(Bloomberg News) Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., said the U.S. government must do more to support employment growth.

"We should not rely solely on job or corporate-direct payroll tax credits because corporations may not take enough of that bait," Gross wrote in a monthly investment outlook published on Pimco's website. "Government must step up to the plate, as it should have in early 2009."

The U.S. economy lost more than 8.7 million jobs since January 2008. The jobless rate hit a 26-year high of 10.1 percent in October 2009 and was 9.1 percent last month.

"Neither party has an awareness of the why or the wherefores of how to put America back to work again," Gross, 67, wrote. "It is becoming obvious that the 2012 election will be fought on a battlefield of job creation."

Nonfarm payrolls grew in May by 54,000, the smallest increase in eight months, after a gain of 232,000 in the previous month, the Labor Department reported June 3. The median forecast of 89 economists in a Bloomberg News survey was for an increase of 165,000.

"Our labor force is too expensive and poorly educated for today's marketplace," Gross wrote. "If we are to compete globally while maintaining a higher wage base, we must train for 'middle' in addition to 'high tech.' Philosophy, sociology and liberal arts agendas will no longer suffice. Skill-based education is a must, as is science and math."

New Normal

Under its so-called "new normal," philosophy, Newport Beach, California-based Pimco expects a shrinking global role for the U.S. economy following the 2008 financial crisis.

"The past several decades have witnessed an erosion of our manufacturing base in exchange for reliance on wealth creation via financial assets," Gross wrote. "Now as that road approaches a dead-end cul-de-sac via interest rates that can go no lower, we are left untrained, underinvested and over-indebted relative to our global competitors."

The Federal Reserve has left its target rate for overnight loans between banks at zero to 0.25 percent since December 2008.