudinal Man- power Survey Followup Report No. 2 (18 Months After Entry), Post-Program Ex- perience and Pre-Post Comparisons for Terminees Who Entered CETA During Fiscal Year 1976 (July 1975 to June 1976) (Washington: Westat, Inc., for the U.D. Department of Labor, Employment and Training Administration, Office of Program Evaluation, July 1978 and March 1979. ICRS-34 inflation, for persons who were enrolled in CETA adult-oriented activities (classroom and on-the-job training, adult work experience, and public service employment) under titles I, II, and VI. The first report gives estimates on 320,900 terminees who had been out of the program at least 3 months at the time of the follow-up interviews in late 1975 and 1976 (about two-thirds of all the January-June 1975 entrants) and a subgroup of 193,000 who had been out of the program for at least a year. Report No. 2 provides data on an estimated 424,000 terminees, who had been out of the program for 3 months (almost three-quarters of all the fiscal year 1976 entrants), with longer term data for a subgroup of 250,000 who had been out for at least a year. Because terminees are included irrespective of their reasons for leaving the program, the data are representa- tive of both early dropouts and completers. Since there was no comparison group, however, the reports cannot compare the experience of program participants with those of similar persons who did not participate. Hence they show only gross effects of the program on its partici- pants. The key findings of the first two followup analyses are: --CETA participants had more employment and earnings after the pro- gram than before (see tables 4 and 5). --Postprogram employment and earnings improved gradually over time. They were higher a year after participants left the program than in the first months after termination. --The overall gain masks major differences between participants who had stable employment backgrounds and those who had histories of limited employment. Participants with relatively good employment and earnings the year before entering CETA achieved a good level after the program too. However, they did not regain their prepro- gram level of employment and earnings, and the average gain for all terminess suffered as a result. On the other hand, those with a lower level of employment and earnings before enrolling in CETA achieved a modest average level after the program, which repre- sented a very sizeable gain over their preprogram experience and a greater gain than the average for all terminees. --Some 86 percent of the terminees from the fiscal year 1976 group gave a positive rating to the CETA program: 58 percent said they CRS-35 were "satisfied" with it and 28 percent said they were "very sat- isfied." TABLE 4. Distribution of Terminees Out at Least 12 Months by Terminee Group and by Labor Force Status at Selected Time Points [Percent] Terminee group and labor force status Time point Entered January—June 1975 1 Entered J uly—June 1976 2 Employed Un- Not in Employed Un- Not in employed labor force 3 employed labor force 3 Prior to entry: 121nonths ________________ -_ 51 20 ~ 29 43 26 31 9 months _________________ __ 52 21 27 42 28 30 6Inonths _________________ __ 48 25 27 38 33 29 3Inonths _________________ _- 38 35 27 33 40 27 1 month _________________ -_ 27 ‘ 46 27 24 48 26 After termination: 1 month _________________ __ 52 27 21 50 28 22 3 months _________________ __ 53 25 22 53 26 22 6 months _________________ __ 53 24 23 55 24 21 9 months _________________ __ 56 21 22 58 22 20 12 months ________________ __ 58 22 20 60 21 19 1 Estimates for 193,500 terminees out at least 12 months. SOURCE: CLMS Follow- Up Report No. 2, pp. 6-73 and app. D, tables 42 3 Estimates for 251,100 terminees out at least 12 months. and -73. ' Persons in school or another training program, in an institution, or not seeking work because of family responsibilities or ill health or for other reasons. NOTE: Detail may not add to 100 percent because of rounding. SOURCE: Employment and Training Report of the President, 1980. CRS-36 TABLE 5. Average Hourly Wage of Terminees Employed at any Time, Average Percent of Time Employed, and Average Annualized Earnings for Terminees out at Least 12 Months by Selected Time Period Entered J anuary-June 1975 Entered July 1975—June 1976 Employed at any time All terminees Employed at any time All terminees Time periods Average Average Average Average Average Average Estimated hourly percent annualized Estimated hourly percent annualized number wage of time earnings number Wage of time earnings employed employed Prior to entry: 12 to 10 months-_-_ 118, 000 $3. 19 53 $3, 370 131, 300 $3. 18 43 $2, 850 9 to 7 months ____ __ 123, 100 3. 27 51 3, 230 128, 200 3. 14 40 2, 430 6 to 4 months ____ __ 115, 000 3. 25 44 2, 620 120, 000 3. 09 36 2, 070 ,3 to 1 months ____ __ 95, 300 3. 10 31 1, 610 110, 000 3. 10 29 1, 600 After termination: 1 to 3 months ____ __ 144, 100 3. 20 55 3, 690 185, 500 3. 30 53 3, 680 4 to 6 months ____ __ 137, 200 3. 41 57 3, 960 176, 300 3. 51 57 4, 120 7 to 9 months ____ _- 134, 000 3. 54 58 4, 130 175, 800 3. 63 59 4, 400 10 to 12 months__-_ 137, 200 3. 54 61 4, 650 176, 400 3. 77 61 4, 990 SOURCE: CLMS Follow-Up Report No. 2, app. D, tables 44 and 74. CRS-37 APPENDIX A: AUTHORIZATION LEVELS OF CETA PROGRAMS I979-I982 (dollar amounts in billion) FY79 FY80 FY81 FY82 Title II: Parts A, B, & C-- Comprehensive Employment Services $2 Open end Open end Open end Part D--PSE $3 Open end, but not more than 60% of the total appropriation for title II. Title III: National Programs Not more than 20% of the total appropriation, minus that appropriated for title II-D and title VI. Title IV: Youth Programs Total $2.5 $2.4 Open end for Job Corps and Summer Youth Program. Youth Employment Demonstration Programs were only authorized through FY 1980, but were ex- tended by the continuing reso- lution through June 5, 1981. Title V: National Commission for Employment Policy Open end Open end Open end Open end Title VI: PSE An amount sufficient to fund jobs for 20% of the un- employed over 4%, exceplt when unemployment reached 7%, then sufficient funds for 25% or the unemployed in excess of 4%. Title VII: PSIP $0.5 $0.525 Open end Open end Title VIII: YACC $0.35 $0.4 Open end Open end CRS-38 APPENDIX B: COMPREHENSIVE EMPLOYMENT AND TRAINING ACT FUNDING (dollars in thousands) FY 1975 FY 1976 FY 1977 FY 1978 Title I Comprehensive Service $1,580,000 a] $1,580,000 dj $1,880,000_g/ $1,880,000 1/ Manpower Service Title II Public Employment Programs 400,000 2/ 400,000 g] 400,000 gj --- 1,120,000 3/ 1,140,000 y --- Title III National Programs 239,000 3/ 233,400 df 239,330 g] 387,930 hf 370,000 y Summer Youth Employment 548,050 by 528,420 3/ 595,000 _/ 693,000 if Title III-C and VIII Special Youth Programs "' --- 1,000,000 hf --- Title IV Job Corps 175,000 3/ 175,000_d/ 197,500 g] 417,000 if 68,000 3/ Title VI Emergency Job Program 875,000 3/ 1,625,000 ff 6,847,000 hf --- TOTAL CETA $3,817,050 $5,661,820 $12,736,830 $3,377,930 3/ Labor-HEW Appropriations Act, FY 1975 (P.L. 93-517). b/ Urgent Supplemental for Summer Youth (P.L. 94-36). 3/ Urgent Supplemental (P.L. 93-624). d/ Labor-HEW Appropriations Act, FY 76, (P.L. 94-206). e/ Emergency Supplemental Appropriations, FY 76 (P.L. 94-266). f/ Continuing Resoution, FY 76 (P.L. 94-41). _g/ Labor-HEW Appropriations Act, FY 77 (P.L. 94-459). h/ Economic Stimulus Appropriations Act, FY 77 (P.L. 95-29). __ Amounts agreed to by Conference Committee and Adopted by both the House and Senate, and contained in the Further Continuing Appro- priations Act, FY 78 (P.L. 95-205). 1/ Labor-HEW Appropriations Act, FY 78: CRS-39 APPENDIX B: COMPREHENSIVE EMPLOYMENT AND TRAINING ACT FUNDING (dollars in thousands) FY 1979 3/ FY 1980_§/ FY 1981_1/ FY 1982 E] Title II Parts A, B, and C-- Comprehensive Employ- ment and Training Services $1,914,000 $2,054,000 $2,117,000 $2,117,000 Part D--Transitional Public Service Employment for the Economically Disad- vantaged 2,517,000 1,485,000 2,199,000 2,814,000 Title III Special Federal Responsibilities 372,000 536,011 305,700 378,000 Title IV Part A--Youth Employ- ment Demonstration Programs 714,000 826,094 875,000 1,125,000 Part B--Job Corps 296,000 415,700 561,000 749,000 Part C--Summer Youth Program 740,000 608,567 839,000 766,000 Title VI Countercyclical Public Service Employment 3,475,000 1,627,000 729,000 1,142,000 Title VII Private Sector Program 75,000 325,000 150,000 325,000 Title VIII Young Adult Conservation Corps 217,000 250,254 200,000 0 TOTAL CETA $10,320,000 $8,127,626 $7,975,700 $9,416,000 J] Continuing Appropriations, FY 79 (P.L. 95-482). k/ Continuing Appropriations, FY 80 (P.L. 96-123). 1/ Continuing Appropriations, FY 81. m] President Carter's Request. .mofiHwEom ofioocmlaoa cw voxoameoco mo uonfiac onu co comma Nmm vow mmouo uomcomm oewua ocu c«:u«3 ucoehoaafiocs Hmaucoumnnm mo mmouo cw vomoaaeocz popes: o>«uoHou ocu co womon Nmm mNm.¢ mo mmoo Ixo cm womoaafiocs uonesc o>MumHou onu co comma Nmu mvomoaoeocs uonesc o>«um~ou osu so uomon Nam mo muomcomw oeflua ou Nmw “Q uuom .mowH«Eom oaoucmnsoa ca muazoo mo uonesc o>«uoHou co NN\H NH Mvozoam Ifioas noses: 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