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Chapter 8: Carter Administration, 1977-1981



In January 1977 Jimmy Carter succeeded Gerald Ford as President after defeating the incumbent in a close election. The economy was in a recession when Carter came to Washington. Immediately upon taking office, he declared that his primary domestic goal was to create jobs for the unemployed. At his request, Congress passed an Economic Stimulus Appropriations Act to create jobs and help the economy. The Carter Administration also sought to make government more efficient and productive and less burdensome by continuing the task of reforming the regulatory system begun during the Nixon Administration. Also contributing to this goal was the Civil Service Reform Act passed by Congress at Carter's request. Unemployment declined, but massive cost-of-living increases stimulated by huge oil price hikes in the Middle East soon dominated the Administration's domestic agenda. There was little it could do to control inflation, which soon reached double-digit levels. The holding of American hostages taken by Moslem fundamentalists in Iran in November 1979 became the Administration's over-riding concern until Carter left office in January 1981, defeated by Ronald Reagan.

To be his Secretary of Labor, Carter selected Ray Marshall, a labor economist at the University of Texas. Marshall had worked and published extensively on unemployment problems, particularly for minority groups. He had also worked in such areas as industrial relations, rural development and international migrations of workers. Marshall saw his role as Secretary as setting overall policies, selecting subordinates who would best achieve these policies, and representing the Department in external relations. Like many of his predecessors, Marshall believed in refraining from unnecessary intervention in collective bargaining. He sought to improve the representation of qualified women, blacks and other minorities among the Department of Labor's political staff. He sought to develop adequate relations and liaison with groups ranging from the White House, Capitol Hill and state government to unions and business. To improve the performance of the Department, Marshall emphasized the need to simplify operations and strengthen the Department's policy analysis capabilities.

The Department played a major role in the President's economic stimulus program. It received about $8 billion for Public Service Employment and other programs under CETA. Public service jobs increased from 310,000 in 1976 to a peak of 725,000 in 1978. The Department also expanded the Job Corps and other youth training programs. It developed and tested new ways to meet employment related needs of rural workers and Native Americans. It improved on-the-job training for veterans and others through the Hope through Industry Retraining and Employment program. This program provided incentives for companies to hire and train needy persons. A Skill Training Improvement Program provided retraining for displaced workers to prepare them for jobs by giving them skills which were in short supply.

CETA was extended and revised by the 1978 reauthorization act. This legislation was driven by two concerns: the need to make employment and training more effective through greater involvement of the private sector; and, the concern that CETA resources were not targeted on those most in need. The major new feature was the Private Sector Initiatives Program. PSIP complemented the public employment program already in full swing. The main goal of PSIP was to redirect CETA toward placing the unemployed in jobs in the private sector. To do this, PSIP sought to increase the participation of private employers in CETA programs. Enacted as a two-year demonstration program, PSIP helped private firms provide job training for disadvantaged persons and the long-term unemployed. Business executives, labor leaders and others set up Private Industry Councils in the local areas to work with CETA prime sponsors.

A number of other new features were added to CETA by the reauthorization. There was sharper targeting of assistance to the most disadvantaged persons. For example, there were special services for persons facing particular disadvantages in the labor market, such as divorced women facing the need for a job and older workers having serious problems finding suitable work. Greater emphasis was placed on training. For the first time, programs to help those thrown out of work by temporary downturns in the economy were tied to the national unemployment rate. Now the program could be expanded if the rate went up or decreased if it went down. Administrative and paperwork requirements were simplified and provisions governing fraud and abuse were strengthened.

To deal with the enduring social problem of youth unemployment the Youth Employment and Demonstration Projects Act was made law in 1977. There were four main components. Youth Community Conservation and Improvement Projects and Youth Employment and Training Programs involved neighborhoods, local community organizations and local labor unions in job creation and training. Youth Incentive Entitlement Pilot Projects tested a variety of new approaches to youth employment. Modeled on the Depression-era CCC, the Young Adult Conservation Corps provided disadvantaged youths with work on needed conservation projects on public lands and waters.

Another program to stimulate increased employment of the disadvantaged in the private sector was the Targeted Jobs Tax Credit. This allowed employers to claim tax credits for a limited period for hiring workers from selected groups of particularly needy persons. Groups targeted included disadvantaged youths, veterans, ex-offenders, handicapped persons and persons on welfare. The USES administered the Department's portion of the program.

In 1978 Congress passed and the President signed the Full Employment and Balanced Growth Act, better known as the Humphrey-Hawkins Act. Drafted with assistance from the Department, this law did not create any specific programs. Rather, it called for government-wide planning and action to achieve reduced unemployment and, eventually, zero inflation. This Act found strong expression in many aspects of the Department's employment and training program, including: targeting assistance to reduce long-term unemployment; improving coordination with private business; reducing youth unemployment, and; assisting adult workers dislocated because of foreign competition.

Occupational safety and health programs were significantly redirected during this period. Early on, the Secretary and the head of OSHA announced a policy of "common sense priorities" under which the agency would focus on serious dangers, simplify safety and health regulations, and help small businesses reduce occupational hazards. Enforcement became much stricter as inspectors cited more and more employers for "serious" and "willful" violations of standards and assessed heavier fines against them. A large body of safety regulations had been adopted en masse from private standards groups when OSHA started up. Under the "Standards Deletion Project" OSHA stripped them of unnecessary and irrelevant verbiage.

The common sense priorities received their most important expression in a strengthening of an emphasis begun during the previous Administration on health standards. Already under development was an innovative standard to deal with the category of cancer-causing, or carcinogenic, substances in a generic way, rather than substance by substance as before. After extensive public hearings resulting in more than a quarter of a million pages of testimony, OSHA issued its generic cancer policy in 1980. A number of individual health standards were also issued, including those for benzene, the pesticide DBCP, inorganic arsenic, cotton dust, acrylonitrile and lead. The lead standard was notable for including for the first time a provision protecting pay and job rights for any person removed from his or her normal job because of a health hazard.

The Department's job safety and health responsibilities expanded greatly in 1978 when, pursuant to an act of Congress, it established the Mine Safety and Health Administration. This function had rested primarily with the Department of the Interior since 1910. Since that Department was also responsible for promoting increased production in the nation's mines, a perception developed that this was inconsistent with the goal of promoting safety and health. Under pressure from the United Mine Workers and others Congress decided to transfer the safety and health function to the Department of Labor. In the process, the whole program of mine safety and health was reorganized and a stronger emphasis was placed on occupational health.

In the area of labor-management relations, the Department kept to its traditional policy of avoiding unnecessary intervention in disputes. However, it actively assisted labor and management groups interested in developing cooperative or tripartite approaches to non-"bread-and-butter" union issues, such as investment in new plant and equipment, environmental regulations, impact of deregulation, job safety and health, and absenteeism. After a costly strike in the coal industry, two White House commissions on the coal industry helped labor and management resolve some major issues. The result was a decline in wildcat strikes. Special committees in the auto, steel and airlines industries also sought, with varying success, to reduce labor-management tensions.

There were important actions along a number of other fronts. Once again, amendments to the FLSA raised the minimum wage, which rose by stages from $2.30 an hour for nonfarm workers to $3.35 an hour on January 1, 1981. Farm workers were covered for the first time. Enforcement of the ERISA pension law was improved when a presidential Executive Order eliminated confusion caused by overlapping jurisdictions between the Departments of Labor and the Treasury. To make enforcement of federal equal employment programs more effective, contract compliance functions enforced by 11 separate federal offices were brought together under the Department's OFCCP. The Women's Bureau was given special prominence when the Secretary elevated the Director's position so she reported directly to him. In 1978, like most other federal agencies, the Department established an Office of Inspector General to consolidate all audits and investigations into waste, fraud and abuse of federal resources. Because of American objections to certain activities of the International Labour Organization, the U.S. withdrew from the body in 1977. After the ILO eliminated the objectionable activities, the Department helped lay the groundwork for the return of the U.S. to the organization in 1980.

To strengthen the Department's capacity to analyze and evaluate complex issues and policies, its economic analysis functions were consolidated under the Assistant Secretary for Policy Evaluation and Review (ASPER). This agency, established permanently during the Nixon Administration, provided the knowledge base needed for the development and management of a wide range of Department programs. ASPER helped devise means of testing concepts and pilot projects in youth employment programs, welfare reform, economic adjustment and other areas. ASPER also helped developed Administration-wide economic policies on inflation, unemployment, productivity and other matters of national concern.

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