This Labor Day, job market statistics tell two very different stories, depending on whom you ask.

The American worker's lot is the worst in a generation, labor economists say. They point to eroding health benefits, sluggish wage growth and millions of families mired in poverty.

No, say business advocates -- the labor market is on the cusp of an upswing. They cite the 5.5 percent unemployment rate, gains in productivity and growth in disposable income.

In the end, the assessment may be qualitative: How secure do workers feel?

"A large share of American workers feel precariously perched," said Lori Kletzer, professor of economics at the University of California, Santa Cruz, and a senior fellow at the Institute for International Economics. "Even though the labor market is healthier now than it has been in the recent past, it still is not that healthy."

By comparison, productivity and living standards in Europe are catching up to those in the United States, despite the shorter European workweek. And economists predict that workers in developing countries will continue to leach middle-class jobs from Americans, increasing the disparity between this country's rich and poor.

Countering this grim scenario are optimists emphasizing how far the United States has come out of the last recession.

"Over the past year we've created 1.5 million jobs, so we are well on our way to recovery," said Diana Furchtgott-Roth, chief economist for the Labor Department.

The Bush administration's tax cuts, several business advocates say, gave workers more money to spend. Real disposable income reached an annual $27,151 per person in the second quarter of 2004, up from $25,450 in the second quarter of 2001, according to the Bureau of Economic Analysis.

Worker productivity also continues to climb, a trend that will eventually lead to more jobs and rising wages, said Bill Conerly, an economist in Portland, Ore., and a senior fellow with the National Center for Policy Analysis, a think tank with a free-market perspective.

"The long-run trend is very, very positive," Conerly said. "When productivity growth is weak, it's hard to fix."

Still, other countries are challenging the United States on this front. Seven nations -- France, Germany, Italy, Belgium, Ireland, the Netherlands and Norway -- posted higher per-person gross domestic products in 2002, according to data in The State of Working America, a new book by the Economic Policy Institute, a liberal research group specializing in workplace issues.

Americans earn more annually because they spend more time at work. In 2003, the United States logged an average 1,792 hours per person, greater than France's 1,453, Germany's 1,446, Italy's 1,591 and the United Kingdom's 1,673, according to the Organisation for Economic Co-operation and Development.

Moreover, the pay gap between chief executives and employees is greater here than in Australia, Canada, Japan, New Zealand, the United Kingdom and eight other nations, all in Europe, said Lawrence Mishel, Economic Policy Institute president and a co-author of The State of Working America. The book reports that U.S. CEOs received three times the average CEO compensation in those 13 other countries.

"We have the most unequal distribution of income and wealth of any developed country in the world," said Ron Blackwell, an economist with the AFL-CIO, which represents more than 13 million union members.

European workers also have better health care and unemployment benefits, said Timothy Smeeding, professor of economics at Syracuse University's Maxwell School of Citizenship and Public Affairs. Conerly points out that this is one reason people stay unemployed longer in Europe.

Last year, 45 million Americans lacked health insurance, 1.4 million more than in 2002, the Census Bureau reported in August. Over the same period, the poverty rate rose to 12.5 percent from 12.1 percent, the bureau said.

But job growth, while sluggish, has turned a corner.

The Bureau of Labor Statistics says that businesses reported 131.3 million payroll positions in July, 1.2 million fewer than the high point in March 2001, but 1.5 million more than the low point in August 2003.

Chief executive officers expect to increase hiring and spend more on capital improvements in the next six months, according to a Business Roundtable survey released Wednesday.

"CEOs are optimistic about business conditions," Hank McKinnell, the roundtable's chairman and CEO of Pfizer, said in a statement. "While the economy has not yet reached its full potential, the fundamentals are still solid."

Manufacturers will probably hire 350,000 workers in the next year, with overall employment increasing by 2.3 million, the National Association of Manufacturers says.

The loss of jobs to countries like India and China creates a hollow in the labor market in the $20,000- to $30,000 annual-salary range, typically routine work that doesn't require face-to-face contact, said Frank Levy, professor of urban economics at the Massachusetts Institute of Technology and co-author of The New Division of Labor.

"The structure of jobs is changing moderately fast," Levy said. "You're seeing jobs created for educated workers -- people with college-level education or specific blue-collar skills -- and then you're seeing jobs created at the bottom: service jobs, security guards."

American workers must continually improve their skills to adapt to jobs moving overseas, said Tim Kane, an economist at the conservative Heritage Foundation in Washington.