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Transition Reports (1977) - Labor Department (1)
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The original documents are located in Box 38, folder "Transition Reports (1977) - Labor
Department (1)" of the John Marsh Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 38 of The John Marsh Files at the Gerald R. Ford Presidential Library
U.S. DEPARTMENT OF LABOR
OFFICE OF THE SECRETARY
WASHINGTON
November 23, 1976
NOV 2 20 1876
MEMORANDUM FOR RUSS ROURKE
SPECIAL ASSISTANT TO THE PRESIDENT
FROM:
JAMES H. HOGUE JLH
EXECUTIVE ASSISTANT TO THE SECRETARY
As we discussed, I am attaching a preliminary draft
of our current issues papers for the transition.
We are updating this compilation and will have a clean
copy to give our transition counterparts during our
first meeting which is now scheduled for Tuesday,
November 30.
Attachment
ETA
EMPLOYMENT AND TRAINING ADMINISTRATION
LIST OF ISSUES
Priority
PROGRAM ISSUES
Level
i
Youth Initiative
2
Funding of Community-based Organizations under CETA
3
Renewal of Mandate of the National Alliance of Businessmen
2
Senior Community Service Employment Program
1
Minnesota Work Equity Demonstration Project
2
Appointments to the Federal Advisory Council on the Employ-
ment Service
1
Appointments to the National Study Commission on Unemploy-
ment Compensation
POLICY ISSUES
1
Counter-recessionary Measures
1
Employment and Training Alternatives to Income Maintenance
1
Administrative Changes in CETA
1
OMB Circular A-46-J and CETA Allocations
2
Financing State Employment Security Agencies (SESA's)
2
Employment Security Automation Plan (ESAP)
2
Implications of Brock Bill on Unemployment Insurance Program
Operations
2
Deferral of State Loans from Federal Unemployment Account
LEGISLATIVE ISSUES
1
Reauthorization of CETA
1
Future of CETA Title VI PSE Programs
1
Legislation on Youth Programs
1
Waivers for Pilot Experimentation and Demonstration Projects
2
Work Requirement Changes in WIN Legislation
2
Work Requirement Reform in Food Stamps Legislation
2
Changes in Immigration Policy
1
Termination of Federal Supplemental Benefit (FSB) Program
REGULATORY ISSUES
2
Publication of Apprenticeship Regulations (29 CFR 28 and 29)
LEGAL ISSUES
3
Unilateral Apprenticeship Programs in Jointly Sponsored Program
Areas
Program Issues
YOUTH INITIATIVES
I. Issue
Important youth initiatives within existing legislative authority
have been planned but deferred.
II.
Background
The continued unacceptably high rates of unemployment among youth,
particularly within the inner cities, has been well documented.
The Comprehensive Employment and Training Act (CETA) programs
provide substantial resources to youth programs including $595
million for one million summer jobs, nearly $200 million for the
Job Corps and 60 percent of the CETA title I positions. Con-
siderable attention has also been paid to additional initiatives
for youth that are outlined in the Employment and Training Admin-
istration (ETA) interim strategic planning paper on youth ini-
tiatives that is scheduled to be completed by December 1, 1976.
III. Status
Several special initiatives that have been planned but not con-
summated can be acted on quickly. The first deals with the
utilization of up to $140 million of Fiscal Year 1977 CETA
titles I and III discretionary funds plus Work Incentive Program
(WIN) funds to mount a youth hiring program with the National
Alliance of Businessmen (NAB) to train and employ 100,000 dis-
advantaged youth in the largest companies in the United States.
The prepared plan has received general acceptance from NAB but
will require Presidential impetus to gain the commitments from
business leaders in the largest corporations. This program can
be mounted immediately.
Another initiative deals with the internal organization of ETA
and its ability to provide a special focus on youth programs.
Presently, a wide range of organizations have different responsi-
bilities for dealing with youth programs. However, within the
Office of Comprehensive Employment Development, which houses
most of the employment and training programs, the Office of Job
Corps has the responsibility for serving youth 16-21. An
organizational change has been prepared to expand the scope of
the Job Corps office to deal with a series of youth programs
including the summer youth program and the NAB youth initiative
noted above to result in a program in excess of $1 billion for
youth. This organization will also serve as a foundation for
additional youth initiatives that may be planned either admin-
istratively or legislatively. The establishment of a new office
can be done at minimal cost.
IV. Critical Dates
Both initiatives noted above do not have absolute resolution
dates but represent opportunities for quick and inexpensive
steps requiring no expansion of previously planned outlays to
produce positive results for the youth unemployment problem.
PROGRAM ISSUE: COMMUNITY-BASED ORGANIZATIONS
I. Statement of Issue
The issue is the supplemental funding of nationally recognized
Community-Based Organizations.
II. Background
Prior to the advent of CETA, the Department of Labor provided
direct financial support for large-scale employment and training
programs to three nationally recognized Community-Based Organi-
zations (National Urban League, SER (Jobs for Progress), and
Opportunities Industrialization Centers). The Federal funds were
used by the national organizations to fund subcontracts with the
local affiliates of these organizations with which to operate
training and employment related programs for disadvantaged
individuals.
With the advent of CETA, the national programs were decategorized
and it became necessary for local affiliates to seek funding
through the State and local CETA prime sponsors. The headquarters
organizations continue to receive national funding at a much
reduced level to provide local affiliates with technical assis-
tance in dealing with CETA prime sponsors.
The national organizations are concerned that the local funding
base will, over the years, deteriorate and result in greatly reduced
services for their client groups. There is an indication that SER
(Jobs for Progress) is at this time experiencing difficulty in
securing local funding.
These organizations would like the Department of Labor to augment
the funding of the nationally Community-Based Organization when-
ever local funding falls short of a preestablished level. The
Department has never agreed to such a commitment, primarily
because a guarantee of supplemental funding from the national
office would create a situation where CETA prime sponsors might
well cut the local affiliates from their own budgets knowing that
the Department of Labor would be obliged to step in and fully
restore the projects. This would create an unsupportable demand
on the limited resources available under CETA title IIIA and would
foreclose use of these resources for other purposes. It would also
act in direct opposition to the intent and purpose of CETA and
the concept of local determination of employment and training
priorities.
III. Status of Work on the Issue
Not applicable.
IV. Critical Dates
It can be expected that one or more of the Community-Based
Organizations may wish to discuss this matter with the Secretary
to obtain a commitment from the Department to "hold harmless"
all funding for these national organizations and in fact to
increase their present funding level using discretionary funds
from title IIIA of CETA.
PROGRAM ISSUE: NATIONAL ALLIANCE OF BUSINESSMEN
I. Statement of Issue
A decision will be needed relative to the renewal
of the National Alliance of Businessmen's Presidential
mandate.
II.
Background
The National Alliance of Businessmen (NAB) is a non-
profit organization formed by a group of business
leaders in 1968 at the request of the late President
Lyndon Johnson. The basic purpose of the organization
has been and continues to be the promotion of business
community participation in federally sponsored efforts
to assist disadvantaged persons obtain gainful employ-
ment. The current president of NAB is V. J. Skutt,
who is chief executive officer of the Mutual of Omaha
Insurance Company. Staffed mainly by executives on
loan from industry, NAB maintains offices in more than
100 cities. Department of Labor support for their
administrative structure runs about $13 million annually,
funded from title IIIA of the Comprehensive Employment
and Training Act (CETA). Since 1968, NAB has received
periodic mandates from the President. Their current
mandate, issued by President Ford in 1975, calls for
them to focus on the employment needs of welfare
recipients, ex-offenders, and Vietnam-era veterans.
In Fiscal Year 1976, NAB helped the following numbers
of persons obtain employment in the private sector:
224,000 disadvantaged adults; 3,000 disabled veterans;
122,000 other veterans; and 11,000 ex-offenders. Also,
in the summer of 1975, NAB assisted 222,000 disadvantaged
young persons obtain summer jobs.
III. Status of Work on the Issue
Not applicable.
IV. Critical Dates
It can be assumed that NAB will, within the first 6
months of 1977, approach the President for a renewal of
their mandate.
PROGRAM ISSUE: SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM
I. Statement of Issue
The issue is the amount of the Administration's Fiscal
Year 1978 budget request for the Senior Community
Service Employment Program.
II.
Background
The Senior Community Service Employment Program (SCSEP),
authorized by title IX of the Older Americans Act,
provides subsidized part-time employment for elderly
low-income persons in community service work. The
Fiscal Year 1977 appropriation of $90.6 million, which
is to be spent during the 12-month period of July 1977 -
June 1978, will support 22,600 subsidized jobs. The
Fiscal Year 1978 budget request now being prepared asks
for $113 million to be available for spending over the
succeeding 15-month period of July 1978 - September 1979.
This amount would serve only to maintain the SCSEP at
the 22,600 job slot level. The Congress, however, has
shown a clear tendency to expand the program from year
to year. In addition, pressure for an expanded program
can be expected from the National Council of Senior
Citizens, the National Farmers Union, the National Council
on the Aging, and the National Retired Teachers Association-
American Association of Retired Persons. The authorization
for appropriation in Fiscal Year 1978 is $200 million,
considerably higher than the request now being developed.
III. Status of Work on the Issue
Not applicable.
IV. Critical Dates
The critical dates would depend on the new Administration's
timetable for developing a revised Fiscal Year 1978 budget
request.
MINNESOTA WORK EQUITY DEMONSTRATION PROJECT
I. Issue
Shall the Department fully fund this demonstration effort
to provide employment opportunities for all employable
recipients of major income transfer programs having work
requirements as a condition of continued eligibility for
benefits.
II.
Background
This issue is highly significant for the following reasons:
a. There are approximately 10 million individuals annually
subjected to DOL administered work requirements in the UI,
WIN and Food Stamp programs. The mounting costs of publicly
supporting this population has contributed to a growing
concern that work requirements are not being effectively
administered. Public support for income transfer programs
can be expected to diminish unless action is taken to assure
that a maximum effort is being made to require employable
recipients to contribute to their self-support, through
employment.
b. Present work requirements vary substantially in terms
of philosophy, purpose and stringency. The differences
raise questions of equity and create complex administrative
and operational problems.
C. The demonstration is a modest but significant incre-
mental step toward conceptually and operationally ratio-
nalizing the three major income maintenance systems.
Minnesota submitted a proposal in August 1976 for a full
scale demonstration of the ETA developed Work Equity approach.
After extensive discussions at the Executive Staff level,
Mr. Kolberg agreed to fund a planning grant. HEW staff have
been consulted.
III. Status of Work
The planning grant runs from November 15, 1976, through
March 31, 1977. Specifications for a research design
RFP have been developed. It is expected that a contractor
will be selected in early January. A Federal project manage-
ment unit has been established.
IV. Critical Dates
(a) March 31, 1977 - The date at which a fully developed
proposal will be submitted. Decision needed whether or not
to fully fund the demonstration project, shortly after this
date.
I. Statement of Problem
Appointments must be made to the Federal Advisory Council
on the Employment Service, a statutory advisory group
reporting to the Secretary of Labor that is currently
being reactivated.
II.
Background
The function of the Federal Advisory Council on the
Employment Service is to advise the Secretary on policy
matters with regard to the Federal-State system of employ-
ment service programs. The Council meets a continuing
need to prepare advisory opinions on contemplated
legislation, program policy, and operational implementation.
The Council was established in 1933 by the Wagner-Peyser
Act for the purpose of formulating policies and discussing
problems relating to the broad area of employment security.
Its emphasis, however, was heavily on unemployment
insurance problems. After a separate advisory council
was established by the Social Security Amendments of 1970
to deal exclusively with unemployment insurance, the
Council ceased operating altogether. In 1974, a charter
was filed as the first step in reactivating the Council.
III. Status of Work on Issue
The U.S. Employment Service is drafting an implementation
plan which discusses the proposed format of the reactivated
Council, the criteria that should be used for membership
selection, and a suggested roster of candidates.
Presently under consideration is a Council of approximately
16 members consisting of five employer representatives,
five employee representatives, and six public represent-
atives. Candidates should be individuals who function as
policymakers or influence leaders and who possess a broad
national perspective on the employment service system or
knowledge of State and local operations. In addition,
Council membership should be balanced with respect to such
considerations as geography and minority representation.
IV. Critical Dates
Council members should be selected as soon as possible
in order that the Department is in compliance with the
Wagner-Peyser Act.
I. Statement of Issue
Immediate action is needed to name members of the
National Study Commission on Unemployment Compensation.
II.
Background
The 94th Congress passed a major unemployment insurance
bill. One of the key provisions was the establishment
of an executive/legislative Study Commission on Unemployment
Compensation. This Commission will study the unemployment
insurance program, including the program's basic objectives,
and make recommendations on future direction of the program.
While the UI program has been in existence for some 40 years,
a thorough review of the program has not occurred. Attention
will be given to the role of unemployment insurance as an
income maintenance program and its relationship with other
income payments such as retirement and welfare; role of
unemployment insurance as an economic sector and its
relationship with the rest of the economy; coverage
issues; methods of financing the program; and, the ways
to guarantee the efficient operation of the program
including the Federal-State relationship.
The Commission will be composed of 13 members: 7 appointed
by the President and 3 each by the Speaker of the House and
the President Pro Tem of the Senate. Broad based interests
must be represented by the appointments. The President
appoints the Chairman, and consultation is required between
the President and the Congress.
III. Status of Work on the Issue
No action to date on appointments. No staff hired. A
preliminary listing of possible Commission members and
executive directors has been prepared and conveyed to the
Assistant Secretary for Employment and Training. Similarly,
a program memorandum and possible Study Commission budget
($8 million) was prepared and recently forwarded to OMB.
IV. Critical Dates
Action should be taken in December 1976 to determine
executive branch recommendations on Study Commission members
and the Commission's staff director so that appointments
can be made in early January. A report to the President
and Congress is required by January 1979 with an iterim
report by March 31, 1978.
Policy Issues
Policy Issue
I.
Statement of Issue
Recent increases in the unemployment rate and lack of
employment growth in the past 6 months indicate that further
counter-recessionary measures, including appropriate manpower
policy initiatives, may be required to regain economic
momentum.
II.
Background
The economic sluggishness has been evident in a number
of signals, the more critical of which are: 1) An increase
in real GNP of only 4 percent (annual rate) in the third
quarter; 2) a shortfall in federal spending below the level
estimated early in the year; and 3) a decline in the comp-
posite index of leading business indicators for two consecu-
tive months. On the manpower side, these developments have
been reflected in a virtual standstill in employment, with
virtually no new job growth since July and a rise in the
unemployment rate from 7.3 percent in May to 7.9 percent in
October. Jobless rates for virtually all worker groups have
risen significantly since this period. The outlook for
fourth quarter 1976 indicates that the economy will continue
to perform in a lackluster manner with the possibility of
further increases in unemployment.
III. Status of Work
In the event economic growth fails to resume sufficiently
in the next 3-4 months, ETA is considering the development of
additional manpower measures to help stimulate job creating by
1) requesting an expansion of the Public Service Employment
(PSE) programs under CETA Titles II and VI to the maximum
allowed under the 1977 Congressional Budget Resolution--from
the 310,000 current level to 500,000 jobs; and 2) seeking
legislative authority for a temporary employment subsidy
program in the private sector to accelerate the hiring of
youth and family breadwinners. No public hearings have been
held or scheduled at this date. Legislative enactment would
be required for an employment subsidy program.
IV. Critical Dates
Development of implementing strategy and level of resources
will depend on the course of the economy over the next several
months. If the economic situation fails to improve, ETA
should be prepared to seek PSE maximum funding authority and
to have proposed legislation in hand early in 1977.
Policy Issue
I.
Statement of Issue
ETA has the responsibility for providing effective
employment and/or training alternatives to income
maintenance recipients.
II.
Background
The ETA presently administers work registration require-
ments for three groups of income maintenance recipients:
AFDC recipients; UI claimants and Food Stamp applicants
through the public employment service system. Each of these
groups has been defined as employable by legislation or
administrative definition and each set of definitions varies.
Substantial resources are being expended on this activity
with questionable results. A determination needs to be made
as to whether these resources are being used to best advan-
tages, whether uniformity in work test definitions should be
sought and where the administrative responsibility for the
work requirement should be lodged.
III. Status of Work
Policy papers have been prepared outlining the problem
and proposing variations in the approach to applying work
requirements. A demonstration of the concept of "work
equity", i.e., labor market exposure coupled with access to
public service jobs is being developed for testing in the
State of Minnesota. Other States have indicated an interest
in similar demonstrations. A proposal was introduced in
Congress last session to revise the definition of Food Stamp
applicants to bring it into conformity with the WIN defini-
tion.
IV. Critical Dates
Decisions related to changes in the basic role and
definition of the Employment Service are contingent on the
decision of the appropriate administrative home for work
registration activities.
The new Administration's call for welfare reform carries
with it implications for administering work requirements in
an equitable and efficient way.
There is a strong possibility that legislation (on Food
Stamp definitions) will be reintroduced in the next session
of Congress.
Policy Issue
I.
Statement of Issue
After two years of experience under the Comprehensive
Employment and Training Act (CETA) a number of problems and
issues involving changes in the system have arisen and will
require attention and decisions over the next six months.
II. Background
CETA is a relatively new piece of legislation which
established a decentralized and decategorized manpower
system to replace a variety of categorical programs under
Federal direction. The major change was to shift decision
making to some 440 State and local units of government under
a system of grants with funds allocated on a formula basis.
Although the system is still in its formative stage, experience
to date indicates several changes and modifications are
necessary to: (a) assure that local programs are addressed
to priority needs; (b) clarify and delineate the roles of the
three levels of government, Federal, State and local within
the system; (c) eliminate potential areas of overlap and
duplication with closely related programs; (d) provide a more
effective system for joint sponsor planning on a labor market
basis.
III. Status of Work
To refine and further develop the decentralized system
under CETA, the ETA is considering a number of changes and
modifications to the administration of the system. These
involve: (1) identifying specific target groups or problems
of national concern to which local attention would be directed;
(2) involving State governments more extensively in adminis-
tration of the system and in providing support to local sponsors;
(3) closer integration of Federal programs such as Job Corps,
WIN, and the Employment Service with local manpower programs;
(4) providing a system of joint planning between sponsors in
the same labor market area. All of these issues can be addressed
to some extent through administrative action under existing
legislation. Over the long term, several of the changes
should be extended and reinforced by incorporation in the
statute.
IV. Critical Dates
Strategies for improving CETA and the necessary implementing
steps are now in development. Decisions will most likely be
required in early 1977.
ISSUE --OMB Circular A-46-J and CETA Allocations
I.
Statement of Issue
The process of generating sub-national force/unemploy-
ment (LFI) data under A-46-J inhibits timely allocation of
funds to prime sponsors and program agents under Titles I,
II and VI.
II.
Background
ETA must distribute Title VI funds to CETA program
operators prior March 1, 1977 to assure continuance of
Public Service Employment (PSE) programs. This dis-
tribution must be a formula allocation using the latest
and the best monthly LFI data available; and it must,
under A-46, use the BLS-published statistics. For Title
I, ETA must early in the calendar year, advise prime
sponsors of their fundings based on annual average LFI.
With respect to PSE funding, it is not likely that
the BLS and the State Employment Security Agencies (SESAs),
who originate the data, will have completed the benchmark
adjustments for 1976 by late December 1976 or early January
1977, when the allocation computations must be made for
the March 1 funding. Accordingly, allocations will have
to be made on the basis of adjusted 1975 data and unadjusted
1976 data, with resulting great confusion over the levels
and the rates of unemployment when the 1976 adjusted data
are disseminated.
The Title I allocation data, while required in the
Spring of 1977, is likely also to create problems in those
States which have Current Population Survey not only
Statewide benchmarks but also a benchmark for a major
metropolitan area (e.g., Wisconsin and Milwaukee). In such
instances the metropolitan area has constituted an unusually
large proportion of the State's unemployment, leaving an
unreasonably small pool of unemployed out-State. The
consequent effect on funding individual out-State jurisdictions
is apparent--sharp criticism from affecting interests.
III.
Status of Work on Issue
ETA has made funds available to BLS/Census to increase
the CPS household survey so that control totals are available
for each State, thereby eliminating past questions of equity.
But the "turn around" time which involved Census, BLS and
SESAs benchmark revisions is so protracted as to prevent
meeting the January 1977 need for data. BLS and Census should
be working toward improvement of timeliness and elimination
of anomalous Statewide/metropolitan area situations.
- 2 -
IV. Critical Dates
This issue requires resolution as soon as possible in
order that CETA allocations can be made in March 1977, as
required for adequate planning purposes.
I.
Statement of Issue: Financing State Employment Security
Agencies (SESA's).
II.
Background: At the present time (FY '77), $1.5 billion
provides financing for Employment Service and Unemployment
Insurance Service functions in SESA's. ES receives $.6
billion and UI $.9 billion. At issue, particularly with
respect to the Employment Service is both the manner in which
the ES budget is justified to Congress and the techniques
used to distribute appropriated amounts to the States.
A State staffing level of 30,000 positions for ES will have
been in effect for two years at the end of the current year.
The administration's position has actually been 27,300 positions
for both years, while Congressional actions have raised the
level to 30,000. There is no compelling rationale for either
27,300 or 30,000. What is required is the development of a
budgeting process that includes reference to both a desirable
level of output services to be provided to the country and
suitable techniques for estimating the cost.
With regard to the manner in which resources are distributed
to State agencies, a question has arisen as to whether or not
it is appropriate to provide resources based solely on a State's
past performance or whether it might not be better if States
were financed on the basis of need where they would be free to
implement programs that may not be directly supportive of the
placement effort. The right of States to employ ES funds as
they see fit versus the Federal perspective of emphasis on
placements is the essence of the issue. A strong relationship
to the question of budget justification is evident, for if there
are to be budgets justified to Congress on the basis of a
national ability to produce a certain ES product, then the
direction of the creation of that product must come from
Washington.
The UI service has an excellent budgeting tool in its Cost
Model. The issue is in the establishment of a firm committment
to use it as constructed and to refrain from the making of
arbitrary productivity assessments against staff requirements
computed through it.
-2-
III. Status of Work on the Issue: Formal work directed specifically
at this issue is not presently underway. ES efforts to develop
a model which will assist in predicting the ease or difficulty
of operating in each State will be of particular importance in
any effort to improve ES budget justification.
IV.
Critical Dates: Short term decisions will have to be made on
the FY 1978 funding levels for ES and UI. Longer range
examination of the methods employed by the Department to justify
its Grants-to-States budget requests should also be initiated
as soon as possible.
I.
Statement of Issue: Continuation of the Employment
Security Automation Plan (ESAP).
II. Background: The Employment and Training Administration has
been developing a Job Service Matching System (JSMS) for
several years. The system, along with a controlled vocabulary
for describing jobs and job applicants, has been developed and
implemented in selected sites. The plan calls for implementing
real time job service matching systems in the largest SMSAs,
with Batch Systems or job banks implemented in the remaining
SMSAs or Statewide. Unemployment Insurance benefit systems
have been tested in four States and it has been projected that
UI systems can be installed Statewide in most States on a cost
effective basis. The project has been approved for implement-
ation by the Secretary and is one of DOL's high priority
management objectives for FY 1977. The project is a major
revision in Employment Security operations and a major cost
item.
Each SESA's plan must include a provision for the recovery
of all UI one-time costs within three years of an agreed-upon
system start date. Although initial evaluations of experi-
mental and pilot project data have indicated favorable results,
many States have expressed concern that the assumptions on
which cost recovery is based are only weakly supported by the
tests.
Additional study on cost recovery should be initiated in order
to produce a definitive statement to both insure that State's
will not be harmed and to support final justification for the
Fiscal Year 1978 budget.
III. Status of Work on the Issue: Sixteen State proposals for imple-
menting JSMS or UI systems were approved and funded in FY 1976.
Additional funds have been appropriated in FY 1977. Plans call
for funding 20 additional States in FY 1977.
IV. Critical Dates: FY 1978 budget.
I.
Statement of Issue
The implications of the Brock Bill (annual reporting
of wage data to SSA and IRS) on unemployment insurance
program operations.
II.
Background
The passage of Public Law 94-202 requires employers to
report workers wages on an annual basis instead of
quarterly to the IRS and SSA. Although this does not
have a direct impact on the quarterly reporting of wage
data to the State employment security agencies for UI
purposes it will most likely result in State legislatures
being pressured to change their laws covering reporting
of wage data from quarterly to annually.
The enactment of such State legislation would:
a. require a change in the base period from which
earnings are used to determine claimant monetary
eligibility. Many individuals who are eligible
under the present base period requirements would
become ineligible.
b. require a change in the reporting of wage data to
a request reporting basis. This would increase
agency administrative costs as well as many large
employers. In addition, the present benefit payment
control cross-match system which is one of the most
effective and efficient in all income maintenance
programs would be eliminated.
III. Status of Work on the Issue
The Department of Labor, prior to the passage of P.L. 94-202,
had discussed with OMB and Congressional representatives
the need to specifically address the potential UI
problems anticipated with the enactment of the proposed
legislation.
Since the Department was unable to get these issues
addressed before the law was passed, it is now necessary
that the Department of Labor take a firm position on this
issue.
State agencies will be looking to their Federal partner
for direction and support with respect to either
continuing with detailed quarterly reporting of wages
-2-
to assure proper and efficient administration of the
program at the least cost or conversely changing
from request reporting to detailed quarterly reporting.
IV.
Critical Dates
This administration position must be developed and
published early during Calendar Year 1977 due to the
expected pressures on State legislatures during the
Calendar Year 1977 sessions.
I.
Statement of Issue
Pressure for deferral or forgiveness of State loans from
the Federal Unemployment Account (Loan Fund).
II.
Background
Fund solvency is a critical ingredient for maintaining
the Federal/ State unemployment insurance program in its
present form. To date, 21 States which have depleted these
funds have borrowed more than $3.2 billion from the Federal
Unemployment Account (Loan Fund) in order to continue to
pay unemployment insurance benefits. By the end of April
1977, additional States will seek advances. Federal law
requires the borrowing States to repay their loans by
increasing their FUTA taxes. Recognition has been given
to the severity of the current situation and temporary
legislation now provides for the deferment of the require-
ment to pay back the loans for 3 years (until 1979).
However, there is persistent pressure by ICESA and some
States for further deferment or to forgive the loans.
III.
Status of Work on the Issue
Some States have taken necessary action to repay their
loans as the law currently requires. The Administration's
position is that no further deferments should be allowed:
and current law requirements for repayment must be followed.
DOL has made this position clear to the States and is
encouraging them to take appropriate action to increase
their tax receipts by revising their tax structure.
IV.
Critical Dates
Early in 1977, the Department of Labor and the Congress will be
under increased pressure from some States to grant further
deferments or forgiveness of the loans. Early in 1977, State
legislatures will meet and increase the taxable wage base
to $6,000.00 to comply with the Federal law. At that time,
DOL should encourage States with outstanding loans to provide
additional measures at the State level to pay off their
debts without seeking further deferments.
Legislative Issues
I. Statement of Purpose
The Comprehensive Employment and Training Act (CETA)
expires at the end of FY 1977 and accordingly must be
reauthorized and perhaps amended.
II. Background
CETA was enacted in December 1973. Since enactment there
have been two pieces of legislation amending CETA (the
Emergency Jobs and Unemployment Assistance Act of 1974
and the Emergency Jobs Programs Extension Act of 1976),
but there has been no basic revision in the core CETA
titles. ETA recommends a number of major revisions to be
presented to Congress early in the first session of the
95th Congress. Enactment of CETA depended upon acceptance
of its concepts and major provisions by the elected
executives of State and local government and organized
labor, as will its extension and any amendments.
III. Status of Work on the Issue
The House Subcommittee on Manpower, et. al. began oversight
hearings on CETA on August 26, 1976, with hearings to
continue through December 4. Departmental spokesmen have
testified. While agreeing that CETA should be extended,
witnesses have not reached consensus on substantive
amendments.
ETA recommended changes include, but are not limited to:
(1) clarification of the respective roles of the Employ-
ment Service and CETA prime sponsors to improve management
efficiency and reduce the potential overlap in intergovern-
mental delivery systems of employment and training services;
(2) sharply identify the target groups that Titles I and
II of CETA are designed to serve as being the hard-core
unemployed (with a provision allowing the Secretary to
waive eligibility requirements) ; (3) a clear legislative
statement of the objectives of CETA as being to enhance
post enrollment earnings capacity of participants; (4) an
overhaul of Job Corps (Title IV) to revise out of date
restrictions and cost limitations and to link Job Corps
with a new Comprehensive Services to Youth title with
local/State participation in the Job Corps program; (5) a
new comprehensive title to provide to economically disadvan-
taged unemployed youth services clearly of a developmental
nature enhancing post-enrollment earnings capacity; (6) a
strengthened role for States including coordination,
planning, evaluation and review of local CETA sponsor's
program plans; (7) a restructuring of the Title VI
program as a standby countercyclical p.s.e. program, with
2.
national and area on and off triggers; and (7) ultimate
subsuming of the Work Incentive Program (WIN) - -Title IV C
of the Social Security Act--under the CETA umbrella with
adequately increased resources to serve the WIN clientele.
IV Critical Dates
Under the provisions of the Congressional Budget Act,
legislation authorizing new funds for FY 1978 must be
reported by committee by not later than May 15, 1977.
I.
Statement of Issue
Future funding levels of title VI PSE programs under CETA.
II. Background
Title VI of CETA, passed in December 1974, has been funded as
follows: $2.5 billion - January 1975 to June 1976, $1.2 billión -
June 1976 to January 1977, and $300 million - November 1976 to
March 1977.
By and large, the program has continued approximately 260,000
jobs throughout this period. Participants have been employed in
regular public service jobs and prior to entering the program
were unemployed for 30 days (in special cases, 15 days). The
original authorization for title VI expired in June 1976.
Recently the Congress extended title VI through FY 1977 and
provided for a new targeted emphasis to be placed on long term
unemployed persons and on special projects outside normal public
service areas. However, the supplemental appropriation which
provided funds for the continuation of title VI did not address
the full funding issue. It merely provided funds to extend the
current 260,000 jobs through March 30, 1977. ETA requested
authority to utilize the formula provided in the law and con-
tinue the general 260,000 jobs funding level through September 30
of FY 1977. However, the decision was made to not use the
formula but fund the sponsors on an as needed basis only
through March 30.
As a result, the following decisions must be made: First, we
must determine what level of funds to request for the period
March through September 30, 1977: either funding which would
have the effect of continuing 260,000 jobs through FY 1977 or
funding which would in fact increase jobs above the 260,000 level
for the balance of the fiscal year, and thus increase the number
of longer term unemployed in the program as well as increase the
number of participants in projects. Second, since the current
extension of title VI goes through September 30, 1977, the
Administration must prepare a position within the next 6 months
on what type of PSE program to propose for FY 1978 and what levels
of appropriations will be requested.
III. Status of Work on the Issue
No hearings are currently scheduled but undoubtedly will be in
late January or early February. It should be noted that both
the House and Senate Budget Committees have provided additional
budget authority for approximately 190,000 additional jobs.
IV. Critical Dates
An Administration position would have to be provided in early
February on funding from March 30 through FY 1977, with final
decisions on such funding to be made no later than March 30 and
with pressure on the Administration and Congress to act sooner.
Legislative positions on the extension for title VI in FY 1978
should be made by May 15 at the latest.
Legislative Issue
I.
Statement of Issue
High unemployment persists among youth, particularly
minority groups and high school dropouts.
II.
Background
Much concern has been focused recently on the extremely
high youth unemployment rates; teenage rates in general have
been about twice total unemployment rates; rates for black
teenagers, particularly in the central cities, have been at
least twice again as high. This problem has worsened over
the past twenty years for most subgroups. Although high
unemployment rates for most youths are a transitory phenomenon,
for some out-of school youths, particularly nonwhite high
school dropouts, they indicate persistent labor market
difficulties.
While dropouts are estimated to comprise about one-third
of all youths with structural employment problems, and have
the highest incidence of such problems, they are relatively
underrepresented in DOL programs other than Job Corps, partic-
ularly CETA Titles I and II. In these programs, heavy emphasis
is put on programs directed at in-school youths. In addition,
the favored strategy has been work experience which, according
to previous evaluation studies, has produced little if any
long-term improvement in employability.
III. Status of Work
The needs of youth are being assessed in some depth in
policy papers currently in preparation. The appropriate
programmatic responses are also being evaluated for possible
new legislative proposals and/or programmatic redirection. In
the near term, special program initiatives have been developed
to mount a youth hiring program with the National Alliance of
Businessmen (NAB) and to reorganize ETA's youth activity.
IV. Critical Dates
New legislation is proposed to take the form of a new
CETA title to be forwarded early in calendar 1977.
I. Statement of Issue
Several key experimental, pilot, and demonstration projects
related to basic employment and training strategies (e.g.;
work equity, value of services rendered by the
Employment Service, etc.) are currently held in abeyance
due to a lack of authority for the Secretary to waive
compliance with certain perscriptive legislative mandates.
II. Background
A number of key demonstration and experimental projects
which ETA wishes to implement require permissive legislative
action to provide discretionary authority to the Secretary
to waive existing legislative provisions. For example,
an experimental program to test the efficiacy of services
rendered by the Employment Service would require establish-
ing a control group of applicants which, in accordance
with the experimental design, would by intent receive no
"services" from the ES. Sections 3 and 8 of the Wagner-
Peyser Act (and recent Court decisions) mandate equal
access to services for all applicants, effectively
precluding the control group experimental design.
Similarly, provisions of the Federal Unemployment Tax Act
(Chapter 23 of the Internal Revenue Code) and of titles III
and IX of the Social Security Act limit the use of funds
collected under the FUTA to the payment of benefits to
claimants. These provisions preclude the use of FUTA for
support payments to individuals in training programs,
special supported work activities, and similar substitutes
for unemployment compensation payments (simple income support)
which have been proposed for experimental or pilot projects.
III. Status of Work on the Issues
The Interim Strategic Plan of ETA will include recommenda-
tions for experimental, pilot, and demonstration efforts of
this nature. Project proposals for the evaluation of the
effectiveness of services rendered by the Employment Service
are under review and research designs for a number of efforts
keyed to the use of FUTA funds are being developed.
No specific congressional hearings on this subject have
been undertaken.
Legislative proposals are being developed to (1) amend the
Wagner-Peyser Act to give the Secretary authority to waive
compliance with sections 3 and 8 of the Act to allow experi-
mental, pilot, and demonstration projects which would assist
in promoting the objectives of the Act, and (2) to amend
the Social Security Act to give waiver of compliance
authority for sections 303 (a) (5), 903 (c) (1), and 1201 of the
Social Security Act and section 3304 (a) (4) of The Internal
Revenue Code (Federal Unemployment Tax Act) to allow similar
2.
projects that would further the purposes of titles III,
IX, and XII of the Social Security Act. These provisions
would be structured along the design of section 1115 of
the Social Security Act (attached).
IV. Critical Dates
Because of the urgent need to implement specific experi-
mental projects, in a timely manner, action on this
issue should be sought within the first 6 months of
CY 1977.
Demonstration Projects
Sec. 1115. In the case of any experimental, pilot, or demonstration
project which, in the judgment of the Secretary, is likely to assist in
promoting the objectives of title I, VI, X, XIV, XVI, XIX, or XX,
or part A of title IV, in a State or States—
(a) the Secretary may waive compliance with any of the re-
quirements of section 2, 402, 602, 1002, 1402, 1602, 1902, 2002, 2003,
or 2004, as the case may be, to the extent and for the period he
finds necessary to enable such State or States to carry out such
project, and
(b) costs of such project which would not otherwise be in-
cluded as expenditures under section 3, 103, 603, 1003, 1403, 1603,
1903, or 2002, as the case may be, and which are not included as
part of the costs of projects under section 1110, shall, to the extent
and for the period prescribed by the Secretary, be regarded as
expenditures under the State plan or plans approved under such
title, or for administration of such State plan or plans, or expendi-
tures with respect to which payment shall be made under section
2002, as may be appropriate.
In addition, not to exceed $4,000,000 of the aggregate amount appro-
priated for payments to States under such titles for any fiscal year
beginning after June 30, 1967, shall be available, under such terms
and conditions as the Secretary may establish, for payments to States
to cover so much of the cost of such project as is not covered by pay-
ments under such titles and is not included as part of the cost of
projects for purposes of section 1110.
Proposed WIN Legislation
I. Issue
The request for legislative authority to require WIN
registrants to seek employment as a condition of continuing
eligibility for AFDC was submitted to Congress in March 1976
but did not pass and should be resubmitted jointly by DOL and
HEW.
II.
Background
The Department of Labor and Health, Education and Welfare,
which jointly administer the WIN program, have developed a
number of proposed changes to the WIN legislation in the Social
Security Act. The most significant change is a provision that
mandatory WIN registrants may be required to actively seek
work as well as accept employment offered to them. Other
changes are intended to improve program operations and clarify
the two Department's legal authority. They include identical
work registration requirements for all mandatory AFDC recipients;
elimination of the 60 day counseling provision for persons de-
termined to have refused to participate in the program; elimina-
tion of the certification procedure, legislative priorities for
participation and Labor Market Advisory Councils; and the ex-
empting AFDC recipients working full-time from work registration
requirements.
A WIN legislative package which included elimination of WIN
work and training components as well as the job search provision,
was submitted to Congress in March, 1976 but never introduced.
This proposal, which has been generally approved by HEW should
stand a better chance of passage, since training would continue
to be provided through WIN where appropriate.
III. Status of Work
Proposed legislative amendments have been submitted for
approval to the Secretary of HEW by the Administrator of Social
and Rehabilitation Services. If agreed to by both Departments,
they would be sent to OMB for approval before submission to the
upcoming Congress.
IV. Critical Dates
A decision on this issue must be made within the next 6
months to determine whether it will be included in the
Department's 1977 legislative program.
THE STATUS OF WORK REQUIREMENT REFORM IN FOOD STAMP LEGISLATION
I. Issue
In view of the fact that Food Stamp Program legislation
failed to pass during Fiscal Year 1976, we anticipate a renewed
effort towards such legislation during the next session of
Congress.
II. Background
On April 8, 1976 the Senate passed Food Stamp Reform Bill
(S.3136). It provided that the Secretary of Labor would be
responsible for the overall implementation of the work test and
job search requirement and would be authorized to present and
defend the jointly developed USDA/DOL food stamp budget before
OMB and the Congress. The overall thrust of the bill was to
bring the food stamp work requirement into closer conformance
with that of the AFDC program.
The House Agriculture Committee voted on August 10, 1976 to
report out the Food Stamp Reform Bill which included the work
requirement language of the present Food Stamp Act. Unlike the
Senate version, the bill did not contain the job search require-
ment or the provision for making the work requirement more
analogous with that of the AFDC program. The Committee also
voted to include an amendment which would make strikers and some
students ineligible for food stamps. The bill was referred to
the House Rules Committee on September 10, 1976 but was never
brought to the floor of the House. Both the House and Senate
Agriculture Committees have indicated, however, that they will
re-introduce legislation after Congress re-convenes.
III. Status of Work
As lengthy and exhaustive hearings were held by the Agricul-
ture Committees of both Houses during the previous session, it
is anticipated that only perfunctory hearings, if at all, will
be scheduled for the next Congressional session.
IV. Critical Dates
As the Food Stamp Program is included under Farm Program
appropriations, May 15 is the deadline for food stamp legislation
to be reported out of committee for inclusion in appropriations
for the upcoming fiscal year.
I. Statement of Issue
Should the Department again sponsor legislation to modify
the responsibilities of the DOL with respect to immigration?
II.
Background
Under the Immigration and Nationality Act, the DOL has a
limited responsibility for protecting the American work
force against certain adverse effects of immigrants entering
this country for employment. However, the law and imple-
menting labor certification procedures require DOL
certifications for only a very small percentage of all
immigrants admitted each year. Most such immigrants are
admitted on the basis of family relationships.
During FY 1975, there were 386,194 immigrant aliens legally
admitted into the United States. In that year, DOL issued
22,157 labor certifications approving immigrants for
permanent jobs. Normally, about 10 percent of all the
immigrants who enter are subject to labor certification.
The other 90 percent are relatives of U.S. citizens or
residents, and refugees, all of whom are free to work.
It is estimated that most immigrants enter the labor market
shortly after arrival.
DOL submitted legislative recommendations in 1975 to revise
Section 212 (a) (14) of the immigration law. These recommenda-
tions would in effect permit workers to enter the U.S. for
permanent jobs essentially on a first-come, first-served
basis, without a labor certification, unless the Secretary
of Labor acted to stop such immigration on the basis of a
probable adverse effect. This provision would be applicable
only to that part of the total immigration quota (about 10
percent of the 380,000 total) authorized to enter the U.S.
for employment. This bill was never reported out for action
by the appropriate House or Senate committees. (Currently,
workers must be individually certified, at heavy workload).
III. Status of Work on Issue
At present, the 1977 DOL legislative program includes
similar legislative recommendations. This proposed
legislation reflects over 10 years of experience in
implementing the present law and various research studies
on the effects of immigrants on the U.S. labor force. An
option paper, prior to a secretarial decision to proceed
with this legislation, was prepared in 1975. House and
Senate testimony on the legislation was also prepared.
- 2 -
IV. Critical Dates
A decision on this issue must be made within the next
6 months to determine whether it will be included in
the Department's 1977 legislative program.
I.
Statement of Issue
Termination of Federal Supplemental Benefit Payments
during high levels of unemployment.
II.
Background
Public Law 93-572 (The Emergency Unemployment Compensation
Act of 1974) created a program to extend unemployment compensation
from 39 to either 52 or 65 weeks during periods of high unemployment.
At the present time the program is scheduled to end March 31, 1977.
The triggering mechanism provided for in the present law
is a two-tiered trigger which determines whether a State may pay an
additional 13 or 26 weeks. Twenty-four States are currently paying
some type of FSB benefits (i.e., 13 or 26 additional weeks) Normal
seasonal patterns could cause this number to significantly increase
during the next 6 months. In addition, any increase in the level
of unemployment through cyclical factors would cause a further increase
in the number of States and the number of claimants in each State.
Termination of the program on the designated date (March 31,
1977) may be an increasingly important issue if the current trend
in unemployment continues. Congress did address itself to the problem
while considering P.L. 94-566 (H.R. 10210) but any further extension
of FSB was voted down.
III.
Status of Work on the Issue
Not applicable.
IV.
Critical Dates
Any action to avoid a break in supplemental benefits would
have to take place prior to March 31, 1977 for all claimants.
TRIGGER
NOTICE
no.
NATIONAL AND STATE EXTENDED BENEFIT INDICATORS UNDER P.L. 91-373
AMENDED BY P.L. 93-363 AND 93-572
as of October 30, 1976
National Indicator Insured Unemployment Rate for Most Recent Available 3 Months:
(Seasonally Adjusted)
August 5.60%
September 5.90%
October 5.678
P.L. 91-373 Extended Benefit Indicators b/
13-Week IUR
Percent of Prior 2 Years
Alabama
4.76
108
Alaska
6.59
127
Arizona
4.57
89
Arkansas
4.67
102
California
(5.80)
(105)
Colorado
2.61
114
Connecticut
6.65
112
Delaware
4.76
132
Dist. of Columbia
3.40
101
Florida
4.57
102
Georgia
3.75
96
Hawaii
5.91
127
Idaho
3.71
109
Illinois
(5.96)
(143)
Indiana
2.28
76
Iowa
2.56
115
Kansas
2.78
118
Kentucky
4.08
97
Louisiana
(3.26)
(100)
Maine
5.77
107
Maryland
3.78
95
Massachusetts
5.39
77
Michigan d/
(6.22)
(83)
Minnesota
3.10
107
Mississippi
3.35
103
Missouri
4.06
99
Montana
4.19
109
Nebraska
2.00
77
Nevada
5.67
102
New Hampshire
2.72
70
New Jersey
7.18
98
New Mexico
4.35
97
New York
6.24
104
North Carolina
3.81
112
North Dakota
1.75
127
Ohio
2.87
90
Oklahoma
3.53
106
Oregon
5.00
93
Pennsylvania
6.00
113
Puerto Rico
19.97
116
Rhode Island
6.68
89
South Carolina
3.99
91
South Dakota
1.79
131
Tennessee
4.26
102
Texas
1.84
103
Utah
3.19
100
Vermont
5.36
90
Virginia
2.04
103
Washington
7.32
98
West Virginia
3.91
103
Wisconsin
2.94
93
Wyoming
1.34
130
a/ Refer to UIPL Nos. 1103 and 1156.
Б/
All States currently paying extended benefits under P.L. 91-373. National 4.58
trigger began for unemployment for week beginning February 23, 1975.
Trigger indicator as of October 23, 1976.
d/ Trigger indicator as of October 16, 1976.
U.S. DEPARTMENT OF LABOR, ETA, UIS
legislation and
STATES BY EB-FSB TRIGGER RATES AND FSB STATUS--WEEK ENDING OCTOBER 30, 1976
Below 5.0%
5.0% to 5.99%
6.0% and Over
No FSB Being Paid
Colorado
2.61
California 1/
5.80
Alaska
6.59
District of Columbia
3.40
Hawaii
5.91
Connecticut
6.65
Florida
4.57
Illinois 1/
5.96
Michigan 3/
6.22
Georgia
3.75
Maine
5.77
New Jersey
7.18
I-daho
3.71
Massachusetts
5.39
New York
6.24
Indiana
2.28
Nevada
5.67
Pennsylvania
6.00
Kansas
2.78
Oregon
5.00
Puerto Rico
19.97
Kentucky
4.08
Vermont
5.36
Rhode Island
6.68
Louisiana
3.26
Washington
7.32
Maryland
3.78
Minnesota
3.10
Mississippi
3.35
Missouri
4.06
Nebraska
2.00
1/ Trigger indicator as of October 23, 1976.
New Hampshire
2.72
Illinois Rate Changed From 6.01% Ocotber 16, 1976 to 5.96%
New Mexico
4.35
October 23, 1976.
North Carolina
3.81
3/
Trigger Indicator as of October 16, 1976.
Ohio
2.87
Oklahoma
3.53
South Carolina
3.99
South Dakota
1.79
Tennessee
4.26
Texas
1.84
Utah
3.19
Virginia
2.04
West Virginia
3.91
Wisconsin
2.94
Wyoming
1.34
U.S. DEPARTMENT OF LABOR, ETA, UIS
In Additional Eligibility
Office of Research, Legislation and
Period Starting:
Program Policies
Alabama (10/31/76)
4.76
November 15, 1976
Arizona (10/17/76)
4.57
Arkansas (10/10/76)
4.67
Delaware (8/22/76)
4.76
Iowa (9/5/76)
2.56
North Dakota (10/3/76)
1.76
In 5.0% Period Until:
Regulatory Issues
REGULATORY ISSUES
I.
Statement of Issue
Title 29 CFR 28 and Title 29 CFR 29 require final
publication.
II.
Background
Title 29 CFR 28 is a proposed regulation that
establishes labor standards for trainee programs
on Federal and federally assisted construction.
The use of these trainees is permitted on
construction work under Davis-Bacon regulations
if trainee programs are approved by the
Department's Bureau of Apprenticeship and Training.
The Federal Committee on Apprenticeship has en-
dorsed the regulation with some amendments.
Title 29 CFR 29 is a proposed regulation that
establishes procedures and criteria for the
registration of apprenticeship programs Appren-
ticeship, as defined in the National Apprenticeship
Act, has been in existence for forty (40) years,
but there have been no published regulations with
the exception of Title 29 CFR Part 30 which relates
to equal opportunity in apprenticeship. The pro-
posed regulation is a codification of procedures
and criteria which have been practiced over the
past 40 years. It has been published twice in the
Federal Register, and there have been no significant
comments or objections to the proposed regulation
since the last publication.
III.
Status of Work on the Issue
All work performed and decision on final publication
rests with the Secretary and the Solicitor.
IV.
Critical Dates.
Title 29 CFR 29 should be published prior to
December 1976.
Title 29 CFR 28 is somewhat controversial and may
require further consideration before action is
taken.
Legal Issues
LEGAL ISSUE
I.
Statement of Issue
The legality of establishing unilateral programs
in the same area where jointly sponsored programs
exist.
II.
Background
Some states do not permit unilateral programs where
joint programs in the same trade and area exist.
This is being challenged by unilateral programs in
the courts.
A unilateral program is one established by an
employer or group of employers where there is no
collective bargaining agreement. Jointly sponsored
programs are established under a collective
bargaining agreement and both the employer, or
employers, and the employees have an equal voice in
the operation of the program.
BAT has approved unilateral programs, and they
are being challenged by jointly sponsored programs
and are facing an injunction which would prevent
the establishment of unilateral programs.
III.
Status of Work on the Issue
Discussions have been held with both types of sponsors,
but no real resolution of the problem has been forth-
coming.
IV.
Critical Dates
This issue should be resolved early in 1977.
INTERNATIONAL
INTERNATIONAL ISSUES
FIRST SIX MONTHS
International Labour Organisation*
Program Issue
Trade Adjustment Assistance
Program Issue
East-West Trade
Policy Issue
Trade Negotiations and Organized Labor
Policy Issue
*Submitted by the Special Assistant to the Secretary
for ILO Affairs
(Issues are listed in approximate order of importance and
urgency.)
ILO ISSUE
I.
Statement of the Issue:
What must the Secretary do in connection with the U.S. declaration
of intent to withdraw from the International Labor Organization (ILO)?
II.
Background:
On November 5, 1975 the United States sent the ILO a letter of intent
to withdraw after the constitutionally required two-year waiting
period. The letter said that the ILO was being misused for irrelevant
political purposes that interfere with its real purpose of promoting
the welfare of the world's workers. It cited the following specific
longstanding adverse trends: (1) the erosion of tripartite, autono-
mous, representation of workers, employers and governments, (2) a
concern for human rights in some countries but not in others,
(3) disregard of established ILO machinery for due process, and (4)
increasing politicization. The United States promised to work with
the Secretariat and like-minded member states to try to correct
these trends but that, failing this, it would be forced to withdraw.
The letter promised the closest consultation with the Congress.
This action had the full concurrence of the AFL-CIO and the Chamber
of Commerce, which represent workers and employers in the ILO.
This would be the first time the United States has withdrawn from an
agency of the United Nations: the United States has somewhat similar
troubles with UNESCO. The United States has been a member of the ILO
since 1934.
III.
Status of Work on the Issue:
Concurrently with the letter, the President established a Cabinet-
Level Committee to consider whether conditions could be corrected so
that we can remain in the organization. The Committee is chaired by
the Secretary of Labor with members from the Departments of State and
Commerce, and the National Security Council. Collaborating at each
meeting are George Meany and Lane Kirkland of the AFL-CIO and Charles
Smith, the U.S. Employer representative. The Committee has met four
times.
The Secretary's Special Assistant for ILO Affairs (Daniel Horowitz)
serves as Counselor to the Cabinet-Level Committee and as the U.S.
Representative to the Governing Body of the ILO. The Department has
been consulting closely with the selected members of Congress and
Congressional staff.
-2-
The ILO staff in ILAB has been increased from five to eleven to
provide more effective U.S. participation in the ILO.
In 1976 Ambassador to Yugoslavia Laurence Silberman, former Under
Secretary of Labor, visited selected industrialized countries to
explain the U.S. position and seek support. Horowitz made a similar
swing through Asia in October, 1976, and has regularly consulted
further with European states. Horowitz is scheduled to make a
swing through Africa during January and, subject to reconfirmation
of plans by the new Cabinet-Level Committee, will visit Latin America
in the Spring of 1977.
IV.
Critical Dates:
In the sixty days after January 20, 1977 the Secretary should:
1. Hold initial discussions of the ILO issue with Mr. Meany
and Mr. Kirkland.
2. Decide how he wishes to organize and carry on Congressional
consultations on this matter.
3. Convene his first Cabinet-Level Committee meeting immediately
before or after the February-March meeting of the ILO Governing
Body.
The Cabinet-Level Committee should begin framing its recommendations
to the President after the annual Conference in June, 1977 for the
ultimate decision on whether the United States withdraws, which
must be made no later than November 5, 1977.
Implementation of Trade Adjustment Assistance Program
I. Statement of the Issue:
What should be done to achieve the Congressional intent to provide
speedy and effective benefits to workers adversely affected by
foreign trade?
II.
Background:
The Trade Act of 1974 provides for an expanded and streamlined
program of adjustment assistance in order to provide better benefits
more quickly to workers who lose their jobs because of increased
imports. Presently, the administration of this program is divided
between ILAB, which certified petitions, and ETA, which administers
the benefits delivery system.
There is an increasing number of cases not being certified within
the 60-day statutory time limit because of rising workloads and
inadequate staffing in ILAB. The elapsed time between certifica-
tion and first payment of cash benefits is also increasing and now
approaches 80 days. Not only is the delivery of benefits slow, but
also certain benefits are not generally available to workers. For
example, job relocation allowances have been extended to only 65
persons, and fewer than 1,200 persons have been referred to training.
III. Status of Work on Issue:
An ILAB request for additional staffing is pending before the
Under Secretary.
ASPER is presently conducting an evaluation of the benefits delivery
system.
IV. Critical Dates:
ILAB's staffing problems should be resolved as early as possible
in order to avoid further backlogs in the program.
EAST-WEST TRADE
Issues
What should be the position of the Administration and the DOL
on East-West trade issues and in particular on Title IV of
the Trade Act (Jackson-Vanik Amendment) which links trade to
Soviet emigration.
Background
Historically organized labor has opposed expansion of U.S. trade
with non-market (Soviet bloc) economies. They fear not only
increased imports but also transfer of technology to Communist
countries.
They supported, and to some extent were responsible for passage of
the Jackson-Vanik amendment to the Trade Act of 1974 which makes
extension of both most-favored nation (MFN) tariff treatment and
export credits to Communist countries conditional on changes in
emigration policy. The AFL-CIO has testified against continuing
the waiver extending MFN treatment to Romania.
The Ford Administration has pledged to seek legislation which would
ease restrictions on East-West trade and export credits.
Examination of recent East-West trade issues indicate that there
are significant economic as well as political implications to
expanding East-West trade. DOL has criticized certain proposed
loans to Communist countries by the Export-Import Bank in terms of
the financial risk involved at the rates offered, and on grounds
of possible injury to U.S. firms and workers.
Status of Issues
The Department of Labor continues to analyze specific East-West
trade issues on a case-by-case basis (e.g., an Eximbank loan to
Poland). We have not addressed the overall issue of what should be
our policy regarding trade with Communist countries.
Critical Dates
Congress will hold public hearings on overall East-West relations
in March 1977. East-West trade will undoubtedly also be reviewed
and the issue of revised legislation may surface in the Spring
of 1977.
November 18, 1976
TRADE NEGOTIATIONS AND ORGANIZED LABOR
Issue
How should the DOL participate in the MTN negotiations with
particular reference to the views of organized labor?
Background
The Trade Act of 1974 set the stage for the Multilateral Trade
Negotiations (MTN) now in progress in Geneva with a 1977 target
date for completion. The objective of the MTN is to reduce
tariff and non-tariff barriers to international trade. The Trade
Act provides for advice to the negotiators and reports to Congress
from the private sector, including organized labor, on all aspects
of the negotiations. The DOL and the Special Trade Representative
have established a Labor Policy Advisory Committee and six Labor
Sector Advisory Committees on which some 60 unions are represented.
In addition to similar industry and agriculture committees there
is also a President's Advisory Committee on Trade Negotiations
representing all sectors of the economy and including five senior
union presidents.
The AFL-CIO opposed the Trade Act and generally opposes the thrust
of the negotiations. In the main, they support increased
U.S. import restrictions and restrictions on U.S. foreign invest-
ment. They contend that U.S. trade policies have caused the loss
of jobs, their advice is not supported by top officials of the
Labor Department and is not being considered seriously by the
negotiators. If organized labor's opposition to the negotiations
persists, it may undermine prospects for approval of those aspects
of the results which must be submitted to the Congress.
Status
During 1977 the negotiations will cover issues such as the depth
of tariff cuts, exceptions to tariff cuts, treatment of subsidies,
international fair labor standards, special benefits to developing
countries, international safeguard (escape clause) procedures, etc.
The Advisory Committees will be meeting frequently during the year.
Critical Dates
The next meeting of the Labor Policy Advisory Committee is scheduled
for February 2, 1977. On February 9, the Department will be host
to the President's Advisory Committee for Trade Negotiations.
The Secretary should be present. He may be asked how he proposes
to reconcile the objectives of the MTN with the opposition by
organized labor.
November 18, 1976