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11-05-2015, 04:14

Comprehensive Employment and Training Act (CETA) (1973)

In December 1973, in a time of high unemployment and after considerable negotiation with the Nixon administration, Congress enacted the Comprehensive Employment and Training Act (CETA). This legislation consolidated a variety of federal job programs that had been created during the 1960s. Community action programs such as job training, the Job Corps, and the Neighborhood Youth Corps were brought together with programs from the 1962 Manpower Development and Training Act and the Job Opportunities in the Business Sector program. Designed to move program control away from the federal government, CETA designated states and local communities as “prime sponsors” of program activities. Funds flowed to the states in block grants, and local administrative units were given considerable decision-making power over the types of training provided, the groups of individuals served, and the institutions offering training and other services.

The CETA program used two basic strategies for increasing employment of low-wage individuals:

(1)  Title I classroom and on-the-job training and education to provide workers with additional skills to enable them to compete in the labor market, and

(2)  Title II public service employment (PSE) to offer subsidized jobs to help increase worker skills while providing useful work. Three remaining titles in the legislation authorized several targeted programs for groups such as youth and migrant workers, continued the 1960s Job Corps program for youth, and created the National Commission for Manpower Policy.

Initially, CETA emphasized training activities. In fiscal year (FY) 1974,funds appropriated for Title I training activities totaled over $1 billion, compared to only $620 million for public service programs. The first CETA programs consisted of locally operated classroom and on-the-job training programs. However, just a year after passage of the original legislation, the high national unemployment rate stimulated enactment of the Emergency Jobs and Unemployment Assistance Act of 1974, which established an additional PSE program as Title VI ofCETA.

Because the unemployment rate had by then topped 8 percent and the employment requirements of this new title were less restrictive than those of the original Title II, local prime sponsors quickly received enough federal funds to subsidize hiring tens of thousands of new PSE workers. John Donahue (1989) noted that by May 1975, cities and counties had hired approximately 300,000 workers with federal funds (Donahue 1989).Many had marketable skills and higher educational levels than the disadvantaged individuals for whom CETA was originally designed. These hiring practices led to the “fiscal substitution” criticism long associated with CETA—the notion that federal funds were used to subsidize the employment of individuals who would have been hired as regular employees by local governments. Nancy Rose (2001) pointed out, however, that as the recession of the mid-1970s took hold and states began to implement tax limitation initiatives, many government services might not have been provided without employees paid through CETA.

Over its nine-year life, CETA was amended several times. Although its training efforts remained relatively constant, they were ultimately dwarfed by the allocation of increasingly larger amounts of expansion funds for public service employment. At the close of the Ford administration in 1976, the Emergency Jobs Programs Extension Act responded in some measure to the substitution criticism by tightening the eligibility requirements for PSE positions. The next year, in keeping with the interests of the new Carter administration, the Youth Employment and Demonstration Projects Act (YEDPA) created three special youth training and work experience programs. Also in 1977, a Skills Training Improvement Program (STIP) was added to Title III of CETA to serve dislocated workers, and the Help through Industry Retraining and Employment (HIRE) program was added to train veterans. Passage of a supplemental appropriations bill facilitated rapid local expansion of public employment pro-grams. A federal goal was set for creation of 725,000 PSE jobs by spring 1978.

By the time CETA came up for legislative reauthorization in 1978, the growth of PSE had generated much criticism. National employment levels had improved, yet the program was still supporting more than 200,000 public service jobs. Paul Bullock noted that the inconsistencies contained in the original CETA legislation were compounded by subsequent amendments. Congress grappled with several concerns during the reauthorization process: (1) the legislation and subsequent amendments targeted the structurally unemployed, but broad eligibility criteria allowed prime sponsors to select a wide variety of enrollees; (2) guidelines promoted “creaming” (enrollment of higher-skilled unemployed individuals); (3) CETA was designed to allow for local discretion in enrollment and services, but over time, Congress mandated services to more and more categorical groups (for example, veterans, youth, the handicapped); and (4) there was no required connection between the training and PSE components of CETA, and no funds were provided to train public service employees (Bullock 1981, 56-60).

The drafting of and debate over the 1978 CETA reauthorization legislation took several months. The compromise reauthorization bill that finally was enacted in October 1978 did not please CETA critics, nor did it clear away the legislative inconsistencies. On the one hand, an effort was made to respond to continuing concerns about creaming. PSE job tenure and salaries were limited, and the program was specifically targeted to the unemployed, underemployed, and economically disadvantaged. Eligibility for this program required unemployment of at least fifteen weeks and low family income or receipt of Aid to Families with Dependent Children (AFDC) or Supplemental Security Income (SSI).

On the other hand, Congress used Title III to add even more federal programs for special groups— this time including displaced homemakers, single parents, and those without educational credentials. Title IV extended youth programs and required creation of a youth council to advise prime sponsors. Most upsetting to PSE opponents was Title VI reauthorization of the PSE program and the addition, in Title VII, of an entirely new Private Sector Initiative Program (PSIP).The latter was designed to increase the involvement of the private sector in CETA programs and required prime sponsors to establish business-dominated private industry councils (PICs) to oversee development, implementation, and evaluation of prime sponsor CETA programs. Finally, a new Title VIII offered conservation work experience for youth through the Young Adult Conservation Corps (YACC).

Passage of CETA in 1973 and consolidation of employment and training programs brought important changes to the employment and training field. Not only was planning and program implementation responsibility shifted from the federal level to local authorities and prime sponsors, but community-based organizations also played an increasingly important role as CETA evolved. Bullock (1981) noted that by 1981—one year prior to the termination of the CETA program—cuts in CETA appropriations and the changes included in the reauthorization legislation had resulted in significant growth in the number of PSE staff employed by community organizations. The enactment in 1978 of the new Title VII, mandating private sector involvement in CETA, represented an especially important change. The formation of PICs and orientation of businesspeople to the world of government employment and training programming took time but established the groundwork for business to play a larger role in workforce development.

The 1973 consolidation of employment and training programs under CETA brought expansion of program evaluation initiatives. Beginning in 1975, a random sample of CETA participants was tracked through the Continuous Longitudinal Manpower Survey (CLMS) and was matched with a control group of sorts from the Current Population Survey conducted by the U. S. Bureau of the Census. Throughout CETAs life, the differences in findings among evaluation studies using program statistics and economic data were considerable, especially in critical areas such as degree of fiscal substitution and economic impact of public service job creation. Bullock (1981) attributed these differences to variables such as the periods covered by studies, the number and status of prime sponsors involved, vari-ation in assumptions, and changes in legislative requirements over time.

In his 1995 review of evaluation studies of employment and training programs, W. Norton Grubb (1995) noted that the general conclusion from the CLMS tracking studies was that women benefited the most from CETA participation, with $500 to $1,000 in increased earnings per year. Some studies actually found that the impact of the program on men was statistically insignificant and that for youth, the effects were zero or negative. Other study findings suggested that both classroom and on-the-job training had a greater impact than work experience and public service employment. Grubb noted that the various evaluations studies were “most remarkable for the range of findings” (Grubb 1995,18).

The Brookings Institution introduced the use of field studies, conducted for the National Commission for Employment Policy in July and December 1977 with a sample of thirty-one prime CETA sponsors (Bullock 1981). The study was critical of the training component of CETA, noting that prime sponsors gave little attention to participant training needs and tended to provide mostly on-the-job training (National Commission for Employment Policy 1979). Burt Barnow’s 1986 review of a number of evaluation studies in the Journal of Human Resources concluded that on-the-job training appeared to carry more impact than classroom training.

During the 1970s, the Committee on Evaluation of Employment and Training Programs of the National Research Council (NRC) conducted a series of studies of twenty-eight prime sponsors throughout the country, using census data, field documents and interviews, and official reports from the Department of Labor. Early studies confirmed the view of many CETA critics that only a small number of participants in the public service employment program were economically or socially disadvantaged (for example, members of families receiving welfare benefits or individuals faced with employment barriers such as low education levels or language skills) (Mirengoff et al. 1980a, 101). Evidence was also found to support claims that local governments were engaging in the practice of “substitution”— using federal funds to pay for employees who were usually supported by state and local money. During the period between June 1974 and December 1976, substitution averaged 35 percent (Mirengoff et al. 1980a,39).

In 1979, soon after implementation of the CETA amendments began, the NRC evaluation committee undertook a new study of twenty-eight areas across the country. This study found that more economically disadvantaged individuals—women and minorities—were being hired into public service jobs. However, the committee also found that welfare recipients were underrepresented in the service population and that wage restrictions had brought average public service program wages down because prime sponsors were forced to drop higher skilled positions (Mirengoff et al. 1980b, 45-102).

The FY 1981 federal budget severely cut CETA funding, and by the spring of 1981, the new Reagan administration had already made clear that it would not support reauthorization of CETA the next year. Ironically, because such a variety of elements had been packed into CETA over the years, many were actually included in its successor legislation, the 1982 Job Training Partnership Act. Although public service employment was eliminated, local service delivery areas were preserved, as were a number of youth programs, training for disadvantaged individuals, and the involvement of the business sector in local employment and training operations.

In the years since CETA was in force, the view of the program has moderated with hindsight, and some agreement has emerged that there were a number of positive program effects. Once the CETA eligibility requirements were tightened, the program improved the skills and job prospects of lower-income participants—particularly women. An important CETA lesson, which was incorporated into future programs, was that lower-income participants needed individualized training plans and support services to succeed in employment. Although there was serious criticism of the practice of fiscal substitution, in a climate of recession and state and local tax limitations, CETA enabled towns and cities to maintain public services that might otherwise have been eliminated. Finally, Nancy Rose observed, “CETA workers developed community recreation and arts programs, set up screening clinics in hospitals, and weatherized low-income homes. They worked in law enforcement agencies, day care and senior centers, battered women’s shel-ters, and even in some activist organizations” (Rose 2001,4). Today’s human service landscape remains populated with individuals and organizations that got their start in the days of CETA.

Natalie Ammarell

See also Job Corps; Job Training Partnership Act; Welfare to Work; Workforce Investment Act

References and further reading

Barnow, Burt S. 1986. “The Impact of CETA Programs on Earnings: A Review of the Literature.” Journal of Human Resources 22 (February): 157-193.

-. 1999.“Job Creation for Low-Wage Workers:An

Assessment of Public Service Jobs, Tax Credits, and Empowerment Zones.”

Http://aspe. os. dhhs. gov/hsp/lwlm99/barnow. htm (cited May 15,2003).

Baumer, Donald C., and Carl E. Van Horn. 1985. The Politics of Unemployment. Washington, DC: Congressional Quarterly Press.

Bullock, Paul. 1981. CETA at the Crossroads: Employment Policy and Politics. Los Angeles: Institute of Industrial Relations, University of California.

Congressional Budget Office and National Commission for Employment Policy. 1982. CETA Training Programs: Do They Work for Adults? Washington, DC: National Commission for Employment Policy.

Donahue, John D. 1989. Shortchanging the Workforce. Washington, DC. Economic Policy Institute.

Franklin, Grace A., and Randall B. Ripley. 1984. CETA: Politics and Policy, 1973-1982. Kno:xvine: University of Tennessee Press.

Grubb, W. Norton. 1995. Evaluating Job Training Programs in the United States: Evidence and Explanations. Berkeley: University of California.

Mirengoff, William, Lester Rindler, Harry Greenspan, and Scott Seabloom. 1980a. CETA: Assessment of Public Service Employment Programs. Washington, DC: National Academy of Sciences.

Mirengoff, William, Lester Rindler, Harry Greenspan, Scott Seabloom, and Losi Black. 1980b. The New CETA:

Effect on Public Service Employment Programs—Final Report. Washington, DC: National Academy of Sciences.

National Commission for Employment Policy. 1979. Monitoring the Public Service Employment Program: The Second Round. Special Report no. 32.Washington, DC: National Commission for Employment Policy.

Rose, Nancy. 2001. “Workfare vs. Fair Work: Public Job Creation.”Http://www. njfac. org/us16.htm (cited January).

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