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
2014 3M Innovative Economic Educator Award
Secondary, 2nd Place
Page 1 of 15
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
Page 2 of 15






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.
Visual 2 to be displayed for class to view.
Visual 3 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.
Page 3 of 15
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 fulltime 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.
Page 4 of 15
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.
Page 5 of 15
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.)
Page 6 of 15
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).
Page 7 of 15
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.
Page 8 of 15
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.
Page 9 of 15
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.
Page 10 of 15
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.
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.
Structural Unemployment
Structural Unemployment
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
Structural Unemployment
Situation #5
You just had a big disagreement with your boss, so you
decide to quit and look for a new job.
Frictional Unemployment
Situation #6
Congratulations! You just graduated college, now you
are sending out resumes and applications to start your
new career.
Frictional Unemployment
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.
Cyclical Unemployment
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.
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.
Not Unemployed & Not Counted in Total Workforce
Not Unemployed & Not Counted in Total Workforce
Page 11 of 15
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
Not Unemployed & Not 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.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Situation #15
You are a cashier at a clothing store.
Situation #16
You are a server at a high end restaurant.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Situation #17
You are a cook at a popular restaurant.
Situation #18
You are working as an intern at a public library.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Situation #19
You are a ride operator at an amusement park.
Situation #20
You are a manager at a sporting goods store.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Page 12 of 15
Situation #21
You are a nurse at a clinic.
Situation #22
You are a police officer in a small town.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Situation #23
You are a pilot for a major airline.
Situation #24
You are a sales rep for a pharmaceutical company.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Situation #25
You run your own business.
Situation #26
You are a salesperson for a car dealership.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Situation #27
You are a trainer for a software company.
Situation #28
You are a web designer for a global company.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Situation #29
You are a security officer at a sports stadium.
Situation #30
You are an accountant working for a large firm.
Employed & Counted in Total Workforce
Employed & Counted in Total Workforce
Page 13 of 15
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.
Page 14 of 15
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.
Page 15 of 15
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>.