By Katherine Reynolds Lewis
FORTUNE -- When looking over the past year's data points and news developments on American workers, the question comes to mind: "Can't we do better than this?" Across the income spectrum, there's a sense of an unmet promise in the current economic recovery.
The situation has dramatically improved from the depths of the Great Recession, when unemployment peaked at 10% in October 2009. It was at 7.4% in July. Economic growth has picked up to an annual rate of 2.5%, and job openings are starting to materialize.
But the workers who have emerged from the recent rough economy are more weary and skeptical than before the financial crisis. Every economic cycle that rebounds with more bounce in corporate profits than new jobs further erodes the sense of fairness and opportunity in the U.S. economy. A few key indicators give even the more optimistic prognosticators cause to hesitate before celebrating the end of the recession.
The unemployment rate has fallen over the past three years, and jobless claims are also down, generally a positive trend for American labor. But one reason for the drop is the increase in discouraged workers, those who aren't counted as unemployed in the official statistics because they've given up looking for work. The drop in workforce participation from a reliable 66% before the recession to 63.4% in July demonstrates how many job seekers have simply stopped believing they can ever find a new position. A whopping 10.8 million people have dropped out of the labor force since the third quarter of 2008. It's disturbing to see just how many Americans have lost faith in their economic prospects.
Moreover, there has been no sustained improvement in the "hires rate," the share of total employment due to new hires, in the past two years, and little progress since the beginning of the recession, according to an analysis by the Economic Policy Institute. That means that the bulk of hiring have simply been replacements for workers who have departed an organization, known as churn, rather than adding net jobs to the economy. Moreover, the new positions that companies do create often are contingent, or without full benefits.
Of course, the definition of a "better" job depends on whom you ask. For many advanced-degree holding professionals who enjoy rosier prospects, a better job means decent pay, benefits, stability, and the possibility of a full personal life that isn't crowded out by employer demands. The typical workweek for a middle-income family was 11 hours longer in 2006 than in 1979.
The past year has been grim for highly credentialed workers as well. When we observed Labor Day last year, Princeton professor Anne-Marie Slaughter had just published a cover story in The Atlantic that focused on whether women could "have it all" had resuscitated a national conversation about workplace flexibility and job satisfaction that fell dormant during the recession. The country seemed poised to embrace the idea that high-powered career women -- and men -- deserved to pursue a fulfilling, ambitious career while cultivating a meaningful personal life. The success of Sheryl Sandberg's book Lean In -- a call-to-arms for ambitious women everywhere -- shows the enduring appeal of this dream.
Then came decisions by Yahoo (YHOO) in February and Best Buy (BBY) in March to pull back from telecommuting and results-focused management, ostensibly in the name of innovation and productivity. Both moves signaled a lack of confidence in how the companies' workforces would perform without a boss nearby and a rollback in the adoption of flexible work. They prompted managers and employers across the country to proclaim their frustration with telework and the challenge of supervising individuals remotely or inspiring a team spread across a diverse geography.
But ultimately, these moves are an abdication of management responsibility. The most important functions of a manager are to assign work, set reasonable deadlines, and evaluate work product based on merit and pre-determined goals, rather than relying on face time or gut feelings to decide which employees are pulling their weight. You can't command innovation by sticking a bunch of employees in a room together any more than you can know that people are working by seeing them at their desks. If most productive work now occurs -- or at least originates -- in employees' brains, how can we truly know when someone is working?
The retrenchment by Yahoo and Best Buy also is an insulting and short-sighted refusal to accommodate employees' need for flexibility, whether that's to care for young children, a pet, or aging relatives, or any other life needs, from meeting the cable guy, to pursing a meaningful volunteer role. We've come a long way from the days when you could count on a substantial pension and health care throughout your retirement after working for a single, solid employer for 20 or 30 years. That made it worthwhile for a generation of company men to sacrifice a home life.
Until there's a new workplace bargain to replace this deal, we'll continue to see job churn as talented employees wring what they can from their current position and jump to the next, more promising one. Until more talented managers develop strategies to assess employees' work and hold them accountable to reasonable standards, there will be too many falling back on face time -- and wishing for the days when you could easily measure a worker's productivity by counting how many cars or cereal boxes or widgets rolled off the assembly line.
It's as if employers and workers are middle-school kids on opposite sides of the gym, each waiting for the other to make the first move and ask for a dance. The problem is that, like children on the cusp of adolescence, we're in the middle of a transition from one kind of economy to something completely different, and our management structures haven't adapted.
While many employers do support flexible work and even four-day workweeks, there are far too many that don't trust workers to innovate or perform without micromanagement. Until corporations commit to providing better jobs, in all senses of the word, this standoff will not budge.
Editor's note: This article has been updated to reflect that second quarter annualized economic growth estimates were recently revised to 2.5% from 1.7%.
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