There's been much commentary of late about U.S. businesses sitting on some $1.8 trillion in cash while job creation lags, unemployment remains high and median wages have remained largely stagnant. But the fact is that this disconnect has been with us for a while, and it's not only threatening American competitiveness, it's threatening our mental and physical health.

Even as companies like Apple, Intel and Hewlett-Packard see their profits soar, high-tech jobs lag. In a recent BusinessWeek essay, Andy Grove, former Intel co-founder and chief executive, noted that there are now fewer jobs in the computer industry than there were more than 30 years ago. The manufacturing industry, meanwhile, lost 3.6 million jobs from 2000 to 2008, proving that we don't just have jobless recoveries-we have now have largely jobless booms as well.

Most of the job growth in the last decade or so has come from government, which accounted for about a quarter of all new jobs created. Education and health services-mostly funded directly or indirectly through the government-accounted for more than half of all the new jobs. But with federal, state and local governments staring at enormous deficits, hiring in those sectors has slowed considerably.

Other industrialized countries can teach us some important lessons. One is that a country's competitiveness does not depend on low labor rates, low levels of unionization, and a labor market that leaves people completely at the mercy of company decisions. The Economist is scarcely a left-wing rag, but its listing of the most competitive economies typically includes Denmark, Finland, the Netherlands, Singapore, Switzerland, and Germany. Similar countries rank high on the World Economic Forum's list. Germany, for instance, is an export powerhouse with a trade surplus-even though it has high wages, a worker codetermination law that gives employees corporate governance rights, high levels of unionization, and benign working conditions.

A second lesson is that if we want a healthy job market, labor market conditions need to be an explicit focus of public policy. France and some other nations have begun to focus on the happiness levels of society, and the United Kingdom years ago appointed a commission to examine inequalities in health and the connection to conditions of people's work. Singapore has steadily raised its minimum wage, believing that companies that don't offer a decent standard of living to their employees don't really benefit society anyway. Lots of people tell me we have nothing to learn from Singapore-it's too small. Tell that to China, which has explicitly modeled much of its economic development strategy on Singapore and thinks it has a lot to learn from one of the world's most successful economies.

In this country, though, companies will win kudos from investors-and the business press-for slashing jobs and keeping wages down. What they often fail to consider is that people who get laid off are six times as likely to engage in workplace violence and, according to one study, face 44 percent higher odds of dying in the following four years. Unemployment is emotionally stressful, with studies demonstrating that being out of work leads to suicide, depression, alcoholism, smoking, and other unhealthy behaviors. One reason why the U.S. has higher per capita health care costs than other industrialized countries without correspondingly better health outcomes could be the conditions characterizing the U.S. labor market-growing wage inequality, job instability and economic insecurity.

Fortunately, progress is being made. Officials in Richmond, Calif., recently decided to make the health status of its residents an explicit indicator of how well the city is faring. Investigating the causes of inequality in health status, and then formulating policies to improve the health of all people, could fundamentally alter the way governments make decisions on issues ranging from public expenditures to zoning. And it could lead to companies doing "environmental impact" reports before laying off scores of workers.

Nobel Prize-winning economist Amartya Sen once said that "the success of an economy and of a society cannot be separated from the lives that members of the society are able to lead." Policy- makers should take this to heart. Economic health should be measured not just by GDP growth and corporate profit, but also by standards of living, job satisfaction and workforce health.

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