Extra Credit - Fall 2009 - Student Activity

High school activity (grades 9–12)

The Labor Force and Unemployment
55 minutes

Related Links
On this site:
"Labor markets and today's economy" (Extra Credit, fall 2009)
Visuals 1 and 4 PDF document logo
Visuals 2, 3, and 5 PDF document logo
Scenario cards and answer sheets PDF document logo
On the Web:
U.S. Bureau of Labor Statistics

The function of the labor market is to match available jobs with available workers. When the unemployment rate is low (a "tight" labor market), jobs are secure and relatively easier to find. Low unemployment is often associated with increased wages and, sometimes, improved working conditions. Conversely, economic downturns and slow growth often cause higher levels of unemployment. Researchers use surveys to gather data about the nature of and levels of unemployment during a given period. In this activity, students will learn the concepts of labor markets, the labor force, types of unemployment, and the most commonly used measure of the rate of unemployment. Students use scenario cards to determine the classroom labor force, what type of unemployment they are experiencing, and the classroom unemployment rate.

Labor market; labor force (employed, underemployed, unemployed, discouraged workers, and out of the labor force); unemployment (fractional, structural, and cyclical); unemployment rate.

Students will be able to
  • define labor, the labor force, unemployment, and the unemployment rate
  • determine what type of unemployment the scenario cards represent
  • calculate the classroom unemployment rate
  • determine the national and state unemployment rates

Scissors or paper cutter; a printout of Visuals 1 and 4 (each cut into three sections) and the scenario cards (cut into 30 cards); printout (for teacher use only) of scenario card answers; overhead or PowerPoint slides of Visuals 2, 3, and 5; computer(s) with access to the Internet for assessment activity

  • Before the class begins, cut Visuals 1 and 4 into three sections each. Place the three signs from Visual 1 in separate corners or sections of the room. Place the three signs from Visual 4 in separate areas from each other and from the Visual 1 signs. Cut apart the 30 scenario cards and have them ready to hand out to students.
  • When class begins, display Visual 2 and discuss the terms with the students.
  • Pass out the 30 scenario cards (being sure to pass out all three "out of the labor force" cards) to the students, one for each student, until the cards are gone. Ask the students to sort themselves by standing near the "Employed" (18 students), "Unemployed" (9 students) or "Out of the labor force" (3 students) sign that applies to their scenario card. (Note: If you do not have 30 students in your class, you will need to modify the classroom unemployment rate to reflect the number of students who participated.)
  • Have the (three) "out of the labor force" students read their cards and then return to their seats.
  • Next, determine how many students are left standing. Inform the students that this number is the classroom labor force. There should be 27 students (or the number of students in your class minus the three "out of the labor force" students).
  • Determine how many students are in the "employed" category. Ask the "employed" students to read their cards out loud, individually, and then return to their seats.
  • Display Visual 3 and inform the students that there are different types of unemployment, determined by what caused the unemployment. The three types are frictional, structural, and cyclical. Review each term with the students.
  • Have the "unemployed" students sort themselves into the categories (frictional, structural, or cyclical) their scenario card describes, standing near the sign for their category. (You may want to let them know that there should be three students per category [if all thirty scenario cards were distributed]).
  • Ask if any of the "unemployed" students would like to volunteer to read their card. Ask the class if the scenario matches the description of the unemployment category.
  • Display Visual 5 and discuss how the unemployment rate is determined. Refer to Visual 2 for the classroom unemployment information. Have the students calculate the classroom unemployment rate.
  • Once the students understand how the unemployment rate is calculated, inform them that monitoring the U.S. unemployment rate is handled by the U.S. Bureau of Labor Statistics (BLS).
  • Data from a monthly survey of 60,000 households determines the size of the civilian labor force and how many are employed or unemployed.
  • Employment data are the most eagerly awaited news on the economy. Are jobs being created? The rate of unemployment has great economic and political significance.

    • Unemployment news is timely (though backward looking). The unemployment rate comes out a week after the end of the month being reviewed.
    • The report is rich in detail about the job market and household earnings, information that can help forecast future economic activity.
    • Wages and salaries from employment make up the main source of household income. The more workers earn, the more they buy and propel the economy forward. If fewer people are working, spending drops off, and business suffers.
Have student go to the BLS Web site (http://www.bls.gov/) to find answers to the following questions:

  • What is the national unemployment rate?
  • What is your state unemployment rate?
  • Is this rate historically high, low, or about average?
  • What is the highest rate of unemployment in the past five years? What is the lowest?

By Julie Kornegay, economic and financial education specialist, Birmingham Branch

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November 9, 2009