Achieving the goals of the Employment act of 1946--thirtieth anniversary review


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Achieving the goals of the Employment act of 1946--thirtieth anniversary review
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Volume 1-Employment

^ *-. 1 I///t / I
PAPER No. 3 PW o^A";7'i




AUGUST 20, 1976

Printed for the use of the Joint Economic Committee

69-735 WASHINGTON : 1976

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(Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.)
HUBERT H. HUMPHREY, Minnesota, Chairman
RICHARD BOLLING, Missouri, Vice Chairman
EDWARD M. KENNEDY, Massachusetts OTIS G. PIKE, New York

JOHN R. STARK, Executive Director
RICHARD F. KAUFMAN, General Counsel



AUGUST 17, 1976.
To the Members of the Joint Economic Committee:
Transmitted herewith is a study entitled "Job Creation: The Proj-
ect Approach in New England" by William Spring, Director, Boston
University Regional Institute on Employment Policy. This study is
the third in a series dealing with economic growth and employment
opportunities. These studies form part of the Joint Economic Com-
mittee's 30th anniversary study series.
Mr. Spring's study describes the problems which can be created
when workers hired with Federal funds made available under the
Comprehensive Employment and Training Act (CETA) are placed
in existing local government job slots at a time when reg rlar city
workers are being laid off due to budget constraints. This dilemma is
illustrated by describing the experience of Bridgeport, Connecticut.
The study then goes on to describe the success which communities in
the Boston area and elsewhere in New England have had with the
"project approach" to public service employment, that is, the placing
of CETA-funded employees on special temporary work projects rather
than in existing State or local job slots. Mr. Spring argues that this
approach can often be a more successful and efficient use of CETA
funds and that this approach is amenable to the major expansion of
a public jobs program which he feel is needed during this period of
continuing high unemployment.
I would like to take this opportunity to thank Mr. Spring for the
work he has done to assist the Committee. I believe this study will
be of great value to Members of Congress and to others who are
interested in designing practical and successful approaches to dealing
with the current problem of high unemployment.
The views expressed in the study are those of the author and do
not necessarily represent the views of the Members of the Joint Eco-
nomic Committee or of the committee staff.
Chairman, Joint Economic Committee.

Digitized by the Internet Archive
in 2013


Letter of transmittal---. ------------------------------------- -in

Introduction -------------------- ----- --------------------- 1
The origins of the project approach: The policy and politics of public job
creation------------------------------------------------ 3
Bridgeport: CETA and payroll cutbacks------------------------------ 8
Boston area CETA housing programs ------------------------------_ 11
Boston housing authority -------------------------------------- 11
Cambridge housing authority -------------------------------- 13
Somerville housing authority----------------------------------- 15
Arlington housing authority----------------------------------- 18
Watertown housing authority ---------------------------------- 19
Community development and employment projects elsewhere in New
England ---------------------------------------------- 21
Vermont housing programs -----------_.-------------------- 21
Transition Employment Enterprises, Inc.: A not-for-profit supported
work demonstration project ---------------------------------- 22
Small scale public works: Title X in New England ---------------- 23
Maine State Legislature jobs committee ------------------------- 24

A. Summary of the Maine Legislative Jobs Committee proposal-------_ 26
B. The Massachusetts Local Initiative Program-------------29

By William Spring*

Project-oriented public job creation increasingly has become a focus
of economic policy. The Comprehensive Employment and Training
Act (CETA) Title II and VI job creation effort-small scale though
it is in the context of current high unemployment-hlas encountered
the kind of difficulties inevitable when a major counter-cyclical effort
is attempted through a legislative, regulatory and administrative
structure designed primarily to help the disadvantaged in times of
general prosperity.
This paper is an attempt to examine the experience in New England
with job creation programs which differ from the usual CETA pattern
of hiring individuals to work at regular tasks in existing line agencies.
This study is based on a conference held in Boston in 1975 at which
discussions of a number of relevant issues took place. First, I will dis-
cuss the legislative background of job creation efforts in recent years,
then survey the experience of a city where curtailed payrolls forced
CETA workers into direct confrontation with regular employees. The
paper will then take a detailed look at housing-oriented projects in
the Boston area, comparing programs by funding, objective, wage
scales and administrative arrangements across the metropolitan area.
Next a program in rural Vermont is considered.
Many believe that private sector organizations not associated with
government bureaucracy can play a vital role in job creation and
ultimately pay for themselves by supplying a product for which the
public, public agencies, or private firms will pay. In thirteen locations
around the nation demonstration programs of this type are in place.
This paper will look at the program in Massachusetts.
Other variants will also be considered. In most parts of the region.
the Title X public jobs project is providing employment resources
through the Economic Development Administration rather than the
Labor Department. The Maine legislature has established a Joint
Committee on Jobs and the recommendations of that committee are
summarized in Appendix A of this paper. Appendix B describes the
recently introduced Massachusetts Local Initiative Program.
High unemployment and falling tax revenues place extraordinary
pressures on State and local governments as well as on their citizens.
One response has been a series of creative efforts to stretch meager
*William Spring is the director. Boston University Regional Institute on Employment
Poliev: others contributine to this study are HIug Smith of the TResionnl Tnstitutc
nnd Margaret Dewar of the Massachusetts Institute of Technology, Department of Urban
Studies and Planning.


Federal assistance as far as possible to create as many jobs as practical.
Two conclusions are clear: There is at least as much work which
needs doing as there are citizens who need work. Federal law. regu-
lations and administration should be redesigned to encourage imagina-
tive job creation with minimum red tape.

Even if a steady economic recovery can be sustained, unemployment
will remain well above normal levels for the remainder of this decade.
In the face of such a grim prospect, pressure for some form of public
job creation on a massive scale will continue to mount.
The. Emergency Employment Act of 1971 (EEA), which estab-
lished a program triggered by an unemployment rate of 4.5 percent,
assumed that periods of high unemployment would be brief and that
the public and private sector job markets would steadily expand.
Therefore it concentrated on providing a "transition" for people from
E.E.A. jobs into the private sector or onto regular civil service pay-
rolls. To make it easier to obtain regular public payroll jobs, the
E.E.A. provided that people be hired for regular municipal positions.
Now, when many localities are cutting regular civil service employ-
ment levels and all face stringent budget constraints, the premises of
the E.E.A. are inappropriate.
However, the assumptions and even the language of the E.E.A. were
incorporated into Titles I, II, and VI of the Comprehensive Employ-
ment and Training Act of 1973, as amended, in December, 1974. Most
CETA public service employment workers have been hired onto State
and municipal payrolls. While "transition" goals remain the stated
objective, under current circumstances of recession, the immediate
imperative is to create the most jobs from limited funding; in short,
to obtain maximum returns from minimal resources. One way to effec-
tively utilize available funds is to develop project approaches to public
job creation, in contrast to the usual civil service "job slot" approach.
Our current public jobs programs present sharp contrasts to the
Works Progress Administration (WPA) during the Great Depres-
sion. Yet the New Deal experience can help to illumine our present
Where the W.P.A. was a Federal program, CETA is administered
locally. Where W.P.A. paid a "security wage" -about 90 percent of
prevailing wages-CETA pays "prevailing wages." Where W.P.A.
usually required an income test, CETA does not, requiring instead
that a proportion of the jobs go to the disadvantaged.
The W.P.A. was conceived at a time when national unemployment
was at catastrophic levels, perhaps a quarter of the entire work force.
The basic structure of the Emergency Employment Act was shaped
when unemployment was at 6 percent and was expected by public
officials to decline soon and sharply.
The W.P.A. operated on a "project" basis. Local jurisdictions-93
percent of the projects were initiated at the local level-would decide
what they wanted done and then apply to the State director of the
W.P.A. for a project grant. Once approved, the project itself was
carried out by Federal officials without the management participation
of local government or private contractors. There was no question of


maintenance of effort because there was no hiring on local payroll,.
Local governments, however, did provide 10 to 20 percent of the costs
of the projects. The results of the W.P.A. project approach are impres-
sive: La Guardia Airport in New York, the Huntington Avenue Sub-
way in Boston and tens of thousands of similar projects across the
country. The program's purpose was limited largely to providing jobs
and constructing things. There was little or no formal skill training
until World War II called for a growing supply of skilled workers.
The current public jobs program came out of a different tradition,
the job training efforts of the 1960's.
The first manpower bill in 1962, the Manpower Development and
Training Act, was aimed primarily at workers who had lost their
jobs through automation-for example, in the coal fields of Southern
Illinois and the packing houses of Kansas City. However, people also
were aware that the employment situation of unskilled workers in
poor rural and inner city areas was desperate. Senator Gaylord Nelson,
now Chairman of the Senate Subcommittee on Employment, Poverty
and Migratory Labor, introduced legislation in 1964 to provide a bil-
lion dollar fund for conservation-related jobs for the unemployed, to
be financed by increased cigarette taxes.
When the White House was making decisions on the 1964 War on
Poverty, the idea of federal spending for job creation was considered,
then rejected. Instead emphasis was placed on expanded training
opportunities for the poor.1 Senator Nelson's concept survived as the
small Mainstream Program, a 1965 amendment to the Economic Op-
portunity Act. Through the decade the idea of a major federal job
creation program was raised repeatedly in the recommendations of
Presidential Commissions on automation, on welfare, and on civil
disorder. In a five year projection of the Office of Economic Oppor-
tunity budget, Director Sargent Shriver estimated expenditures of
nearly $3 billion for public service jobs by 1971.
After those terrifying weeks in the summer of 1967 when seventy-
two people were killed in riots in Newark and Detroit. Senator Joseph
Clark of Pennsylvania and Senator Robert Kennedy of New York
proposed a $5 billion public jobs program. NeTwsweek published a poll
reporting overwhelming citizen support for the idea. However, with
unemployment under 4 percent, and a $25 billion fiscal year 1968
Federal deficit on the way-due to the Vietnam war-the administra-
tion insisted that a job shortage was not the problem and the amend-
ment was easily defeated on the Senate floor.
The concept of job creation was revived by the Congress in 1969 and
1970. It was, in effect, the price Congress demanded for agreeing to
the new administration's decentralized structure for manpower ad-
ministration. All agreed that the red tape of administering 10,000
manpower contracts, for which the Secretary of Labor was nominally
responsible, had become a serious problem. It was also agreed that the
general performance of manpower programs was disappointing, al-
though no one had a really convincing explanation.
The administration argued that State and local jurisdictions could
judge local labor market needs better and therefore could design and
l t was assumed that expansionary overall fiscal and monetary policy could better
provide an adequate supply of jobs.

operate more appropriate programs than the more distant Federal
government. For example, in the administration's view, a model for
Neighborhood Youth Corps activity-with a heavy emphasis on train-
ing-might seem sensible in Washington but senseless in rural Ver-
mont, where the problem was simply the absence of jobs. Similarly,
the way the Department of Labor and Congress chose to divide money
among programs serving different age groups might or might not
make sense in each specific conmunity.
Members of Congress insisted that a direct Federal role could pro-
vide greater responsiveness, to the needs of the poor and powerless.
At the local level, community groups who were administering
Department of Labor contracts often seemed more knov.ledgeable
and more concerned with the problems of the poor than State and
local officials. Interested Senators and Representatives had developed
links over the years between themselves and local agencies and
regional and Federal bureaucracies. They were reluctant to see these
ties cut, but they also felt very strongly that despite the general
prosperity-3.4 percent unemployment in January, 1969-there were
not enough jobs at decent pay in poverty neighborhoods. Manpower
training programs were meaningless where there were no jobs at. decent
pay at the end of the training.
Compromise legislation cleared the Congress in 1970. It granted the
administration request for a decentralized system in a somewhat
altered form, and authorized at least $1 billion a year for public job
It is important to recognize that the public jobs provisions of the
1970 bill were written during a time of generally high employment
in order to provide job opportunities for the disadvantaged. With the
Administration strongly opposed to a major job creation program, it
was no surprise that the Congress provided for a decentralized system
with local elected officials in control. The support of the League of
Cities and Conference of Mayors was crucial. The hope was that by
tying the jobs directly to existing public service structures, the pro-
gram would provide an opening to careers in public service for the
There was language in the bill mandating local jurisdictions to
"overcome civil service barriers" to advancement, to provide training
to people in public service employment, and finally to make every
effort to find non-subsidized jobs in the public or private sector so
program participants could make the "transition" to unsubsidized jobs.
Entry level public jobs generally paid at least as well as comparable
jobs in the private sector. They also provided steady work and were
in the public service sector of the economy, which was growing more
rapidly than any other. Finally, the Congress believed that the public
sector ought to do its share in providing jobs for the disadvantaged.
The compromise provided enough of what the Congress then wanted,
but more than the Administration would accept. The bill was vetoed.
Understanding its background is important, however, because it
formed the basis of the bill which was signed into law seven months
later, the Emergency Employment Act of 1971.
Unemployment rose steadily in 1970, the result of restrictive eco-
nomic policies intended to control inflation. The effort to fight inflation

by slowing down the economy was only half "successful". The economy
slowed down, but inflation continued. Unemployment reached 6.1 per-
cent by December 1970. Inflation approached a similar rate. It was
increased unemployment-especially when the level reached 6 per-
cent-that stirred Congress to action. Also influential was the serious
effect of cutbacks in space and defense spending on unionized workers
and engineers. Returned war veterans without jobs were a particular
concern of the Congress.
The E.E.A. was introduced in January with a bipartisan co-
sponsorship of thirty-six Senators. This bill provided for what had
been vetoed shortly before: public service jobs tied closely to regular
public service positions. It included a process by which better pre-
pared participants might well move on to private sector jobs quickly
when prosperity returned, or sooner, while more disadvantaged
workers would have an improved chance at entry level jobs in the
civil service. Inherent in the title of the bill was the assumption that
unemployment rates of 4.5 percent or above were high and that the
crisis would soon be over. After all, from 1963 to January 1970. unem-
ployment had declined from 5.7 to 3.4 percent.
Some early warnling signs of trouble developed during the adminis-
tration of the E.E.A. Detroit for instance, had an expanding number
of E.E.A. jobs and at the same time it was laying off regular
workers due to declining local revenues. For the nation as a whole,
however, public sector employment continued to expand.
The E.E.A. legislation expired at the end of June 1973. but funds
were still available for expenditure through the rest of the calendar
year. The language of the act was preserved by reference in both
Titles I and II of the Comprehensive Employment and Training Act
of 1973. In fact. the Act, which President Nixon hailed as one of the
finest pieces of legislation to pass the Congress and the first of his
special revenue sharing bills, looked very much like the bill he had
vetoed two years before. The public jobs sections provided public
service employment (PSE) as an "eligible activity" under Title I and
continued P.S.E. in areas having unemployment rates above 6.5 per-
cent in Title II.
Instead of falling, unemployment nearly doubled in the years after
the E.E.A., and still is well above 7 percent. In response to deepening
recession, the Congress added Title VI public service jobs to CETA
and Title X public works jobs to the Public Works and Economic
Development Act in December. 1974. Title VI authorized $2.5 billion
in additional funds through the CETA prime sponsorship system.
Congress also loosened the requirements which tied Title II jobs to
the regular public service system.
The new language recognized some of the problems of local govern-
ments in attempting to find non-subsidized jobs for CETA workers
during a recession. But the difficulties of using CETA, which had been
designed to help the disadvantaged during generally prosperous times,
as a major counter-cyclical job creation vehicle have proved to be
substantial. In a recession, demands for services rise while revenues
fall. Local governments are under pressure to use CETA funds simply
to replace lost local revenue and CETA workers for regular civil

servants. Such use of the program can generate labor disputes without
adding significantly to the national employment totals.
One alternative is to fund specific projects otside the scope of
normal civil service functions, where the need can be documented and
the results of the efforts are visible and worthwhile.
Since funds available for supplies and equipment are sharply lih-
ited under the CETA legislation, it is necessary to find sources of
additional funding for major projects. One possible source of funding
is other Federal grant programs.
Of course, co-ordinating CETA dollars with other sources of Fed-
eral support-whether transfer payments or Community Developnme.nt
Revenue sharing funds-does not magically create more resources
overall. But such co-ordination can make possible an expanded public
jobs program.

The dilemma faced by jurisdictions attempting to use CETA work-
ers wisely as they simultaneously face sharp declines in revenue due
to the recession is well illustrated by events in Bridgeport, Conn.
In January, 1975, it became clear that Bridgeport was in serious
financial trouble. The city's rates of collection of property tax pay-
ments, the principal instrument for financing local services, indicated
that Bridgeport could run a deficit of as much as $2.3 million by the
end of the fiscal year. More alarming still were projections developed
for the fiscal year 1976 budget which showed a revenue shortfall of
$4 million and an increase of city expenditures of $5 million.
The city had signed recent collective bargaining agreements which
called for a seven percent wage increase for municipal employees and
full retirement benefits for police and firemen after twenty years
service. The mayor met in February 1975 with the leadership of the
unions, explained the magnitude of impending financial difficulties,
and attempted to negotiate a rollback in wages to the levels before
the conclusion of the recent contracts. He argued to union leaders that
in the absence of a rollback, the city might be compelled to lay off a
significant number of municipal employees. He could not persuade
them even to submit the question to a referendum of the union
The mayor then announced a series of austerity measures, among
them a freeze of hiring, denial of all grant applications requiring a
matching share of city funds, postponement of all capital projects
not already begun, disposal of excess city vehicles and a curtailment
of all official travel outside the city. These first steps were not enough
to bring the budget back into balance.
The mayor had two remaining alternatives-to raise taxes or to
reduce the size of the municipal budget. Since approximately 80 per-
cent of the budget was for personnel-related expenditures such as
wages and salaries, and retirement, the second alternative necessarily
meant the discharge of city workers. Both alternatives presented seri-
ous difficulties.
Bridgeport is a city of 156,000 inhabitants, of whom nearly 30 per-
cent are black and Spanish-speaking (1970 Census data). The local
economy is based on recession-sensitive capital goods manufacturing,
with a number of firms involved in the production of primary metals,
fabricated metals, machinery and electrical equipment. There had been
high unemployment since the early 1970's, when decreased American
involvement in the war in Vietnam resulted in a reduction of military
expenditures. (A large local employer is Sikorsky Helicopter.) The
recession of 1974-75 had put additional blue-collar workers out of
work. The Connecticut Employment Service reported the unemploy-
ment rate to be in excess of 11 percent in early 1975.
SHugh Smith of the Regional Institute made a substantial contribution to this section.


An analysis of the reasons for the falling rate of tax collect ions in
Bridgeport spotlighted two factors. First, many unemployed workers
were unable to make their municipal payments as they fell due. Sec-
ond, the penalty for delinquent payment, set at 9 percent by the State
of Connecticut, was so much lower than current bank interest rates
that some hard-pressed businesses were in essence taking unauthorized
"loans" from the municipal treasury. It was cheaper to withhold tax
payments and pay the penalties than to borrow commercially.
The city did take immediate steps to begin legal proceedings against
firms which had been withholding taxes. The question of raising taxes
was more difficult. Local advisors to the mayor warned that because
taxes in Bridgeport had doubled in the last ten years and the local
economy was weak, a further sharp increase in local taxes might make
the situation worse. The rate of collections might fall even further
with larger numbers of homeowners finding it impossible to make
the payments. Foreclosing on the homes of unemployed workers was
politically unacceptable and obviously not a sound solution to the
revenue shortfall. Moreover, higher taxes might prompt some employ-
ers to move their operations elsewhere, compounding an already seri-
ous unemployment problem.
A proposed tax increase also posed certain political and adminis-
trative uncertainties which might stymie prompt action to balance
the budget. A tax proposal would have to be submitted to a 20-member
Common Council, evenly divided between Republicans and Demo-
crats, for approval. Even if it was passed promptly, it could not be
implemented under Connecticut law without first being submitted to
the State Tax Commission for approval.
The alternative of laying off city workers was also unacceptable.
Bridgeport is the leader of a CETA consortium for several smaller
surrounding communities. The consortium had received over $5 million
under all titles of CETA. Bridgeport's share was about $2.5 million.
Under Titles II and VI of fiscal year 1974 and 1975 allocations, the
city had hired nearly 500 CETA workers. Because of the identity of
the target groups under Federal regulations-veterans, youth, disad-
vantaged, and welfare recipients, for example-and because of the
special needs of various subgroups of the local population. CETA
workers differed in important ways from their regular civil service
counterparts. Forty-four percent were women and 34 percent were
veterans. While CETA workers were scattered throughout the munici-
pal government and a number of non-profit agencies, due to their
educational backgrounds and previous work experiences, the majority
of them were employed as laborers and maintenance workers. Nearly
half of all CETA participants worked in the Parks and Public Works
Departments. There had already been friction, some of it of a racial
nature. Rumors of impending layoffs exacerbated the situation.
The Department of Labor was drawn in. Provision had been
made in the Federal regulations for "maintenance of effort" on the
part of CETA prime sponsors. However, these regulations were
designed to prevent a municipality from laying off regular city em-
ployees and then rehiring them with CETA funds. No case had arisen
before where a prime sponsor was compelled to consider a bona fide
layoff of regular civil servants. The Region I Manpower Adminis-
tration staff had to formulate new policy, which was later adopted


nationwide by the Department of Labor. Basically, this policy was
that any CETA participant doing the same or comparable work as
a regular city worker in the same department who was laid off had
to be either transferred or laid off. The Department of Labor retained
sole authority for final determinations in cases where maintenance of
effort was at issue.
The city ultimately laid off 300 workers in fiscal year 1975. This
produced a great deal of local acrimony. Bridgeport had a Civil Serv-
ice Commission staffed by five commissioners, appointed by the mayor
and serving fixed terms. The civil service system had been adopted
in the 1930's as part of a reform measure to insulate municipal employ-
ment from patronage politics. Normally city workers must pass a
written examination to qualify for their jobs. Provision is made,
however, for "appointed employees" who are hired outside the civil
service structure. CETA workers technically had been hired as
"appointed employees", and were not involved directly in the layoff.
The Civil Service Commission, like the municipal unions, had been
uneasy with the CETA program from the start, fearing that it at
least potentially threatened the civil service system.
The municipal administration cooperated with the Department of
Labor to minimize the impact of the layoffs on the CETA program.
Especially given the magnitude of the cuts in the regular civil service,
CETA workers were all the more important to the city for the main-
tenance of essential services.
To balance the fiscal year 1976 budget, however, it was necessary
to go even further. The city laid off an additional 200 workers. but
felt it could proceed no further. The alternative was to increase the
local property tax by 8.5 mills, or nearly 16 percent.
After July 1, 1975, the city requested permission from the Depart-
ment of Labor to rehire laid-off city workers using CETA funds,
since they had been out of work long enough to qualify. The MIan-
power administration ruled that this was permissible, but only if the
laid-off workers were not hired for positions which they had formerly
held, and were not paid wages in excess of the CETA guidelines.
The period of fiscal crisis and municipal layoffs generated a perhaps
inevitable backlash against CETA. The CETA program became the
object of attacks from laid-off workers, who charged that they were
being replaced by CETA workers. The Federal ruling permitting the
re-hiring of laid-off workers under CETA improved the situation
somewhat. The mayor, however, had anticipated the controversy
months before and had submitted testimony to the Labor and Edu-
cation Committee of the U.S. House of Representatives requesting
that municipalities be permitted to use a portion of CETA money to
avoid layoffs and an aggravation of local unemployment.

In the greater Boston area a number of cities and towns have moved
toward the project approach, particularly in the area of housing
The following case histories of Boston, Cambridge, Arlington, Som-
erville and Watertown differ widely in funding sources, administrative
arrangements, hiring practices and wages paid. Each, however, illus-
trates an effort made to stitch together a coherent project approach to
public service employment out of legislative authority designed with
other purposes.
Of particular interest is the ingenuity with which local CETA
officials and local housing agency officials co-operate in mixing funds
from CETA ald other sources, especially Community Developiment
Revenue Sharing funds, in order to produce effective programs.
Two prime sponsors in Massachusetts. Boston and the Canlmlridge
consortium, have used CETA workers in projects to deal with housiing
problems. In both, prime sponsor's community development revenue-
sharing funds complemented CETA's labor money to provide for
needed equipment and materials. In every city and town involved.
CETA staff consider the housing work among the most successful
projects that have involved CETA workers.
In Boston CETA employees have worked on rehabilitation of public
housing and have been part of a program offering financial assistalnce
to homeowners for housing rehabilitation. In Cambridge and Somer-
ville. the programs aimed at solving a range of social service and
administrative problems as well as at improving the physical condition
of housing and grounds. In two of the towns in the Cambridge CETA
Consortium, Watertown and Arlington, programs were, like Boston's
effort. aimed only at rehabilitation of housing in the projects. H-ousing
rehabilitation needs in those two towns were far less than in the cities.
The program descriptions that follow tell about how each effort was
organized, what CETA workers did, and how funds were provided.

Boston CETA office staff consider the use of CETA employees to
rehabilitate public housing under the Boston Housing Authority
(BHA) one of the most successful projects involving CETA workers.
About 77 CETA workers are organized into work crews separate from
regular Boston Housing Authority workers to rehabilitate vacant
apartments, to secure elevator and ventilation shafts and repair doors
and basement windows, and to clean up buildings and grounds. Many
of the housing units have been vacant for as long as three years for
lack of maintenance. By the end of July 1975 about 270 units had been
SThis section is largely the work of Margaret Dewar of the Massachusetts Institute of
Technology's Department of Urban Studies and Planning.


rehabilitated in eight housing projects. As a result, many families on
the BHA waiting list have been provided with apartments, and the
BHA's rental income is considerably higher. By relieving the regular
crews of responsibility for major rehabilitation, the CETA work crews
make it possible for regular maintenance crews to keep up with smaller
problems better and, therefore, to avoid the more serious problems that
develop when repairs are neglected or apartments are vacant for long
periods. For example, in two projects in the same neighborhood,
Franklin Field and Franklin Hill, where work by CETA crews had
been most extensive, regular BHA maintenance crews have been able to
improve several hundred other apartment units by painting, replacing
windows, and repairing light fixtures.

Organization of the Rehabilitation Project
The CETA workers assigned to the Boston Housing Authority were
divided into three types of work crews: vacancy crews made up of an
area maintenance supervisor and skilled craftsmen, labor crews under
the supervision of BHA maintenance employees, and security crews.
There are three crews of each type; one of each is assigned to each
B11A maintenance district.
The BHA management department obtains information from hous-
ing project managers about which units are vacant and, with the
project managers, decides the order in which apartments should be
rehabilitated. Emphasis is on large units.
The maintenance department schedules the crews' jobs so that mate-
rials are at the site when the work crews need them. Labor crews move
in ahead of vacancy and security crews to clean up.
Vacancy crews do whatever work is required to make the apart-
ments habitable. That can be replacement of plumbing and electrical
systems or less extensive work such as replacement of bathroom tiles
and repair of floors. Craftsmen on the crews include carpenters, elec-
tricians, glazers, plasterers, plumbers, spray painters, and tile setters.
Security crews work on the same sites as the vacancy crews. These
crews are made up of welders who secure elevator and ventilation
shafts, put bars on basement windows, repair basement and roof doors.
To prevent immediate vandalism of rehabilitated units families are
scheduled to move into apartments as soon as the glazier puts in the
last pane of glass.
The CETA workers' progress is checked by a BHA data system.
The system keeps records of where work should be done, the type of
work, the personnel and supervisors on each project, materials re-
quested to complete the work. The information allows for better man-
agement by BHA coordinators and also provides records of the work
Time required to rehabilitate units varies widely depending on the
condition of the apartments, but results show that the CETA vacancy
teams are rehabilitating apartments at an average rate of one unit per
The CETA workers are all unemployed, card-carrying union mem-
bers. The BHA personnel department interviewed the applicants sent
'to themin hv the Public- FacilitieI)epartment, the city department re-


sponsible for placement of Title VI workers outside regular city
departments. BHA chose workers with construction experience for
members of the crews and with supervisory experience in construction
for area maintenance supervisors. Some area maintenance supervisors
had run their own businesses.
The Boston CETA office hopes that skilled but non-union minority
group and disadvantaged workers can be hired in the future land
obtain construction union membership over time.

Financial Arrangements
The CETA workers earn wages comparable to those the BHA pays
to union workers on regular projects. State law requires that these
salaries be 80 percent of the salaries of union tradesmen in non-housing
authority work as determined by the State Commission of Labor and
Industries. The base on which the 80 percent is calculated is the hourly
wage for a union worker on construction work. Since all the workers'
salaries are over the $10,000 CETA limit, the Boston Housing Au-
thority makes up the difference with Community Development Reve-
nue Sharing (CDRS) funds. The workers' salaries are:
Position: Salrl" '
Area maintenance supervisor -------------------$18, 000
Carpenter ---------- ------------------- 16, 500
Common laborer---- --------- ------------ 12, 300
Electrician --------------------------------18, 500
Glazier -------------------------------- 1,5, 600
Labor supervisor -------------------- -------13, 800
Plasterer ------ ----------------------------16, 300
Plumber --------------------------18, 000
Spray painter---- 17, 500
Tilesetter --------------------------------- 16, 500
Welder -------------------------------18, 500
SSee the table on p. 20 for comparable weekly and hourly wages.
The BHA is using CDRS money to pay for the equipment and sup-
plies for the CETA workers. The allocation for labor and materials
from CDRS for the CETA workers is about $300,000 for the year,
which is part of a total grant of over $:3 million. The community devel-
opment money was allocated to the BHA before CETA began, and
the funding was independent of the assignment of CETA workers.
Representatives from the mayor's office who were responsible for allo-
cating CDRS money considered rehabilitation of public housing a
high priority after meetings with community groups.
Rehabilitation work by CETA employees is also being coordinated
with a community development block grant of $1 million for replace-
ment of windows in one of the projects with the worst vandalism,
Mission Hill. The CETA workers may be involved in the future on a
HUD target program for modernization of apartments at Columbia
Point, one of the city's projects.

The Cambridge Housing Authority (CHA) has thirty Title VI
CETA employees working in crews to rehabilitate apartments, work-
ing as part of CHA maintenance staff to supplement regular mainte-


ianlce teams, and providing additional social services in the housing
projects. The CETA office staff feel that this use of CETA workers has
been particularly effective.
The rehabilitation crews have reduced the number of CHA vacan-
cies by 30%o in about six months of work. Rehabilitation has reduced
the length of time apartments are vacant between tenants. Shorter
vacancy periods means less vandalism and less costly repairs.
The director of the Cambridge Housing Authority points out that
the program has made it possible for families to move into clean,
painted apartments instead of dirty units in very poor condition. The
improvement in morale has been important to improving the condi-
tions of life in the housing projects.

Organization of the Rehabilitation and Maintenance Work
The CETA workers involved in the housing rehabilitation were
organized into teams of five workers each. All the workers are skilled
or semi-skilled in construction related work. Crew chiefs also hired
under CETA are responsible for supervision of the CETA teams.
In most units the crews clean, paint, put new tiles in bathrooms,
repair flooring, replace window sashes and frames. Some apartments
renuire minor electrical and plumbing work. The workers also reha-
bilitate burned out apartments, and some apartments which had been
long vacant or vandalized required more extensive work.
CETA crews have been efficient. Worker discipline has been en-
forced. Three workers were fired soon after the program began when
they did not report for work on time and left work early. The pos-
sibility of promotion to permanent CHA laborer positions served as
an incentive.
Some CETA workers were assigned to regular CHA maintenance
teams rather than to rehabilitation crews. The director of CHA does
not believe that this is as effective a use of CETA workers. It is not
possible to see the CETA work separate from that of other workers.
And their presence may have the effect of reducing the work load
of permanent CHA workers without increasing overall productivity.
Reegular workers in the housing authority were concerned about the
hiring of CETA workers for the CHA. They feared skilled and semi-
skilled CETA workers would mean that regular CHA laborers would
lose chances of promotion. The CHA director assured the workers that
the union contract would be honored, that higher positions would be
filled on the basis of the seniority and skill of regular CHA workers.

Fi;nancial Arrangements
CETA workers are hired under the city's Department of Public
Works for the CHA, and salaries are comparable to the DPW wages.
Crew chiefs for the CETA work teams earn $182.07 per week. Laborers
who are part of the CETA crews and the regular CHA maintenance
teams earn $152.19 per week. The assistant to the housing manager
earns $182.07 per week.
Materials for the rehabilitation have been paid for out of CHA
funds. In fiscal year 1976, however, CHA has a grant of $198,000 from


Community Development Revenue-Sharing, part of which will pay
for materials.
The use of CETA workers and Community I)evelopment Revenue-
Sharing (CDRS) funds on the same projects was: coordinated t lroigh
many meetings between CETA directors and the planners ad 1 a sqpervisi
CDRS in the city's Community Development Departmnent. For the
Community Development planners CETA funds offered subst1 ntial
advantages. Citizens identified public housing rehabilitationl : a high
priority for use of CDRS funds. With the CDI)S restrictils ol use
of funds for labor costs, CETA workers provided a solution.
In the future Title VI money will be used for work experience
programs under Title I so that funds will be available for paying
training staff and more money can be used for materials if necessary.
One completely vacant 18 unit housing project's structure could be
used as an on-the-job training center for workers who have been doing
regular maintenance with CHA teams and for unskilled workers who
could be hired under CETA in the future. All workers hired so far
have been skilled or semi-skilled. The Massachusetts Association of
Housing Authority Maintenance Superintendents, hired in the past
by the Massachusetts Department of Community Affairs to train hous-
ing authority maintenance superintendents, may receive a subcontract
from CETA under Title I to train CETA workers in CHA for super-
intendent positions.
The CHA hopes to receive money to convert small apartments into
large units by breaking through the walls between units. CETA
workers would be trained to do the work.

In Somerville the CETA director assigned 70 workers under Title
II and VI to the regular housing authority maintenance teams, to
service positions, and to the housing authority maintenance ofice. As
a result of the additional staff, it was possible to replace much of the
plumbing systems in several projects, and rehabilitate apartments.
The workers did some jobs that the housing authority could not have
afforded to contract out. On plumbing projects, for instance, the hous-
ing authority would have spent about $900,000 more if the work had
been contracted out. The cost of supplies used by CETA workers
was about $70,000. Of course, the Federal government covered the
wage costs with CETA funds.
According to one tenant, the work of CETA employees made resi-
dents proud of the project and happier to live there. In one project
where over 50 percent of rents had been unpaid. payments increased
to about 86 percent when many maintenance problems were corrected.
Months after the work was done, flower beds, trash cans. and sand-
blasted walls remained unvandalized. The cost of vandalism to main-
tenance equipment went down 40 percent.

Organization of the Ior.c
The housing authoritv's director and assistant director made a
proposal to the CETA office to have workers assigned to the housing


authority. They talked with maintenance work crews to find out how
workers could be added to solve some of the difficulties and requested
workers from the CETA office on that basis.
Approximately 60 workers were assigned to maintenance work,
tripling the original permanent staff of 32. Five permanent workers
became supervisors to oversee the extra workers. CETA employees
were usually part of teams that also included regular workers.
Some teams did regular maintenance. They were made up of 25
workers with the least skills, and were responsible for cleaning
grounds, repairing windows, and routine maintenance. Other workers
were assigned to painting, plumbing, and electrical crews (14, 7, and
3 workers respectively) under the supervision of a regular employee,
a skilled craftsman. Some of the workers had apprenticeship hours
in these trades, and a handful had licenses, but most were unskilled.
Teams began work on simpler tasks, then moved to more complicated
ones as workers became more experienced. The plumbing crew, for
instance, learned to replace faucets first; eventually learned welding
for repairing boilers.
Another group of eight CETA workers were hired as general
troubleshooters. They were skilled workers and worked alone or with
a few workers under them or "floated" to other crews. They responded
to particular maintenance problems or worked on special projects.
One employee was a metal worker who had learned wrought-iron work
in Portugal. He set up a shop for metal work and supervised other
workers in making the new fences for one housing project and for
other public buildings in the city. Another skilled worker was a gen-
eral contractor; another was a mason who put new sidewalks in a
small park.
Three other workers were assigned to the superintendent's office to
improve the response to tenants' maintenance complaints. One worker
received calls for maintenance service at night.
The CETA workers were hired in January. During the winter and
spring months, shops were set up in basements of project buildings
for each trade group. Materials were ordered and organized so that for
the first time it was possible to control the use of materials and to be
certain that needed supplies were on hand. Control systems to conserve
materials were set up, and team supervisors arranged for saving old
materials to be repaired for reuse.
Workers concentrated on a number of major projects. Plumbers
replaced drainage pipes leading from a large number of the projects'
buildings. The original two inch pipe could not handle the volume
of water from modern appliances like washing machines, and, in addi-
tion, had become clogged with deposits so that water frequently backed
up to third floor apartments flooding the units on lower levels. The
old pipe was replaced with three inch pipe, and the water backup
problem ended. Plumbers, tilesetters, and painters replaced or re-
paired fixtures and painted, tiled, and put in new flooring in a large
number of badly damaged bathrooms. Hallways were painted. Apart-
ments which tenants vacated were rehabilitated. New floors were laid,
rooms painted, windows repaired, and any necessary electrical work
completed. The vacancy period between tenants extended from the
usual two weeks to three weeks or a month so that work crews could
do repairs, but, as a result, the assistant director of the housing au-


thority said, the apartments were in better condition for new tenants
than most units on the private market.
When warm weather came, plumbers put new controls on boilers so
that heat could be regulated. The assistant housing authority director
estimated that the improvements would reduce heating costs by a
third for those buildings where the improvements were made, which
meant savings of $68,000 in the first winter alone.
Some work crews were assigned to outdoor projects planned by the
directors of the housing authority and managed by maintenance super-
visors. Substantial improvements were made in one housing project
in particular. A baseball diamond was constructed in a littered, empty
field. An old wading pool was repaired and painted. Grass was planted
and benches built in open areas. Flowers were planted in large boxes
about three feet from the ground for protection from children and
dogs. Wrought-iron fences replaced wooden and chain link ones. A
small park was landscaped. A large number of buildings were sand-
blasted to remove graffiti and then painted with silicone up to the
second floor so that any new graffiti could be washed off. Covered
trash containers were placed through the project. The result was a
very striking improvement in the appearance of the housing project
even when the work was still incomplete.
The assistant director of the housing authority said there were
virtually no problems in assimilating the CETA workers into the
regular staff. There were no early management problems in spite of
the large numbers of new workers. The regular employees' union
initially objected to the new workers because they were afraid the
CETA employees would be used for jobs that would have provided
overtime rather than for new projects. Some workers who had not
been performing were worried they would lose their jobs. .The union's
objections were resolved with arrangements that would keep CETA
workers from interfering with overtime. In addition, the directors met
with the union to see if any workers wanted different jobs that would
overwise be available for the new CETA workers.
The second problem was more serious. The Somerville CETA Office
had hired workers quickly, as the Department of Labor directed, and,
therefore, when funds for Titles II and VI were reduced, had to plan
for layoffs and for the phasing down of the public service employment
program after six months of fiscal year 1976. The housing authority
faced the prospect of the loss of many of their CETA workers leav-
ing many partially completed jobs and enough supplies to last the
regular staff ten years, according to one plumbing crew supervisor.

Financial Arrangements
The housing authority paid for most materials and supplies for the
CETA work with a $50,000 modernization grant from the State's
Department of Community Affairs and a ,55.000 grant from HITD.
The authority received no money for supplies from CETA although
the arrangement the CETA office used to hire Title VI worlers under
a Title I work experience program did allow for the use of 20 percent
of funds for materials. The CETA director pointed out that using
these funds for supplies would mean fewer workers could be hired.
CETA expenditures for supplies were kept down to three or four per-


cent. The work experience arrangement made it possible to hire less
skilled workers and offer more training.
Community development revenue-sharing funds were not used for
public housing rehabilitation because Somerville received only $;00,-
000 in CDRS funds in fiscal year 1976.
All CETA workers were hired for the Somerville Housing Author-
ity. but they were paid salaries that were less than those paid to regular
maintenance employees under agreement with the union. The assistant
director of the housing authority and the director of the CETA office
said it was possible to pay the CETA workers a salary that differed
from the regular employees because they did not do the same work.
They had different job descriptions and had time off for classes and
training. All the workers were hired under Title II. A few mainte-
nance workers were paid the Title II limit, $10.000 per year. All others
earned $140 per week. except for the housing inspectors and a plumb-
er's aide who received $160 per week as of July 1975.

In Arlington workers under Title VI have been organized into reha-
bilitation crews to work on all public buildings. Public housing is in-
cluded in the category, but little of the work has been done on public
housing because there is great demand for CETA workers' services in
painting and repairing municipal buildings and schools.

Organization of the Program
The CETA workers are organized into teams each of which is under
the supervision of a skilled tradesman who gives the workers on-the-
job training. There are four CETA worker-trainees assigned to each
skilled tradesman. A coordinator of the team holds a staff position
under the director of the CETA public employment program. The
coordinator finds the jobs for the teams. He receives requests for work-
ers from the town offices and from the Arlington Housing Authority
and decides which projects to do.
Although the Arlington Housing Authority schedules repainting
for every five years, maintenance crews are far behind; CETA employ-
ees have taken care of some of the backlog. The housing authority
received new stoves for a large number of units, but maintenance work-
ers did not have time to install them. A CETA team supervised by a
plumber put the stove in. CETA employees have also done electrical
work in the apartments occasionally.
The Arlington CETA office has used Title VI money for work ex-
perience programs under Title I. This arrangement allows a larger
proportion of funds to be used for materials (20 percent of total rather
than the 10 percent under Titles II and VI) and provides for salaries
over $10,000 for training staff. For the rehabilitation of public hous-
ing, the traiining staff are the skilled craftsmen who supervise the
teams of workers. In addition, under this arrangement it is possible
for the CETA office to hire unskilled workers for jobs that require
skills because the workers can be trained on-the-job.
In hiring workers for the rehabilitation jobs the CETA director
looked for tradesmen who were also good teachers. For the trainees,


the CETA staff hired people without skills who thought they would
be interested in continuing in rehabilitation work after the CETA
job ended.
Financial Arrangements
The 20 percent CETA Title I administrative allowance paid for
supplies and tools for the rehabilitation of the public buildings and
public housing until a community development revenue-sharing grant
was voted by the town selectmen.
Salaries for the skilled craftsmen/teachers are comparable to what
the Town of Arlington pays on non-CETA projects. Not counting
fringe benefits, these salaries are:
Position : Annual salary
Electrician foreman/teacher-------------------------- $10,932
Plumber foreman/teacher --------------------------, 91032
Carpenter foreman/teacher -------------------- --- -10, 476
Painter foreman/teacher ------------------------- 10, 476
The CETA workers are paid trainee wages, $3.50 per hour, or about
$140 per week, not counting fringe benefits.
While the rehabilitation project has been very successful if one
considers all the work accomplished, the CETA director feels that if
a major goal of rehabilitation work is to improve the condition of
public housing. workers should be placed under the housing authority
rather than made available for general town projects as well.

CETA workers hired under Title VI for the housing authority in
Watertown have made possible extensive improvements in the condi-
tion of housing units and grounds in the housing projects. The director
of the Watertown CETA program considers their work and the re-
habilitation of public buildings by other workers the most successful
use of CETA workers in Watertown.

Organization of the Project
Ten CETA workers are assigned to the Watertown Housing Author-
ity. They are not separated from regular housing authority employees
although they are often on teams composed only of CETA workers.
The CETA workers, like the other housing authority workers, are
supervised by the superintendant for maintenance of the housing
authority who finds out which apartments will be vacant and decides
which apartments should be repaired and which grounds improved.
Skilled journeymen supervise the teams of workers on the jobs. The
journeymen include a skilled painter, carpenter, electrician, and
plumber. The CETA workers assigned to teams supervised by skilled
craftsmen are learning a trade. Some will have their licenses by the
time they leave the housing authority.
The work CETA employees have done includes painting, replacing
gutters and windows, repairing roofs, rewiring, putting in new side-
walks and railings, landscaping, and constructing a basketball court.
They remodeled one apartment into a teen center. Before the CETA
workers' year of employment is over, they will have remodeled another


apartment into a day care center. An asphalt area outside the apart-
ment will be made into a grassy area with playground equipmentt

Financial Arrangements

All funds for equipment and supplies for the housing authority
work have come from housing authority money. The housing authority
has asked the CETA office to help pay for materials next year, but
this may not be possible. The Watertown CETA office decided to use
Title VI money for a Title I work experience program.2 Title I allows
for 20 percent of funds for administrative purposes, including sup-
plies, rather than the 10 percent under Titles II and VI. In the first
year of the program, this money, about $22,000, was spent largely for
equipment and supplies for the rehabilitation work by CETA em-
ployees outside the housing projects.
Officials at the housing authority are applying for special funds
for rehabilitation in the housing projects from the Federal govern-
ment and from the State Department of Community Affairs. Before
CETA workers were available, the housing authority did not have
enough employees to be able to take advantage of these funds.
CETA workers under the housing authority are paid the beginning
maintenance labor wage for the town of Watertown, $4.41 per hour,
or about $176 per week. If a worker supervises a crew on a job, he is
paid slightly more, $4.66 per hour, or about $186 per week.


Annual Weekly Hourly Annual Weekly Hourly

Boston Housing Authority: Cambridge Housing Authority:
$18,000 -..------..-------- $346.15 $8.65 $9,105..---.......------..... $182.07 $4. 55
$16,500__--------. ---- ---- 317.30 7.95 $7,610.............---------- 152.19 3.80
$12,300--............-------- 236. 55 5. 90 $6,700.--..----------..... 134. 00 3.35
$18,500---.........--------- 355.75 8.90 Somerville Housing Authority:
$15,600 ....-----.------.. 300.00 7.50 $10,000..........--------- 192.30 4.80-5.50
$13,800 ------ --------265.40 6.65 $7,280............--------. -. 140.00 3.50
$16,300-----...... .--------. 313.45 7.85 $8,320----....--.----------- 160.00 4.00
$18,000 ...--...--------..---- 346.15 8.65 Arlington Housing Authority:
$17,500 --------- -------- 336.55 8.40 $10,932..........--------- 210.20 5.25
Housing improvement program: $10,476..--........ ------- 201.40 5.05
$12,400 ---------. 238.42 6.80 $7,280 -----..---..--- ------- 140.00 3.50
$9,960.......-- ---------.. 191.57 5.45 Watertown Housing Authority:
$11,990 ..----...... .--------- 230.62 6.60 $9,152---.......----- ----- 176.00 4.41
$11,025_-- --------------- 212.00 6.05 $9,672.....-------... ---- ....186.00 4.66
$10,445 ------------------ 200.90 5.75

2 Under CETA funds may be transferred from Title VI to Title I at the discretion of
prime sponsors.

Tlhe Northeast Kingdom of Vermont, a triangular area formed
by the Connecticut River running from its headwaters south to St.
Johnsbury on one side, the Vermont-Canadian border from New
Hampshire to Lake Memphramagog on the second side, and a line
drawn from Newport to St. Johnsbury on the third side, is one of
the poorest areas in America. The tourist and summer home owner
boom of southern Vermont, has not reached in the Northeast
The area does, however, boast one of the most active Community
Action organizations in the nation, the Orleans County Council for
Social Agencies (OCCSA). It has organized an extraordinary
amalgam of manpower and housing dollars to shape an effective pro-
gram which provides a model for larger scale public service employ-
ment efforts.
A 1972 survey conducted by OCCSA determined that 70 percent of
those who lived in the Northeast Kingdom could not afford to pur-
chase even standard housing, let alone new homes. To meet that need
and with the help of low cost housing loans for low income rural
families, OCCSA built and sold 21 homes through June 1. 1975.
It is critical for any small enterprise, profit or non-profit, to secure
funding which does not require immediate interest payment: other-
wise, it is nearly impossible to attain the rapid growth essential for
survival. Cash that ought to be invested in expansion must go instead
into debt service. In the case of OCCSA, the Office of Economic Op-
portunity (OEO) provided $100,000 in 1973 to serve as a revolving
fund to purchase supplies and equipment. The OEO money was a
grant, not a loan. It provided the equivalent of equity capital. With
the OEO grant money as a start, OCCSA purchased its own trucks
and tools and a small sawmill and planing operation.
This base grant was linked to two other important sources of
financial support:
1. Farmer's Home Administration 30 year loans at one percent
interest with no down payment for low income rural families
buying homes;
2. New England Non-Profit Housing Development Corporation
Housing Assistance Council construction loans based on the avail-
ability of the FHS financing.
There is employment in the project for 93 workers. Building
housing for rural poor does not take jobs away from anybody else.
Waves and training have been paid partially from Titles I and II
CETA funds.
In an area of abundant timber and cold winters, a second OCCSA
effort, the winterization program, has been of assistance both to the


previously unemployed and the rural and elderly poor. Twenty-four
public service employees and two co-ordinators were employed last
winter in projects such as providing fire wood, improving timber
stands, and instructing home owners about heat conservation. Beyond
these ameliorative steps, OEO's housing program provided some funds
for winterization material last winter, including the cost of tools.
Additional material was purchased at cost by those whose homes were
Though successful in its own terms, and an important benefit to
families who thereby have obtained more decent housing, the OCCSA
program is small in scale, even by the standards of need in the North-
east Kingdom. Fifty homes could be built each year without exhaust-
ing the need for many years. OCCSA's success does establish, however,
that the opportunities for useful employment in the construction and
rehabilization of rural housing for the poor are substantial, if sufficient
funds for tools, equipment, and especially long term low cost financing
or mortgag:es are made available. But the full application of such a
model nationally requires that Congress explicitly link major public
service and public works job creation programs with other existing
Federal programs such as the Farmer's Home Administration low
cost housing subsidies. Public employment in the construction of pri-
vate homes for low-income purchases should be authorized by Federal

Our reluctance to recognize that under current economic conditions
there are just not enough jobs at decent pay to employ all available
workers has generated a confusion of program purposes and inspired
economic doublethink. The distinction between programs for those
who are hard to employ due to personal characteristics and those who
simply have a hard time finding a job is a case in point. For most of
the 1:uemp1loyed a job is answer enough.
For some individuals however-ex-addicts for instance-private or
iregular public payroll employment is unrealistic, at least in the short
run. because of personal problems. Such individuals now are con-
demned for the most part to transfer payment support. Is there a
better solution?
In 1972, the Vera Institute of Justice in New York City initiated an
experiment to combine the traditional sheltered workshop idea pre-
viously used almost exclusively for the physically handicapped and the
project-based public service employment. For funding VERA pro-
posed combining welfare or other transfer payments with earned
In New York City the program has provided employment for 3.400
individuals in projects such as refinishing the facade of the City
Municipal Building; cleaning, plastering, and painting police sta-
tions renovating a firehouse; acting as interpreters for Spanish-speak-
ing hospital patients; acting as drivers for the elderly (to and from
hospitals and stores) ; renovating burned-out tenements; and operat-
ing a messenger service for city agencies.
Income support for each employee is composed of: $2,400 a year
from the Supplemental Social Security an ex-addict would receive


anyway, $1,600 from federal training funds and grants and $2,000
from charges to customers-largely city agencies-which utilize pro-
gram services. The project is called "Wildcat." It is supported by thle
Department of Labor, the Law Enforcement Assistance Administra-
tion, the National Institute of Drug Abuse, and the New York City
Department of Employment.
Now an effort is underway to establish similar programs in a number
of areas, under the sponsorship of the Ford Foundation, the Depart-
ment of Labor and a number of other Federal agencies. They have
formed the Manpower Demonstration Research Corporation (MDRC)
to fund and oversee the effort.
In Massachusetts the program is operated by an organization called
Transition Employment Enterprises, Inc. In October 1975, four sepa-
rate supported work business ventures employed a total of 45 clients.
The services include renovation and remodeling, lead-based paint re-
moval, and a printing and graphics operation. An automotive repair
business, started on a pilot basis, has been closed, since an anticipated
State contract for truck maintenance was not granted.
The key to the success of the operation is securing welfare depart-
ment support for the concept of voluntary diversion of transfer pay-
ment income. Securing such agreements is a long and frustrating
process, but progress is being made.
More than half of those employed in the Transition Employment
Enterprise, Inc. program are ex-offenders, as one might expect in a
program that initially was established for the rehabilitation of prison-
ers and drug addicts.
It is difficult to determine the long-term viability of such small-
scale enterprises. They produce needed goods and services and provide
employment to recipients of transfer payments who cannot secure or
sustain employment in the conventional market. If the economy were
close to full employment and employers were under economic pressure
to hire such individuals, these programs might offer work experience
which would help workers to move from dependency to regular
Packaging transfer payments with other sources of support to fund
a jobs program is one possible and promising response to mass unem-
ployment and massive unemployment insurance transfer payments.
As with all sheltered workshops, the wage level is a critical question.
Lower wage, government-supported jobs can be justified only if there
are substantial training and supportive services which offer recipients
a fair chance at self-sufficiency or where recipients, due to personal
disabilities, have few realistic prospects for conventional employment.
Otherwise, the program could have the unfortunate effect of simply
expanding the stock of poorly paid, substandard jobs in the "second-
ary" labor market.

The CETA amendments of December, 1974. included funds for new
projects at the local level to be carried out under Title X of the Public
Works and Economic Development Act. In the latest round of fund
distribution, this has meant another $381 million in Federal funds.


With local contributions, in cash or in kind. the projects will be worth
$583 million, according to Department of Commerce officials.
These jobs were developed outside the CETA system, often by State
and local governments. Jurisdictional conflicts between Congressional
committees and Federal agencies impede a co-ordinated job creation
approach. However, the proposal development process does cast inter-
esting light on the potential for a substantial public job creation
First, the sheer volume of applications evidences the potential of
public service jobs. Although the application process was conducted
in haste (applications had to be submitted by many agencies virtually
overnight), approximately 15,000 projects were proposed at a cost of
$3.3 billion, including 70,415 job opportunities.
The public works approach in the past has been primarily a con-
struction approach. So the costs of supplies and equipment under the
Title X program may provide some indication of the needs for a large
job creation program. Of $583 million in projects, 84 percent is to be
spent for wages and salaries, leaving 16 percent for supplies and equip-
ment. That figure includes local contributions to total project cost of
$222 million.
Under the provisions of the Commerce Department program, the
jobs will last only 8 to 12 months, the designated length of approved
projects. The average labor cost per job on an annual basis is $9,000,
or $4.50 an hour.
Unemployment in Maine, as in the New England area generally,
is at catastrophic levels. One response has been a new committee of
the State legislature, which after extensive hearings has developed
innovative proposals for job creation in Maine.
Maine is paying unemployed workers over $2 million a year in
unemployment compensation. Forty thousand individuals officially are
listed as unemployed in the State. Why not, the Maine Jobs Committee
asked in effect, put those being paid for not working back to work?
The hearings and subsequent analysis resulted in a compilation of
thousands of jobs which needed to be done. Maine officials are con-
fident that the unemployed in Maine would much rather work than
receive transfer payments.
The Maine report also argues that despite all the talk of efficiency
and cooperation among relevant Federal agencies, Comprehensive
Employment and Training Act Title II and VI funds, Commerce
Department Title X funds. Community Development Revenue Shar-
ing and General Revenue Sharing funds are distributed as separate,
categorical programs, rather than being co-ordinated to re-inforce one
The Maine legislators suggest that if Unemployment Insurance-
at least after the 39 week, when all but the appearance of "insurance"
has disappeared and the payments are clearly another Federal trans-
fer payment-could be combined with other Federal grants to States
and localities, much of the money now used to sustain people in en-
forced idleness could be put to constructive, productive use.


Among the products suggested in the Maine Legislature's report are:
Hydro-electric dam restoration.
Elderly home repair.
Lead-based paint removal.
Municipal park, bridge, and building repair.
The proposal would require a quantum leap in local coordination
of planning and spending. It would also require at least an adminis-
trative clarification of Federal regulations limiting the uses of Un-
employment Insurance funds.
Under an amendment to the Soical Security Act approved last June,
after the thirty-ninth week, those drawing unemployment insurance
can be required to take training. Two questions are unresolved:
Whether recipients can receive additional compensation beyond their
unemployment insurance check, for participating in a training pro-
gram, and whether work-training is an acceptable form of training.


An emergency problem exists in the State of Maine and has the prospects of
remaining with us for at least the rest of this decade. Over 40,000 persons are
unemployed, with the actual unemployment rate being appraised by many experts
as several points higher than reported. Another 80,000 persons are in an under-
employed status-those who are working part-time because a full-time job is
not available, or working full-time but making less than a poverty level wage.
As a response to this problem and as a first and immediate step toward a solu-
tion this proposal calls for the non-inflationary use of existing governmental
programs and funds in a comprehensive and innovative manner to promote
The proposal's approach takes into account several facets of the severe unem-
ployment situation. Having assessed the problem, there is an awareness that
prolonged unemployment is having a detrimental sociological impact on the
individuals and families affected. This is above and beyond the obvious economic
Furthermore, while the unemployed citizens of Maine prefer to work rather
than to take an unemployment subsistence allowance, nevertheless more than
$2,000,000 per month is being paid out of the Federal Unemployment Trust Fund
to maintain in an unemployed status those who want to work. Of even greater
concern is the certainty that an ever increasing amount will be paid out of the
Fund in the future as more of the unemployed exhaust their State Unemployment
Benefits. Clearly, therefore, the nature of the unemployment problem in Maine
is such as to defy immediate solution without governmental action.
Accordingly, the proposal recommends that the present federally funded job
creation program (CETA) shift its focus from civil service slots to specific
projects selected by community determination and capable of implementation
within six weeks of funding. Furthermore, that available resources of the
Federal CETA program, the Unemployment Insurance Trust Fund and Com-
munity Development/Revenue Sharing Funds be combined in an effort to maxi-
mize impact efficiency and minimize piecemeal approaches to the unemployment
In this regard several points warrant emphasis:
1. Since we talked of existing programs and anticipated allocations, there
is no reason to believe that an inflationary result would occur;
2. Since we intend to house the program in the State Office of Manpower
Planning and Coordination; as well as to focus attention on projects pre-
viously determined to be of a priority status; there is the prospect for
immediate impact on the unemployment picture;
3. Since we are combining several existing sources of money in an effort
to produce a concerted impact on unemployment, there is the likelihood of
minimizing bureaucratic overlap and maximizing comprehensive results.
While assuredly a high degree of flexibility must be provided to promote rapid
implementation, the process of implementation would be guided by the Canadian
Local Initiatives Plan. In addition, the parameters for selection would require
that the projects be labor intensive, immediately implementable, short term in
nature, and geared to structural and visible community betterment that would
complement existing development efforts.


Possible projects include:
A home repair for the elderly program,
Improving the Bangor Bass Park,
The development of Fryeburg Municipal Park,
The construction of a community building for Georgetown,
The construction of a community building for Mercer,
A hydroelectric dam restoration project,
Removal of lead-based paint from residences,
The construction of a recreational center for Dexter,
The maintenance of ocean beaches in Scarborough, Old Orchard Beach,
and the City of Saco;
A program to provide human service jobs for women;
The construction of a fire station in Holden,
The development of a park in Southwest Harbor;
The development of State owned land in Rogue Bluffs,
The construction of a municipal garage in Enfield,
The creation of a public green belt in Augusta,
The construction of a fishway at Sherman Lake,
The repair of bridges at Baxter State Park,
The establishment of a State Veterans Home,
The repair of a dam at Anabessacook Lake,
The construction of site and facilities for a Casco Bay Island Ferry,
The installation of flood warning devices in Hallowell and Gardiner,
The repair of Dead River Dam and the rebuilding of the dam at Lake
These are just a few of the labor-intensive projects that can provide jobs to
the presently unemployed.
The time appears right for a program that benefits the individual, the State
of Maine and the Federal Government. We seek approval to demonstrate its


The program would use existing MESC fund payments to unemployed plus
CETA and other currently available federal funds to put people to work on
constructive WPA/CCC type projects originated by local communities and meet-
ing local needs.
The basic intent is to substitute a "pay to work" philosophy for a "pay to
stay home" philosophy. "The unemployment fund was not created to be what in
fact it has become: a system that maintains unemployment."

Basically this does not involve new funds but a redirection of present funds
including $2 million a month in unemployment, CETA, community services
and revenue sharing.
The program would make use of existing agencies, offices and staff such as
MESC to administer the program.

The report stresses the permanent psychological damage to a person, particu-
larly to a middle aged person, of a prolonged period of unemployment.. . citi-
zens who were using unemployment benefits preferred to work rather than
taking an unemployment subsistance allowance."


The program would call for a cooperative effort at all levels of government
and would involve both local communities and private business.
Federal-CETA--Community Dev.-Revenue Sharing.
State-MESC unemployment funds-administration.
Local-Project Determination-cost materials.
Private-Project Direction-use of equipment.

Elderly Home Repair State Land Development
Municipal Parks Municipal Garage
Community Buildings Bridge Repair
Hydro-Dam Restoration Fishway-Sherman Lake
Lead Based Paint Removal State Veterans Home
Beach Maintenance Flood Warning Devices
Fire Station Construction


The Massachusetts Local Initiative Program (MLIP), based upon the well
publicized Canadian Job Creation Model, was developed by the Commonwealth's
State Manpower Services Council during the early part of 1976. The overall
objectives of the program were (1) to provide a community with a good or
service, which in some way improves the quality of life and is pre.ently need(e
but unavailable and (2) to offer productive employment to CETA-eligible unem-
ployed individuals, groups of individuals, community groups, non-profit organi-
zations, or governmental units. Thus, the program was sufficiently flexible to
allow consideration of various innovative and experimental proposals.
Nearly 500 proposals were submitted for funding under this program, while
only 27 projects were actually funded. Approximately $1,000,000 ha, been set
aside by the State Manpower Services Council for these four-to-six month
projects. These MLIP projects will create more than 280 jobs, while servicing
the physical and cultural needs of neighborhoods throughout the Commonwealth.
Examples of funded MLIP projects include those dealing with cultural activities,
conservation and beautification, day care and food co-op services, and home
improvements for the elderly.


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