COMMITTEE ON APPROPRIATIONS

CLARENCE CANNON, Missouri, Chairman

OFFICE OF EDUCATION, FEDERAL SECURITY AGENCY

HEARINGS CONDUCTED BY THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF DEFICIENCY APPROPRIATIONS

FRIDAY, MAY 22, 1942.

STATEMENTS OF DR. J. W. STUDEBAKER, COMMISSIONER OF EDUCATION; L. S. HAWKINS, DIRECTOR, DEFENSE VOCATIONAL TRAINING; AND COL. N. A. BURNELL, DIRECTOR, DEFENSE TRAINING, FEDERAL SECURITY AGENCY

EDUCATION AND TRAINING OF DEFENSE WORKERS-PREEMPLOYMENT AND SUPPLEMENTARY COURSES OF LESS THAN COLLEGE GRADE

The CHAIRMAN. Dr. Studebaker, we have an estimate before us in House Document No. 726, of $9,500,000 for the education and training of defense workers, for an additional amount for payment to States, as follows:

Education and training, defense workers (national defense): For an additional amount for payments to States, and so forth (national defense), fiscal year 1942, for the cost of vocational courses of less than college grade, as provided in paragraph (1) under this head in the Labor-Federal Security Appropriation Act, 1942. Do you have a prepared statement, Doctor?

JUSTIFICATION OF ESTIMATE

Dr. STUDEBAKER. This is a prepared statement on it. (The matter above referred to is as follows:)

JUSTIFICATION OF SUPPLEMENTAL ESTIMATES

Education and training, defense workers, Office of Education (national defense): Supplemental estimate requested for 1942. $9, 500, 000 The justification which is presented in some detail below, may be summarized as follows: On the basis of present enrollment trends in preemployment and refresher and supplementary courses there will be a deficiency of approximately $9.500,000. This amount, it is estimated, is required to provide the volume of training hours over and above the training hours which can be provided with funds currently available. The appropriations currently available were based on estimates submitted by the United States Office of Education in February and March of 1941. Since the State and local vocational training authorities mist make commitments now for the operation of the program in May and Jane, it is greatly important that these additional funds be authorized if a drastic curtailment of the training program is to be avoided.

It has been assumed that enrollments in April, May, and June of this year will increase at a fairly constant rate. This is in line with the employment outlook for the second quarter of calendar year 1942, which indicates a marked expansion of industrial activity and employment provided additional trained workers are

1

available when and where they are needed. A statement of the employment outlook for this period has been prepared by the Bureau of Labor Statistics, Occupational Outlook Division, and is incorporated in appendix A of this justification. For convenience in following the line of reasoning underlying the request for this deficiency appropriation, we are submitting a detailed justification in the form of a series of propositions:

1. On the basis of estimates made in March 1941, for the fiscal year 1942 Budget, it was estimated that we could provide 164,285,000 preemployment training hours and 71,600,000 supplementary training hours at a total cost of approximately $52,400,000, the actual appropriation. Converted to unadjusted cumulative enrollments this represents 915,000 in the preemployment and refresher courses and 915,000 in the supplementary courses. We estimated at that time that the cost per trainee per hour was, roughly, 21 cents for preemployment and refresher enrollments and 25 cents for supplementary enrollments. The original presentation of the United States Office of Education indicated an estimated unadjusted enrollment of 1,056,000 in preemployment and refresher courses and 795,994 in supplementary courses, which called for a total cost of $55,467,000 or approximately $3,000,000 more than the actual appropriation.

2. We estimate now that we will be required to provide 217,575,000 preemployment training hours and 84,585,000 supplementary training hours during the whole of fiscal year 1942 at a cost of $66,837,000.-The same unit hourly cost per trainee has been utilized in these estimates. Actual enrollment data between July 1, 1941, and March 31, 1942, indicate that we have provided 146,039,000 preemployment training hours. On the basis of present trends we estimate that we will have to provide for the remaining 3 months of fiscal year 1942, 71,536,000 additional preemployment training hours, making a total of 217,575,000 preemployment training hours to be provided during the fiscal year 1942. The actual supplementary training hours provided from July 1, 1941, to March 31, 1942, was 60,906,000. We estimate that in the remaining 3 months we will have to provide 23,679,000 additional supplementary training hours, making a total of 84,585,000 supplementary training hours to be provided during the entire fiscal year 1942. The estimates for the remaining 3 months of fiscal year 1942 are based on the assumption that the rate of increase demonstrated since Pearl Harbor will be maintained. These training hour data are equivalent to the unadjusted enrollments of approximately 1,200,000 in preemployment and 1,100,000 in supplementary. It is these unadjusted enrollments which are comparable to the 915,000 enrollments in each type of course indicated in the discussion under proposition 1. Since July 1, 1941, our statistical reporting methods have been revised to measure not only enrollments but also different persons. The adjusted enrollments indicate the number of different persons taking training. The estimate of adjusted enrollments for fiscal year 1942 is 1,040,000 persons in preemployment courses and 988,000 in supplementary courses.

3. Funds are, therefore, lacking to provide 53,290,000 preemployment training hours and $12,985,000 supplementary training hours. In money terms this is equivalent to a gross deficiency of $14,437,000.-This estimate was arrived at by multiplying training hours by the cost per hour for each type of training.

4. $5,000,000 from funds appropriated in fiscal year 1941 were available for expenditure in fiscal year 1942, leaving a net deficiency of approximately $9,500,000. A ruling of the Comptroller General authorized the United States Office of Education to permit the use of funds appropriated in 1941 for obligations initiated in fiscal year 1941 but continuing through to fiscal year 1942.

It is, of course, not necessary to dwell too much on the point that the appropriation of $52,400,000 was based on estimates made in February and March of 1941. At that time the United States Office of Education had a background of statistical data of only 5 months. Moreover, the events following Pearl Harbor have stimulated an enormous expansion in employment and consequently in training requirements. For that matter, even prior to Pearl Harbor there could be observed constant increases in the production goals which were being set for defense.

The financial condition of the United States Office of Education and the State boards for vocational education as related to the fiscal year 1942 appropriation of $52,400,000 and to the proposed deficiency appropriation is briefly summarized below. The details appear in tables 3 to 6 inclusive accompanying this justifi

cation.

The total 1942 appropriation for 1942 under Public Law 146 was $52,400,000. Charged against this amount are the following: $37,965,780 disbursed by the States as of April 30, $9,609,945 in obligations as of April 30, and $14,358,000

estimated cost of training for May and June, making a total of $61,933,725. When this latter sum is compared with the available 1942 appropriation it leaves $9.533.725 or $9,500,000 in round figures, to be covered by the proposed deficiency appropriation.

It should be noted that the problem of determining the amount of funds required to carry the vocational education-national defense program through June 30, 1942, was attacked by several methods, the result of which while varying from each other by relatively small amounts, in every case indicated the need for an additional appropriation of approximately $9,500,000.

If the program continues to operate at its present rate of expansion, we estimate that our current appropriation will be exhausted sometime during the middle period of May 1942.

APPENDIX A

DEPARTMENT OF LABOR,

BUREAU OF LABOR STATISTICS,
Washington, April 18, 1942.

Mr. LAYTON S. HAWKINS,

Director of Defense Training,

Office of Education, Washington, D. C.

DEAR MR. HAWKINS: In accordance with your request to the Occupational Outlook Division, I am transmitting the attached memorandum on the employment outlook for the second quarter, 1942.

Very truly yours,

A. F. HINRICHS,

Acting Commissioner of Labor Statistics.

EMPLOYMENT OUTLOOK FOR SECOND QUARTER 1942

Present indications point to a marked expansion of industrial activity and employment in the second quarter of 1942 provided additional trained workers are available when and where they are needed.

2 In the first 3 months of the year industrial production, as measured by the Federal Reserve Board's index, was considerably greater than anticipated by business analysts. Declines that may have been expected as a result of the Caversion process then taking place were wiped out by the general advance in te production of war goods. Treasury expenditures for war rose from $1.8 on in December to $2.8 billion in March. The Federal Reserve Board's index of industrial production advanced to 170 in March, unadjusted seasonally, after dropping to 163 in December from 167 in the preceding 3 months.

3 Progress in the letting of war contracts and the quickening tempo of war production, despite conversion problems, support earlier estimates made by the Breau of Labor Statistics and other Government agencies that large gains in industrial output and employment may be anticipated from the second quarter to the end of the year. As forecast in the Bureau's Employment Outlook for February 1942: Expanding armament production, coupled with seasonal gains in other manufacturing industries, is expected to lift the Reserve Board's index to 180 by midyear and to about 195 by the end of 1942.

4 Nonagricultural employment in the second quarter is expected to average 1.000.000 higher than the first quarter average. Of this increase about 450,000 w occur in manufacturing. The remaining half million or more will represent additional employment in transportation, public utilities, construction, and other Dormanufacturing industries.

5 The marked gains in production in the first quarter of the year were achieved lary as a result of increased hours of work in manufacturing industries. Though oyment increased in many important war industries, the total number of Workers in manufacturing establishments averaged less than in the final quarter of 1941. Total man-hours rose as average weekly hours in manufacturing in12.4 percent from 41.2 hours in December to 42.2 in February. In the durable manufacturing industries, where war production is concentrated, average Weekly hours advanced from 42.8 in December to 44.4 in February, for a gain of 3.7 percent.

6 The fact that increased output in the first quarter was largely dependent po longer working hours emphasizes the growing tightness of the labor market and underscores the necessity for continued expansion of recruitment and training programs in order to provide workers for further gains in war output in the period ahead.