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Unemployment Is Still the Biggest Election Issue    By MORTIMER ZUCKERMAN

Fewer Americans are working today than in 2000, despite the fact that our labor force has grown by 11.4 million.


The assessment that the U.S. economy is "stuck in the mud," recently given to lawmakers by Federal Reserve Chairman Ben Bernanke, underscores again that there has been no recovery since the theoretical ending of the recession in June 2009. For the 80% of Americans born after World War II, this is their Great Depression.


The most recent signal of a weakening economy comes from the U.S. consumer, with the Commerce Department reporting last week that retail sales fell 0.5% in June, far below the expected 0.2% increase. A stunning 70% of U.S. retailers missed their sales targets in June, the third consecutive month that sales have weakened and the worst showing since November 2009.


What we're witnessing is the breakdown of the great American jobs machine. The official unemployment rate is 8.2%. But if you add to that the number of discouraged workers who have dropped out of the labor market since the recession began in early 2008—approximating eight million—the rate would be an alarming 12%. Fifty percent of the jobs created since the recession hit have been part time, with no benefits and a wage that's inadequate to enter the middle class. If you add the number of part-time workers into the mix, the unemployment rate climbs to 14.9%.


Fewer Americans are working today than in the year 2000, despite the fact that our population has since grown by 31 million and our labor force by 11.4 million.


The Obama campaign emphasizes that "for years before the economic crisis" middle-class security had been slipping away with stagnant wages and soaring health-care costs. Still, the record of the past four years is worrying.


Official unemployment under President Obama has averaged 8.8%, a record. Under George W. Bush, his predecessor, the jobless rate averaged 5.3% and was at 6.8% in the month his party lost the 2008 election. Job seekers are only one-third as likely to find a job as before Mr. Obama was elected.


Today, a record number of Americans have been out of work for more than six months, and a record number of households have at least one member looking for a job. To make matters worse, some employers are shortening the work week or asking employees to take unpaid leave, which doesn't show up in official unemployment numbers.


Many blue-collar workers and many in the middle class feel they are falling further and further behind no matter how hard they work. Millions of families are one layoff or one medical emergency away from going into bankruptcy. It is no wonder that the great American dream is no longer a house in the suburbs. It is now a secure job—any job.


Another depressant has been the drop—by more than 40%—of the average American family's net worth over the past five years. These are Depression-like statistics. Baby boomers in their 60s have seen the tragic collapse of their net worth. They've scaled down their expectations and their expenditures, particularly as they worry about their departure from the work force.


It takes time for a slump in household net worth to fully register, but it inevitably affects consumer spending patterns, as frugality becomes necessity. One reaction is to stop spending, as the retail figures reflect. Another is to get out of debt as fast as possible. The ratio of U.S. household debt-to-income, 134% in 2007, has dropped to a nine-year low of approximately 114% today.


Not surprisingly, Americans feel deflated by the numbers and the bleak small-business sentiment. According to a recent Gallup survey, 81% of Americans are dissatisfied with the nation as it is governed, and three quarters of people in a recent Rasmussen poll believed the country is on the wrong track.


The future of the unemployed is dubious, for when economic activity picks up, employers will first choose to increase hours for existing workers. Many unemployed workers looking for jobs once the recovery really begins will discover that jobs as good as the ones they lost are nearly impossible to find.


On top of that, the business community has been alienated since the Obama administration abandoned early efforts to build confidence and rally the national will. It engaged, instead, in demeaning the private sector.


Key question: How will we find a way to have at least 500,000 more hires per month than we are now seeing? This recession has shown employers that they can make do with fewer workers. According to a March 2011 Duke University/CFO Magazine Global Business Outlook Survey, more than 20% of U.S. companies say that the number of people they employ will never return to pre-recession levels. Just as serious is that most of the newly available jobs don't match the pay, the hours, or the benefits of the millions of positions that vanished during the recession.


Millions of Americans are facing a lost decade, living from paycheck to paycheck, struggling to pay their bills, having to borrow money, amid a frightening future and deepening anxiety. The journalist Doyle McManus got it right last year when he asked another key question: "Can the president persuade voters to let him keep his job when so many of them have lost theirs?"


Mr. Zuckerman is chairman and editor in chief of U.S. News & World Report.



Is this the biggest issue?