Mort Zuckerman: Under Obama, the New American Dream Is a Job

President Obama is paying the price for our disappointing recovery.

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There's not much to cheer in our scrappy election campaign. We hear that more than 4.4 million private sector jobs have been added in 28 straight months of job growth, and that the president is taking "aggressive steps to put Americans back to work." The happy talk invites a slogan from the 1984 election: "Where's the beef?"

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

The most dismaying signal of a weakening economy came from the American consumer, as retail sales fell a stunning 0.5 percent in June, far below the expectation for a 0.2 percent increase. An astounding 70 percent of retailers missed their sales targets in June, reflecting the most difficult month since November 2009. The retail weakness was broad-based, and indicators were down dramatically from the first quarter, as June represented the third month in a row that retail sales have weakened. In the past when retail sales were down three consecutive months, it was a signal of an oncoming recession. The result is that the underlying trend in GDP growth is barely above 1 percent.

[See a collection of political cartoons on the economy.]

What we have been living through is a breakdown of the great American jobs machine. Jobs have long been the best social program, the best economic program, and the best family program in America. No longer. The jobs are not there. Unemployment today is the worst since the Great Depression.

The unemployment statistics may be mind-numbing in the effort to portray the complexities of the national picture beyond the simple—and misleading—routine headline figures. It is very important, however, that we should understand just where we are and what the figures tell us about where we are heading. The headline unemployment number focused on by the media is 8.2 percent, but that's not the real number. If you add to the headline number the "discouraged workers" not currently looking for a job, and others "marginally attached" to the labor force, the unemployment rate would be almost 10 percent. And if you add involuntary part-time workers to the headline number, the real unemployment rate would be 14.9 percent. Fifty percent of the jobs created since the recession have been part time, which generally means that these workers receive no benefits and that their pay is inadequate to enter the middle class.

All the net jobs created during the Obama administration have been part-time jobs. An estimated 35 million Americans are trapped in jobs they would have left in better times. Fewer Americans are working today than in the year 2000, despite the fact that our population has grown by 31 million and our labor force by 11.4 million since then.

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The Obama campaign emphasizes that "for years before the economic crisis," middle-class security had been slipping away because of stagnant wages and soaring healthcare costs. It's true that even before the start of the Iraq war in 2003 we had problems (education and fiscal control), but the record of the last four years is worrying. The unemployment rate under President Obama has averaged over 9 percent. Under George W. Bush, his predecessor, the jobless rate averaged 5.3 percent and was at 6.8 percent in the month his party lost the 2008 election. Job seekers are only one third as likely to find a job as before Obama was elected. A record number have been out of work for over six months. Hiring plans have sunk to the lowest reading since the third quarter of 2009, and only 26 percent of American companies plan to boost their compensation, the lowest since the depth of the last recession, as reported by David Rosenberg, chief economist of Gluskin Sheff.

Today a record number of households have at least one member looking for a job. The average private sector workweek is 34.5 hours. If not for the relatively short workweek, the jobless rate would be even higher. Another pattern that has emerged is that companies are asking employees to take unpaid leave, and this doesn't count toward the unemployment rates.