Under some circumstances, a decline in the unemployment rate from 9.7 percent to 9.5 percent would be welcome news. But the Labor Department's jobs report for June showed the labor force shrinking by 652,000 workers, as discouraged workers left the labor force.

Labor's broadest measure of unemployment, which includes discouraged workers, is 16.5 percent. The percentage of Americans who participate in the labor force, now 64.7 percent, has declined to levels of the summer of 1985, midway through the decade when women moved into the labor force in record numbers.

This decline was concentrated among low-skilled adults, those without a high school diploma, who are having the hardest time finding work with the higher minimum wage and future requirements for employers to provide health care.

June's increase in private sector job creation of only 83,000 jobs does not spell "Recovery Summer," promised by the administration last month. It's natural that employers are afraid to hire, because their taxes will go up on Jan. 1, 2011; their energy bills will rise if Congress passes President Obama's requested cap-and-trade legislation; their ability to borrow will decline if the financial regulation bill is signed into law; and, if they have a work force of more than 50, they will face a $2,000 penalty per worker if they don't provide the right kind of health insurance.

For a real Recovery Summer, Congress and the president need a different agenda -- lower taxes, lower spending and less regulatory red tape.

Examiner Columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.