Mort Zuckerman: Welcome to the Modern-Day Depression

We need to recover from the recovery.

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How do you recover from a recovery? Just how bust the nation's "recovery" has been is painfully documented in the latest news, just two months before the election. The Census Bureau validated what middle-class Americans know all too well from their week to week, month to month struggle to make ends meet. The typical family is back to where it was in 1995. The analysis of annual data collected by the bureau indicates that median income in 2011 had fallen to $50,054, the fourth straight year of decline in well-being, and that's adjusted for inflation. In political terms, the Obama administration can truthfully say that the erosion had begun before the president took office, while Mitt Romney can point out that the administration spent four years of fumbling and quite failed to stop the rot.

At the same time we were clobbered by the Census numbers, the latest unemployment report landed with a dull thud: The advance figure for unemployment claims for the week ending September 8 was 382,000, up from the previous week's revised figure of 367,000. The four-week moving average was 375,000, up 3,250 from the prior week's average of 371,750.

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These are marginal negative movements, but they underline that the recovery touted by the administration has been the weakest in modern history. Nobody is entitled to blow a trumpet because the unemployment rate for August can be headlined at 8.1 percent, down two digits from July's 8.3 percent. That's a drop brought about not by more jobs but because 360,000 people left the workforce. It muffles the fact that 5 million people have now been out of work for 27 weeks or more. That's roughly 40 percent of the unemployed. Another 2.6 million people were marginally attached to the labor force, and over eight million people have given up looking for a job, so they are not counted because they had not searched for work in the prior month.

Are they lazy good-for-nothings? Maybe a handful, but most are decent Americans eager to work. The average period of unemployment is close to 40 weeks. Imagine the sense of futility that must overcome people who month after month fill in forms, go for interviews if they're lucky, and end up as they started—with nothing to show because there are approximately 4.5 unemployed workers for every job. Fewer Americans are at work today than in April 2000, even though the population has grown by 30 million people since then. Think about that.

A reality check is offered by the unemployment numbers the government calls U-6. It measures people who have applied for a job in the last six months and also includes people who are involuntary part-time workers—government-speak for people whose jobs have been cut back to two or three days a week or who are working part-time because they have been unable to find a full-time job. That number is almost 15 percent. Include the eight million people who have simply given up looking for a job and the real unemployment rate is closer to 18 or 19 percent. These are the brutal facts behind the Census report on median income. It is no surprise when annual wage increases have dropped to an average of 1.6 percent, the lowest in the past 30 years.

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There are other distressing aspects in the numbers. For example, older people are not leaving the workforce at the same rate as in the past. Instead, they are seeking to bolster their savings as an antidote to the stomach-churning decline in their net worth, 75 percent of which has come from the decline in the value of their home equity. They hope to retire with dignity but now are willing to do that at an even later date. Ironically, since the recession began, employment in the age group of 55 and older is up 3.9 million, even as total employment is down by five million.

The so-called quit rate has sagged to the lowest rate in years. Quite simply, the baby boomer population is delaying its exit from the workforce and thus creating a huge bottleneck in terms of youth unemployment. Prospects for older people out of work, however, have sharply deteriorated, especially for those who have been unemployed for any length of time. Dean Baker of the Center for Economic and Policy Research and Kevin Hassett of the American Enterprise Institute wrote recently in the New York Times that a worker between the ages of 50 and 61 who has been unemployed for over a year has only a nine percent chance of finding a job in the next three months. A worker who is 62 or older and similarly unemployed has about a six percent chance.