The moral and ethical values enunciated by America's leading religious organizations lay much of the groundwork for its major democratic institutions and establish the benchmarks by which U.S. employment conditions and policies should be measured. The public's perception of the economy's relative well-being is based on oversimplified statistical indicators, and policymakers' and academicians' analysis of the employment situation is based on complex and not-easily-understood indicators. Both groups risk losing sight of the human dimensions of the problems of joblessness and underemployment. Labor market developments in 1986 provided only slight improvements in employment and income for American workers. Unemployment is still high, real wages have fallen, and underemployment has expanded. This labor market deterioration has led to increased poverty and a shrinking middle class. Americans are facing not only the prospect of protracted joblessness but also a deterioration of the type of jobs that are available. The proportion of jobs in the service sector is becoming increasingly unbalanced, and the highest-paid sectors of the economy are undergoing a relative contraction. The result has been a surplus of part-time jobs and lower wages. Despite increasing attention to the problems of job quality, worker dislocation, the increase in poverty-stricken families and the shrinking of the middle class, policymakers need to do far more to achieve improvement in these areas. (MN)