Hard Times for JOBS

Launched with much fanfare 18 months ago, the combined Government-business drive to hire hard-core unemployed--particularly blacks--is becoming a casualty of the economic slump. The so-called JOBS program (for Job Opportunities in the Business Sector), which was organized by the Department of Labor and by the National Alliance of Businessmen, provides federal training grants averaging $2,400 per man to companies that agree to employ and train the unskilled. A Senate Labor subcommittee has turned up evidence to prove that, while the Government aimed at enrolling 140,000 men and women in the program during the fiscal year ending this month, only 99,000 were hired and fewer than 40,000 of them were still on the job last March 31. The letdown in JOBS is one reason that the unemployment rate for Negroes rose in April from 7.1% to 8.7%.

Bumped by the Rules. Some JOBS programs have indeed done well. Raytheon has retained 99% of the people it hired, and a number of trainees rise to become secretaries and draftsmen. American Airlines, Eastern Air Lines and New York's Consolidated Edison also report successes. But Chrysler Corp., on the other hand, has canceled one of its several JOBS contracts calling for 4,450 production employees; and Chrysler's Chairman Lynn Townsend is the N.A.B. chief for the whole country. The company retained other contracts and has signed one to train 1,000 auto mechanics at its dealerships. Of Zenith Radio Corp.'s trainees, 28% have dropped out since the program started last July, and another 61% have been laid off. "Should there be a further downturn in the economy," said Leonard F. Luce, Zenith's director of Equal Opportunity Programs, "it will be necessary to lay off the balance of those still with us." Many firms reported that the layoffs were simply a matter of older workers bumping out trainees under union contract rules.

Senator Gaylord Nelson, the Wisconsin Democrat who chaired the subcommittee looking into JOBS, found shortcomings and abuses in the current system. Some badly conceived JOBS programs have had dropout rates of 70%, or even 100%. The program has not reached black teenagers; unemployment among them is more than twice that of white youths. Most of the 25,000 firms that signed up with N.A.B. to support JOBS are big companies, but the employment opportunities among smaller businesses have not really been tapped.

Dead Ends? A few companies have used Government training grants to subsidize their wage costs and have skimped on teaching. Others have used the program to recruit and hold unskilled labor in dead-end jobs. A California company, for example, contracted to give 322 hours of on-the-job training at a cost to the Government of $4,173 per man, but most of the jobs were so simple that it took only from two hours to two days to learn the routine. A Detroit manufacturer agreed to train machinists, but turned some of them into general laborers.

Labor Secretary George Shultz stoutly defends JOBS, though he admits that the economic slowdown has hurt the program, and that in the months ahead some funds will be shifted away from it as a budget-paring measure. Senator Nelson argues that at least part of the subsidy money--$110 million this year --would be better spent on federal work programs. He introduced a bill authorizing $1 billion to create federal and local government jobs. His subcommittee staff report zeroes in on the main problem: "To ask the private business sector to use the JOBS program as a solution for unemployment in a declining economy is like asking them to solve a financial crisis by writing more checks."

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