The great American jobs machine is faltering, and it is time for Washington to pay attention. Participation in the workforce is falling, the pace of job creation is anemic, and long-term unemployment remains stubbornly high. Many newly created jobs pay less than those that disappeared during the Great Recession, so real wages are stagnating, and median household income is no higher than it was a quarter of a century ago.

Our condition looks no better when we compare ourselves to other nations. As my Brookings Institution colleague...