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OSEC Congressional Testimony

Statement of Secretary of Labor Robert B. Reich Hearing on H.R. 3315: An Alternative Approach to Fighting Crime before the Subcommittee on Crime of the House Judiciary Committee [02/22/94]

Mr. Chairman, thank you for the opportunity to submit a statement for the record. I wanted very much to testify here in person, but previously scheduled testimony in front of another Committee prevents me from doing so.

I commend you and the members of this Subcommittee for holding this hearing and for your work on the crime proposal sponsored by Congressman Washington and endorsed by the Congressional Black Caucus.

The battle against crime must be fought on several fronts. Those who commit crimes must be caught and punished; at the same time, however, the causes of criminal behavior also need to be addressed. As the President said in the State of the Union, youths must have "something to say yes to" or the battle against crime will not be won.

My statement focuses on the economic backdrop faced by today's disadvantaged youth and its relationship to crime. I will also examine the role of employment and training programs in reducing crime and recidivism.

The Backdrop

The economic and social well-being of disadvantaged American youths and young adults -- those with limited education or skills, from poor families and impoverished neighborhoods, and from minority backgrounds -- has deteriorated substantially over the last twenty years.

  • The real wages of the young and less-educated plummeted, breaking the historic pattern of rising earnings for American workers at all skill levels. In the early 1990s the real hourly pay of recent male high school graduates was more than 20 percent below that of recent graduates twenty years earlier; the decline in pay of young high school dropouts has been even more extreme.
  • The real wages and employment rates of young, less-educated males have fallen dramatically over the past quarter-century. This deterioration has been true for white and Hispanic males, but it has been even worse among black males.
  • More and more disadvantaged young men and young women are "idle," not in school, working, or looking for work. Approximately 50 percent of out-of-school young Americans (those age 16 to 24 years) without a high school degree are currently not employed. And more than 70 percent of young black high school dropouts are currently not employed. Many of these out-of-school youths are persistently out of work and have the potential for being permanently lost to the legitimate economy.
  • The proportion of young men in trouble with the law has increased dramatically. Almost 700,000 young men from 16 to 34 years of age were incarcerated in 1989. Richard Freeman of Harvard University estimates that approximately 50 percent of 18-34 year old, black male, high school dropouts had criminal records in the late 1980s. No other developed country faced such levels of crime among its youth.
  • The low incomes, high joblessness, and social pathologies cited above mean that many young Americans have problems obtaining the basic necessities. Even during the late 1980s boom, the number of homeless families headed by young women grew, while the weakened economy of the early 1990s increased the proportion of the young relying on food stamps and welfare.

Not every indicator of the lives of disadvantaged youths and young adults shows deterioration, but the overall picture is grim. A large proportion of the young women and young men who are the future of the country -- the workers of the 21st century -- are in trouble economically, socially, and, all too often, with the law.

A complex set of factors has contributed to the deteriorating economic position of young Americans from disadvantaged backgrounds. In part, the deterioration reflects the massive changes in the U.S. and global economy that have worsened the prospects for less-educated and less-skilled workers in the labor market. The days when high school dropouts or even high school graduates could expect to move directly into decent-paying factory jobs for life are over. Labor market prospects depend much more on problem solving skills and on one's ability to directly work with customers in the expanding service economy.

These labor market shifts have had a particularly adverse effect on disadvantaged young males. The shift in relative labor demand away from blue-collar work and away from less-educated workers has disproportionately affected young disadvantaged males. Slow economic growth and weak labor markets (relative to those of the 1950s and 1960s) throughout much of the last twenty years have further limited opportunities both in entry-level positions and for upward occupational mobility for disadvantaged young workers. Those in the inner city have been further hampered by a shift in employment opportunities into the suburbs.

Economic changes (especially labor demand shifts away from manufacturing and generally weak labor markets) may have helped trigger the downward cycle for disadvantaged youth, but the resultant joblessness has in turn contributed to social changes in urban communities (increases in crime, violence, and drug abuse; the lack of "middle class" role models; and breakdowns in the traditional family) that now make it very difficult to deal with the labor market problems in inner cities. This problem is not unique to U.S. urban areas. Persistent joblessness associated with industrial decline in the North of England appears to be connected to increased crime, drug use, and violence and a rapidly expanding "underclass" in formerly stable working class areas. Similar phenomena have been observed in the high unemployment parts of southern Spain and Italy.

A stronger economy, rapid private sector employment growth, and tighter labor markets are a necessary condition for improving job prospects for young black men and other disadvantaged groups in America's inner cities, but the extent of the problems and the experience of the boom of the late 1980s suggest economic growth by itself unassisted by policies designed to specifically deal with the problems of high poverty areas may not be sufficient to reverse recent trends. Extremely tight labor markets in the late l980s in places such as Boston and New Jersey temporarily improved employment prospects for disadvantaged workers, but did not make a substantial dent into reversing trends towards increasing violence, neighborhood disintegration, and persistent poverty. Economic reversal in the Northeast at the start of the 1990s reinvigorated a vicious downward trajectory.

Adverse economic shocks have disrupted the family and community institutions that have traditionally enabled disadvantaged youth to respond to improvements in legitimate economic activities. Youths in areas of concentrated poverty lack information about job market opportunities and lack networks through which they can gain referrals to an employer from someone trusted by the that employer. The problem of missing networks is especially important for young black males given the rising fraction of this group with criminal records. Incarceration and probation appear to have long-term adverse effects on the employment of young men. Unfortunately, even the labor market prospects of young black males without criminal records are hurt by the rising prevalence of criminal involvement since employers appear more reluctant to give them a chance.

Improving the Labor Market Prospects faced by the Disadvantaged

Besides macroeconomic policies that promote overall economic growth, sound policies of investments in communities, education, and training are also needed to improve economic and social conditions in high poverty areas. The Administration has undertaken this process with the Empowerment Zone initiative and has also proposed expanding the Job Corps. Furthermore, broader policies such as the school-to-work initiative, reform of student loans, and National Service potentially can play an important role in improving labor market prospects for disadvantaged individuals.

The School-to-Work Opportunities Act -- by developing a national framework for the development of a School-to-Work Opportunities system in every state to provide our non-college-bound youth with the academic and technical skills needed to obtain well-paying jobs -- is an especially important initiative for improving the prospects of disadvantaged youth. The continuing shift of labor demand toward the better-skilled means that opportunities for the disadvantaged to improve their skills are crucial to improving their labor market prospects.

The Job Corps. An analysis of the Job Corps program shows how a well-designed program for disadvantaged youth can improve their employment prospects.

As of 1993, Job Corps enrolls about 62,000 new youths a year, with total outlays of approximately $970 million. The full Job Corps training program usually takes a year or more, but because a third of enrollees drop out in the first 3 months the average stay is about 8 months. Over 80% of Job Corps enrollees are high school dropouts, and about three-quarters have never worked before coming to the Corps. The typical Job Corps student is an 18 year-old high school drop-out who reads at the 7th-grade level, comes from an economically disadvantaged family, belongs to a minority group, and has never held a full-time job.

Job Corps is a highly intensive, residential (`boarding-school' type) program. The array of services provided includes basic skills, vocational training, social skills training, career and drug abuse counseling, job search assistance and intensive follow-up services including job or apprenticeship placement.

To examine the effectiveness of the Corps, a 4 1/2 year study of over 5,000 youths was completed in the early 1980s which studied enrollees on 19771. The earnings, educational achievement, and criminal records of Job Corps graduates were compared to those of a demographically similar comparison group who had not enrolled in the Job Corps. These experiences were tracked for a period of four full years after graduation.

The evaluation found that Job Corps participation significantly increased earnings and educational attainment, while reducing welfare dependency and the incidence of serious crime among graduates. Specific findings included:

  • Earnings increases. Over the four years after graduating from the program, Corps enrollees earned on average of more than $600 more per year than comparison group members.
  • Increased educational achievement. While only about 5% of comparison group members attained high school diplomas or GEDs, over 25% of Corps enrollees did.
  • Increased employment and less welfare dependency. Corps enrollees were employed on average about 3 weeks more per year and annually received 2 weeks less welfare than comparison group members.
  • Declines in serious criminal offenses. Although Job Corps enrollment did not affect the overall arrest rate, it did reduce the incidence of felony crime among participants.
  • Savings for government. The intensive nature of the Job Corps program leads to high costs per participant, but the resulting benefits were estimated to exceed the costs. When such benefits as the value of output produced at Job Corps centers, reduced welfare costs, increased tax payments, and reduced costs of crime (especially while enrolled in job corps) are summed up, the benefit to society is greater than the costs of Job Corps training.

Other features of the Job Corps that are worth noting include:

  • The average cost a year to train and educate Job Corps participants is $22,000 -- which is less than the $30,000 average cost per year to incarcerate adult offenders.
  • As noted, Job Corps also provides for drug abuse counseling -- which is necessary since more than 80% of juvenile residents reported prior use of an illegal drug.

For these reasons, I strongly support the provision in H.R. 3351 that proposes that education and training be provided in alternative punishment arrangements for youth offenders, and that such features be modeled to the extent practicable after the Job Corps program. These reasons also help explain why the Administration has proposed a $117 million increase in the Job Corps program in FY 1995, a boost of 11 percent from the previous year.

Empowerment Zones and Youth Fair Chance: Models to build upon. The problems of disadvantaged youths also suggest that a targeted, intensive approach can prove effective. Such an approach -- incorporated into the Empowerment Zone initiative and the experimental Youth Fair Chance program -- may serve as the basis for turning neighborhoods around. The lessons to be applied are:

  1. Targeting programs directly on high-poverty areas. Government programs aimed at the poor typically are spread across the entire country, with no special targeting on areas of concentrated poverty. However, it is possible to use Census tract data to specifically target funds to high-poverty urban neighborhoods and rural areas. The new empowerment zone legislation does this, as does the Labor Department's Youth Fair Chance program. The importance of neighborhood spillover effects and peer influences strongly suggest that one may receive a greater "bang for the buck" by using concentrated investments that affect entire peer groups and have the possibility of really changing community norms towards work and family.
  2. The difficulty of effectively serving youth and the need for broad and intensive services. It is very difficult to turn around the lives of disadvantaged youth. It is possible that community-wide interventions -- such as empowerment zones, Youth Fair Chance -- could affect community values and peer pressure, and thus have a much larger impact on youth than typical job training programs that attempt to affect one youth at a time. Experiences with innovative programs suggest that intensive programs with broad ranges of services are most effective for youth. As noted, the youth program that appears to have the strongest positive effects, the Job Corps, is an intensive residential program that changes the youth's environment and provides basic skills training, occupational training, work experience, social skills training, and job placement services. Empowerment zones and Youth Fair Chance attempt to apply a comprehensive approach on a local or neighborhood basis.
Can Education and Training Lower Recidivism Rates?

Recidivism rates are very high among the prison population. An examination of the of the skill levels of offenders helps explain why.

  • About 60 percent of all offenders released from state prison are rearrested within 3 years.
  • A Justice Department survey of residents of long-term state operated juvenile institutions reported that approximately 4 out of 5 incarcerated juveniles had been previously on probation.
  • The National Council on Crime and Delinquency reviewed data collected in eight states and found that 50 to 70 percent of juvenile delinquents were rearrested within 12 months.
  • A 1983 Bureau of Justice Statistics report stated that recidivism rates were higher among men, blacks, Hispanics and persons who had not completed high school than among women, whites, non-Hispanics and high school graduates.
  • Studies show the average reading level of a juvenile offender is below the eighth grade.
  • The Justice Department survey of juvenile institutions found that one-quarter of youth aged 18 to 24 had less than an eighth grade education, and less than one-tenth had graduated from high school.

The above facts suggest that it is important that we examine the role that education, training, and employment programs for offenders could play in reducing crime and slowing the revolving door of prison recidivism. Currently, prisons do run a variety of education and training programs, ranging from adult basic education to work experience and job skills training. Current research suggests that when they are well implemented these programs reduced recidivism by a significant -- albeit modest -- degree.

A study of the Unicor work experience/job training program in Federal prisons found that participants had a significantly lower chance of recidivism within their first year out of prison (the likelihood decreased by two-fifths) and a greater likelihood of employment 7 to 12 months after release than a comparison group of prisoners with similar educational backgrounds, employment histories, and severity of offense who had not participated in Unicor.2 Some of these positive results probably stem from unobserved characteristics of the prisoners selected for Unicor, but the magnitude of the results and the careful matching of the comparison group makes it likely that Unicor has positive effects.

Even more convincing evidence of positive effects comes from a particularly thorough experimental evaluation of the effect of a state vocational training program on non-violent property offenders. The researchers found a significant decline in recidivism (about one-fifth) due to program participation. Finally, a study of adult basic education programs in Wisconsin estimated that successful completion of the program is associated with a 10% lower chance of recidivism. The program was determined to be cost-effective based on this reduction in recidivism.

It should be pointed out that many education and training programs for prisoners have been found to show no positive effects at all.3 In some cases, this is due to deficiencies in the studies. But it is also because the programs were subject to severe resource limitations and/or were poorly implemented. Overall, prisoners are a difficult population to influence, but the evidence shows that it is possible to do so.

Conclusion

The Administration has joined the battle against crime in several ways. We support strengthening police protection, tougher sentences as warranted, and sufficient funding of the criminal justice system. But we also know that the conditions that contribute to crime must be addressed. Accordingly, we have advanced a wide range of policies to improve the lot of the disadvantaged, and we recognize the important role that education and training approaches -- such as the Job Corps -- can have in reducing crime and recidivism.

Again, thank you for the opportunity to submit this statement. I look forward to working with you, your Subcommittee, and the sponsors of H.R. 3315 as the crime debate proceeds.

1 Charles Mallar et. al., "Third Follow-Up Report of the Evaluation of the Economic Impact of the Job Corps Program", Mathematica Policy Research, 1982.

2 Saylor, William G. and Gerald G. Gaes, PREP Study Links UNICOR Work Experience With Successful Post-Release Outcome, Federal Bureau of Prisons, Office of Research and Evaluation, January 1992.

3 See Sechrest, L. and R. Redner, eds. The Rehabilitation of Criminal Offenders: Problems and Prospects. Washington, D.C., National Academy of Sciences, 1979.

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