calculating the unemployment rate - minnesota council · pdf filelesson plan prepared for the...

Calculating the Unemployment Rate

Lesson plan prepared for the MCEE Preparing to Teach

High School Economics course

Grade Level: 11-12

Kyle Bergem

Pine River-Backus High School

June, 2014

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Lesson Title: Calculating the Unemployment Rate

Grade Level: 11-12

Time Required: 40-50 minutes

Teacher: Kyle Bergem

School: Pine River-Backus High School

INNOVATION

This lesson plan is an extension to the “Types of Unemployment” activity that was included as part of

the MCEE Preparing to Teach High School Economics course materials. The “Types of Unemployment”

activity consisted of having students classify unemployment situations by type of unemployment (i.e.

structural, cyclical, or frictional). This revision adds student engagement by having students group

together into three groups: students who are employed, students who are unemployed, and students

who are not counted in the total workforce (i.e those who choose not to work). The groupings add a

visual element to the lesson to aid in teaching how to calculate the unemployment rate.

OVERVIEW

This lesson introduces students to the three main types of unemployment: structural, frictional, and

cyclical. Students are also introduced to the mathematical formula used to calculate the unemployment

rate. Students will evaluate situations (see situation cards provided with this lesson) to determine if a

card is an example of unemployment. Next, students learn how to calculating the unemployment rate

after determining how many unemployed workers exists, and determining the total workforce. Further

discussion will highlight the problem with the unemployment rate not taking into account for workers

who are underemployed and who are underworked.

Pine River-Backus High School has approximately 50-60 students per grade level. Our district has

approximately 60% of our families qualifying as low-income for the free/reduced lunch program.

Economics is offered as a high school course to juniors and seniors. Students who qualify can opt to take

the course as a College in the Schools course earning college credit through Central Lakes College in

Brainerd, MN.

LEARNING OBJECTIVES

Define and classify the three main types of unemployment: structural, cyclical, and frictional.

Identify situations not considered to be unemployment.

Identify who is to be included/not included in the total workforce.

Calculate the unemployment rate.

Explain what the unemployment rate tells us.

ECONOMICS CONCEPTS EXPLICITLY COVERED

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Structural unemployment.

Frictional unemployment

Cyclical unemployment

Underemployment

Total workforce

Unemployment rate

MN ECONOMIC STANDARDS

Grades: 9, 10, 11, 12

Substrand: 5. Macroeconomic Concepts

Standard: 9. Economic performance (the performance of an economy toward meeting its goals) can

be measured, and is affected by, various long-term factors.

Code: 9.2.5.9.3

Benchmark: Measure full employment in terms of the unemployment rate and various types of

unemployment; analyze past and recent data to describe factors that impact the long-run

growth of jobs in an economy.

For example: Types of unemployment—frictional, structural, cyclical, seasonal; Factors

demographics, immigration, growth of output.

MATERIALS NEEDED

Visual 1 to be displayed for class to view.



Situation Cards—Student Version. Cut out situation cards (30 pre-made cards). (1 card for each student)

Situation Cards—Teacher Version (Answer Key).

Each student should receive a situation card. Unemployment examples should be distributed first.

Additional employment example cards can be made for classes larger than 30 students, so that all

students can be included in the activity.

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LESSON PROCEDURES

Step 1: Introduce the three major types of unemployment as a class discussion. An example is provided

for each type of unemployment.

3 Major Types of Unemployment (Show students Visual 1):

Structural Unemployment: Occurs when changes in demand in an economy leads to an increased need

for particular skills and abilities from workers, and causes other skills and abilities to become unneeded

or obsolete. Structural unemployment occurs when automation replaces physical labor. For example,

many large companies have eliminated in-person travelling salespeople as a result of increased

customer contact using technology (i.e. social networking, on-line selling, live web conferencing,

utilization of call centers for customer service, etc...). A laid off travelling salesperson would be an

example of structural unemployment.

Frictional Unemployment: Occurs when a person chooses to leave their present job to find another job,

or is searching for a job for the first time, or is searching for a job following a period of not being in the

workforce. For example, frictional employment exists when a student graduates from college with an

accounting degree, and begins searching for a job with a major accounting firm.

Cyclical Unemployment: Occurs when market demand for a certain goods or services decreases, and

results in decreased production until market demand increases. This causes fewer workers to be needed

to produce a good or service until demand increases. For example, cyclical unemployment occurs during

a recession consumers when consumers pull back on purchasing boats. In this case, a boat manufacturer

likely will lay off workers. The laid off workers would be classified under cyclical unemployment.

Step 2: Introduce the mathematical formula used to calculate the unemployment rate.

How to Calculate Unemployment:

Unemployment Rate = Total Unemployed Workers / Total Workforce

Total Unemployed Workers: People who are not working, and are actively looking for a job.

Total Workforce: All people who are either looking for work or who are working in an economy.

Not Included: People who give up looking for a job, people who choose not to work, people who are full-

time students, people who are disabled, people who are under age 16 people who are serving in the

armed forces people who are institutionalized, as well as people who are incarcerated.

Step 3: Distribute a Situation Card to each student. Be sure to hand out the cards that describe an

unemployed worker situation (Situation cards #1-8). Additional students will receive a card that

describes an employed situation. It does not matter how many employment cards are issued, but it is

important to use each of the unemployment situation cards.

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Step 4: Direct students to form into the following five groups: Structurally Unemployed, Frictionally

Unemployed, Cyclically Unemployed, Employed, Not in the Workforce. Assign each group to stand in a

different part of the classroom to make the groupings more obvious to the class.

Step 5: Ask each student to read their card to the class. The class should verify proper classification. The

teacher should correct any errors (See Situation Cards—Teacher Version).

Step 6: Students will need to remain in their groups in order to count the number people in each group.

Lead the class with calculating your class’ unemployment rate using the formula previously discussed.

Record the results for the full class to be able to view. Begin with determining the number of students

who qualify as an unemployed worker. Next, determine the total workforce. The total workforce is

determined by counting the total students who are either currently working, or are trying to find work.

Be sure to remove students whose situation cards express the person is choosing not to work as these

people are not part of the workforce (Situation Card #9-11).

For example:

8 students have unemployed situation cards—Situation cards #1-8

27 students have situation cards that qualify to be part of the total workforce—Situation cards #12-30

(3 cards express willfully not working—Situation cards #9-11)

8 / 27 = 29.6% unemployment rate for the classroom economy

Adjust the calculation to match the number of students you use in the activity.

Step 7: Point out that the unemployment rate tells us the percentage of those in our classroom

economy who don’t have a job and would like a job. Also, point out that two students have situation

cards that explain the worker is qualified for a better job, and the unemployment rate does not reflect

workers that are underemployed by their skills and abilities, or workers that are not working the number

of hours they would like to work.

Step 8: Show to class Visual 3: U.S. Unemployment Rate—10 Year Rage 2004-2014. Use Visual 3 to show

actual unemployment rates from 2004-2014. Point out the peak during 2009-2010 during the height of

the recession during that time period.

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EVALUATION

Lesson Plan Reflection:

This lesson plan was used with thirty 12th grade students. The activity worked well. Student quickly

understood the groupings by unemployment type. When a student was unsure about their Situation

Card classification, other students in the class were able to correctly assist. Students were engaged

throughout the full activity. Positive feedback was received by students who shared they found it helpful

to do the calculation together as a class, rather than having them do the calculation on their own.

Students were able to recall the information when working on subsequent assignments.

Students did want more information relating to Visual 3: U.S. Unemployment Rate—10 Year Range

2004-2014. Questions were asked about what specific events may have happened during years plotted

on the chart to cause the unemployment rate to rise and fall. The questions asked lead to discussions

beyond the scope of this lesson activity. It would be best to use another lesson plan that focuses on

unemployment rate trends. I do plan on using this lesson with future classes.

Following the activity, ask the students the following questions:

1. Provide an unemployment situation that would be an example of structural unemployment.

(Students should provide an example that illustrates when changes in demand in an economy

leads to an increased need for particular skills and abilities from workers, and causes other skills

and abilities to become unneeded or obsolete. An example of this is when automation replaces

physical labor.)

2. Provide an unemployment situation that would be an example of frictional unemployment.

(Students should provide an example that illustrates when a person chooses to leave their

present job to find another job, or is searching for a job for the first time, or is searching for a job

following a period of not being in the workforce.)

3. Provide an unemployment situation that would be an example of cyclical unemployment.

(Students should provide an example that illustrates when market demand for a certain goods or

services decreases, and results in decreased production until market demand increases. This

causes fewer workers to be needed to produce a good or service until demand increases. An

example of this is when during a recession consumers pull back on major purchases like cars,

boats, or homes.)

4. Provide an example of a person who is not working that would not be considered an

unemployment situation.

(Students should provide an example that illustrates a discouraged worker, or a worker that

otherwise chooses not to be employed.)

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5. What groups are counted in the total workforce?

(Students should state: the total workforce includes all workers classified as unemployed and all

workers who are presently employed)

6. What does the unemployment rate tell us?

(Students should state: the unemployment rate tells us the percentage of workers who are not

working that want a job.)

7. Explain one problem with the unemployment rate.

(Students can choose from: the unemployment rate does not include people who are discouraged

and have given up searching for a job, the unemployment rate does not include workers who are

underemployed based on qualifications or the amount they want to be working).

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Situation Cards—Student Version

Situation #1 You lost your job as a newspaper printing press operator since the newspaper you

worked for went to an “online-only” format. You are applying to get hired by a competing

newspaper.

Situation #2 You lost your job as a cashier at a store

because the store you worked at has installed self-checkouts. Each day you are checking

online for help wanted ads to work at another store.

Situation #3 You lost your job as a sales representative because the company you worked for is no

longer using travelling sales representatives. You are hoping to get hired by a company

your friend works for, so you will be able to travel together.

Situation #4 After taking some time off from work to take care of your family, you are now looking for a

job.

Situation #5 You just had a big disagreement with your

boss, so you decide to quit and look for a new job.

Situation #6 Congratulations! You just graduated college,

now you are sending out resumes and applications to start your new career.

Situation #7 You lost your job at a window factory due to a decrease in new home construction. You

are looking for a new job.

Situation #8 You lost your job at as a road construction worker due to local governments cutting

spending on building new roads. You have an interview next week for a new job.

Situation #9 You lost your job due to corporate

downsizing. You decide to go back to college to train for a career change.

Situation #10 You lost your job, but your spouse can

support your family so you decide to be a stay home parent to save money by not

having to pay for child care.

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Situation #11 You lost your job because the store you worked at went out of business. You are

enjoying the extra time you have, and you are too busy hanging out with your friends to

apply for a new job.

Situation #12 You work at a local ice cream shop.

Situation #13 You stock shelves at a grocery store, even

though you have a business degree.

Situation #14 You are a night manager at a convenience store, even though you have a degree in

journalism.

Situation #15 You are a cashier at a clothing store.

Situation #16 You are a server at a high end restaurant.

Situation #17 You are a cook at a popular restaurant.

Situation #18 You are working as an intern at a public

library.

Situation #19 You are a ride operator at an amusement

park.

Situation #20 You are a manager at a sporting goods store.

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Situation #21 You are a nurse at a clinic.

Situation #22 You are a police officer in a small town.

Situation #23 You are a pilot for a major airline.

Situation #24 You are a sales rep for a pharmaceutical

company.

Situation #25 You run your own business.

Situation #26 You are a salesperson for a car dealership.

Situation #27 You are a trainer for a software company.

Situation #28 You are a web designer for a global company.

Situation #29 You are a security officer at a sports stadium.

Situation #30 You are an accountant working for a large

firm.

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Situation Cards—Teacher Version (Answer Key)

Situation #1 You lost your job as a newspaper printing press

operator since the newspaper you worked for went to an “online-only” format. You are applying to get hired

by a competing newspaper.

Structural Unemployment

Situation #2 You lost your job as a cashier at a store because the

store you worked at has installed self-checkouts. Each day you are checking online for help wanted ads to

work at another store.


Situation #3 You lost your job as a sales representative because the company you worked for is no longer using travelling

sales representatives. You are hoping to get hired by a company your friend works for, so you will be able to

travel together.


Situation #4 After taking some time off from work to take care of

your family, you are now looking for a job.

Frictional Unemployment

Situation #5 You just had a big disagreement with your boss, so you

decide to quit and look for a new job.


Situation #6 Congratulations! You just graduated college, now you are sending out resumes and applications to start your

new career.


Situation #7 You lost your job at a window factory due to a

decrease in new home construction. You are looking for a new job.

Cyclical Unemployment

Situation #8 You lost your job at as a road construction worker due to local governments cutting spending on building new roads. You have an interview next week for a new job.

Cyclical Unemployment

Situation #9 You lost your job due to corporate downsizing. You

decide to go back to college to train for a career change.

Not Unemployed & Not Counted in Total Workforce

Situation #10 You lost your job, but your spouse can support your

family so you decide to be a stay home parent to save money by not having to pay for child care.


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Situation #11 You lost your job because the store you worked at

went out of business. You are enjoying the extra time you have, and you are too busy hanging out with your

friends to apply for a new job.


Situation #12 You work at a local ice cream shop.

Employed & Counted in Total Workforce

Situation #13 You stock shelves at a grocery store, even though you

have a business degree.


Situation #14 You are a night manager at a convenience store, even

though you have a degree in journalism.


Situation #15 You are a cashier at a clothing store.


Situation #16 You are a server at a high end restaurant.


Situation #17 You are a cook at a popular restaurant.


Situation #18 You are working as an intern at a public library.


Situation #19 You are a ride operator at an amusement park.


Situation #20 You are a manager at a sporting goods store.


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Situation #21 You are a nurse at a clinic.


Situation #22 You are a police officer in a small town.


Situation #23 You are a pilot for a major airline.


Situation #24 You are a sales rep for a pharmaceutical company.


Situation #25 You run your own business.


Situation #26 You are a salesperson for a car dealership.


Situation #27 You are a trainer for a software company.


Situation #28 You are a web designer for a global company.


Situation #29 You are a security officer at a sports stadium.


Situation #30 You are an accountant working for a large firm.


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VISUAL 1

3 Major Types of Unemployment

Structural Unemployment:

Occurs when changes in demand in an economy leads to an

increased need for particular skills and abilities from workers,

and causes other skills and abilities to become unneeded or

obsolete. An example of this is when automation replaces

physical labor.

Frictional Unemployment:

Occurs when a person chooses to leave their present job to find

another job, or is searching for a job for the first time, or is

searching for a job following a period of not being in the

workforce.

Cyclical Unemployment:

Occurs when market demand for a certain goods or services

decreases, and results in decreased production until market

demand increases. This causes fewer workers to be needed to

produce a good or service until demand increases. An example

of this is when during a recession consumers pull back on major

purchases like cars, boats, or homes.

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VISUAL 2

How to Calculate Unemployment

Unemployment Rate =

Total Unemployed Workers / Total Workforce

Total Unemployed Workers

People who are not working,

and are actively looking for a

job.

Total Workforce

All people who are either

looking for work or are

working in an economy.

Not Included:

People who give up looking for a job.

People who choose not to work.

People who are full-time students.

People who are disabled.

People who are under age 16.

People who are serving in the armed forces.

People who are institutionalized.

People who are incarcerated.

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Visual 3

U.S. Unemployment Rate—10 Year Range

2004-2014

Source: U.S. Unemployment Rate 2004-2014. Digital image. Bureau Labor Statistics. N.p., n.d. Web. 31 May 2014.

<http://data.bls.gov/timeseries/LNS14000000>.

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