Grade 12

12E.5 Economic Data Tells a Story: Unemployment

Meghan Selway, Coordinator, UC Davis History Project.

This lesson focuses on how unemployment data can help tell us the story of the economy today. Using historical and current data, students will be able to determine if the current unemployment is high or low. In order to do so, students will:

analyze data through various formats — graphs, charts, tables, and in text
identify the source of the data
understand the limitations of data in telling the whole story of unemployment
recognize that making a claim that a number is high or low requires other numerical references to prove that a number is high or low

The lesson provides tools for sourcing, reading, and analyzing data in graphical form and strategies for using data as evidence in writing.

HSS 12.5.2 Define, calculate, and explain the significance of an unemployment rate, the number of new jobs created monthly, an inflation or deflation rate, and a rate of economic growth.

Investigative Question

How does data help to tell the story of the economy?

Small percentage changes in economic growth can have a significant impact on employment and price levels. Students will learn how the federal government compiles the measurements for economic growth and income, the unemployment rate, number of jobs created or lost, the rate of changes in the price level, and the impact of changes in these data on their personal economic and financial opportunities. The question How does data help to tell the story of the economy? can help students synthesize this breadth of quantitative information. For a market economy, traditional keys to long-term economic growth include implementing incentives for innovation, investing in capital goods, improving the human capital of the workforce, and encouraging entrepreneurship and technological innovation.

Historical Background
English Language Development Extension Activity

How does unemployment data help to tell the story of the economy? Students are generally familiar with the concept of unemployment and can easily see how it affects their lives. Studying unemployment can help motivate students to learn how to analyze data and understand its use and connections to the economy today. This lesson provides an opportunity for students to understand the cyclical nature of unemployment in US history. It can also be used as a model to investigate data of multiple economic indicators such as gross domestic product (GDP) and inflation, which in combination with unemployment provides a strong picture of where the United States is in the business cycle. Using unemployment as a starting point to introduce data and the business cycle gives more relevance to students. This source set examines time periods with low and high unemployment rates and considers how observations from the past can help us understand the current economy.

Each source includes text-dependent questions to assist students in analyzing the source and repeats the essential question, How does unemployment rate data tell the story of the economy? so students can use new information from each source to build a final answer to the question.

Source 1 provides the current unemployment rate in graph form. Source 2 states estimates for labor force data and includes the unemployment rate in a table format for a different time period. While both sources provide the unemployment rate, teachers will need to go over how that rate is calculated. The student information for Source 1 addresses this calculation. Students will need to understand that in order to identify if the rate is historically high or low, they must have other data to compare to the current numbers. Source 1 provides the unemployment rates from 1948 to today and Source 2 provides the unemployment rates from 1900 to 1940. From these two sources, students should be able to identify whether the unemployment rate is high or low in comparison to historical data.

Source 3 shows where the data from unemployment used to come from (census information), and Source 4 indicates where it comes from now (the Current Population Survey).

Source 5 begins to highlight limitations to the collected data that make up the unemployment rate, specifically marginally attached and discouraged workers. Sources 6 and 7 address who is not included in the unemployment data (Source 6) and how the Bureau of Labor Statistics has additional data to rectify this — “Alternative Measures of Labor Underutilization” (Source 7). It is important for students to understand that the numbers, like many statistics, do not tell the whole story due to the mode of collection and questions asked.

Source 8 (optional) gives teachers a way to address civics by helping students understand the relevance of unemployment to themselves, their family, and their community through an examination of the unemployment in their state and county. Source 8b gives teachers an option to address unemployment in select counties. In addition, Source 8b on local unemployment can serve as a cumulative check of students’ ability to analyze and write about economic data.

As an extension to this lesson, teachers may repeat the data analysis and paragraphs when covering gross domestic product and inflation so that the students can make the most accurate claims using all three major economic indicators to show the state of the economy on the business cycle.

Note: These sources and lesson keys use data from July 2019. Links are included for teachers and students to access current data instead; however, lesson keys would need to be

Pre-Writing Questions *Teachers may choose to address these questions with each source analysis *Note: these sources rely on data from July 2019. If you use updated data, some of the questions and keys will need to be updated accordingly. Source 1: As reported by the Bureau of Labor Statistics on July 9, 2019, in “Labor Force Statistics from the Current Population Survey,” from the period 1948 to 2019: 1. Unemployment was at its LOWEST point at __________ (numerical data) in ______ (date). a. What factors might cause this low unemployment rate? How does a low rate of unemployment affect the overall economy? How does it affect the everyday lives of Americans? 2. Unemployment was at its HIGHEST point at __________ (numerical data) in ______ (date). a. What factors might cause this high unemployment rate? How does a high rate of unemployment affect the overall economy? How does it affect the everyday lives of Americans? 3. The unemployment rate in July 2019 was _____ (numerical data) and is historically LOW/HIGH(circle one). a. How might the unemployment rate in 2019 affect your life? 4. Those who are NOT included in the unemployment rate are: _______________________________ _______________________________________________________________________ (list them). Source 2: Compiled by the Bureau of Census in September 1975, “Series D 1-10, Labor Force and Its Components: 1900 – 1947” indicates: 1. Unemployment was at its HIGHEST point at __________ (numerical data) in ______ (date). a. What events in US history may have caused this? 2. Unemployment was at its LOWEST point at __________ (numerical data) in ______ (date). a. What events in US history may have caused this? 3. How is the labor force data in this source different from data in Source 1? Why is this important? Source 3: The poster “United States Unemployment Census, November 16 – 20” shows: 1. How data on unemployment in 1937 was collected: __________ (who, what, how, etc.) 2. Limitations of the unemployment numbers using 1937 collection methods such as __________. 3. Source 2 data was possibly collected by __________. 4. An Act of Congress to collect unemployment data in 1937 was issued because __________. Source 4: “How the Government Measures Unemployment,” published on the Bureau of Labor Statistics website, documents: 1. How data on unemployment is collected TODAY: __________ (who, what, how, etc.) 2. Limitations of the unemployment numbers based on collection methods today, such as: __________. 3. Unemployment data was collected in 1937 (Source 3) by __________ , whereas today it is collected by __________ (Source 4). This is important because __________. 4. Source 1 data was collected by __________ . Source 5: According to the Household Survey Data from the source “Employment Situation,” produced by the Bureau of Labor Statistics based on the Census Bureau’s Current Population Survey (CPS): 1. Who is counted as unemployed? ● Who are long-term unemployed? Are they counted as unemployed in the unemployment rate calculation? 2. Who is not counted as unemployed? ● Who are “marginally attached workers,” and why are they not defined as unemployed? ● Who are “discouraged workers” (a subset of marginally attached workers), and why are they not defined as unemployed? 3. How many people are currently unemployed as of ___ (date)? How many more are unemployed but not counted? 4. According to this source, what are the limitations of unemployment data? Source 6: As stated in the Bureau of Labor Statistics Report 416, “Employment in Perspective: Unemployment of Black Workers,” published in October 1972: 1. Who is counted as unemployed? ● Why do you think the author is concerned that the data collected on unemployment does not include “What a person is doing to find work”? 2. Who is not counted as unemployed? ● Why would the author say that in defining unemployment, it is important to know why a person does not have a job, whether she or he “quit his job, was laid off, or never had a job before,” or “turned down a job offer” ? ● Why do you think the author says it is important to also collect information on what type of job a person wants — “full-time or part-time job, or a temporary job”? 3. According to this source, what are the limitations of unemployment data? Source 7: Based on the Bureau of Labor Statistics July 2019 report “Household Data: Table A-15, Alternative Measures of Labor Underutilization”: 1. Who is not counted as unemployed? 2. The unemployment rate as of ___ (date) is _____. 3. The unemployment rate with marginally attached, discouraged workers, and part-time workers for economic reasons as of ___ (date) is _____. 4. According to this source, what are the limitations of unemployment data? 5. How does this source compare with Source 6, Employment in Perspective (1972) ? Source 8: As recorded by the Bureau of Labor Statistics on July 9, 2019, “Local Area Unemployment Statistics,” from the period 1976 to 2019: 1. Unemployment in California was at its HIGHEST point at __________ (numerical data) in ______ (date). 2. Unemployment in California was at its LOWEST point at __________ (numerical data) in ______ (date). 3. The unemployment rate in California in July 2019 is _____ and is historically LOW/HIGH(circle one). Writing Activity Write a paragraph that answers the following question: How does data tell the story of unemployment in the current economy? Paragraph Format/Sentence Starters Claim Unemployment data can tell the story of an economy. Paragraph Frame Introduce evidence As of _____ (date), unemployment is __________ (low, high, average). Cite evidence: ● Provide numerical evidence. o As reported by ______________(name source) in ________ (date), the unemployment rate is __________ (number). Explain evidence: ● Explain what the data says — the who, what, where, when, why, how of the data. o The data is collected by _______ (who) ________ (when, where). o The data prior to 1948 was collected by _______ (who). o In order to determine the number of people without jobs (why), the unemployment rate is determined/calculated by __________ (how). ● Explain what the data means by comparing current numbers to historical data. o According to the data of ______________ (name source), historically high unemployment rate is _______ (numerical data), as it was in _______ (date), while low unemployment rate is _______ (numerical data), as it was in _______ (date). ● Explain what the data shows — tie evidence back to claim — how the unemployment rate can tell the story of the economy. o This shows that today’s unemployment rate of ______ (today’s data) is ________ (high/low) in comparison. o _____ (Low/High) unemployment rate tells us that the economy is __________ (expanding/contracting) because __________. Concession: ● Explain limitations to the data/evidence — why data does not tell the full story. ○ However, there are limitations to the unemployment numbers in how the data is collected and who is counted in the unemployment rate. ○ Unemployment data collection has its limitations. ■ Originally, data on unemployment was collected __________ (how). This had limitations because __________ . While unemployment data is now collected __________ (how), there are still limitations like __________. ○ Who is counted as unemployed in the unemployment rate also has its limitations. ■ According to ________, the unemployment rate does not include __________. ■ As the _______(date) article, ____________(title of article) by _____ (author of article) noted, the unemployment data does not count __________. ○ This means that the unemployment rate could be _________ (higher, lower). ○ To address these limitations __________. Conclusion: Unemployment data can tell the story of the economy. When unemployment is low, it tells you that the economy is __________ (doing what) because __________. When unemployment is high, it tells you that the economy is __________ (doing what) because __________. Knowing about unemployment data is important because __________. Optional: Students write their own paragraph summarizing the data in Source 8 about local unemployment. Encourage students to use some of the sentence starters to assist them. 12E.5 Teacher Key #1 Pre-Writing Source Analysis *Teachers may choose to address these questions with each source analysis *Note: these sources rely on data from July 2019. If you use updated data, some of the questions and keys will need to be updated accordingly. Source 1: As reported by the Bureau of Labor Statistics on July 9, 2019, in “Labor Force Statistics from the Current Population Survey,” from the period 1948 to 2019: 1. Unemployment was at its LOWEST point at _____3%_____ (numerical data) in ___1952/3___ (date). a. What factors might cause this low unemployment rate? How does a low rate of unemployment affect the overall economy? How does it affect the everyday lives of Americans? Answers will vary but may include tapping into US history knowledge such as wartime (which calls for production of wartime materials and more workers) and the rise of the middle class. 2. Unemployment was at its HIGHEST point at ____close to 10%______ (numerical data) in __1983____ (date). a. What factors might cause this high unemployment rate? How does a high rate of unemployment affect the overall economy? How does it affect the everyday lives of Americans? Answers will vary but may include economic crashes and discussion of the recent recession and the housing boom and bust and how this may have affected students’ lives (family members losing jobs, college students graduating and not finding jobs, loss of money in stock markets). 3. The unemployment rate in July 2019 was LOW/HIGH (circle one) at _____around 4%_____ (numerical data). a. How might the unemployment rate in 2019 affect your life? Answers will vary but may include the following: easier to get a job, more money in the economy, more demand for goods and services. 4. Those who are NOT included in the unemployment rate are: Employed over 16 years, retirees, homemakers, caretakers, non-working students, discouraged workers. Source 2: Compiled by the Bureau of Census in September 1975, “Series D 1-10, Labor Force and Its Components: 1900 – 1947” indicates: 1. Unemployment was at its HIGHEST point at ____25.2%______ (numerical data) in __1933____ (date). a. What events in US history may have caused this? Great Depression 2. Unemployment was at its LOWEST point at _____1.2%_____ (numerical data) in ___1944___ (date). a. What events in US history may have caused this? Wartime preparation, World War II 3. How is the labor force data in this source different from data in Source 1? Why is this important? The labor force in Source 1 is 16 years and older, the labor force in Source 2 is 14 years and older. There would be more people counted in the labor force from 1900 to1947. Source 3: The poster “United States Unemployment Census, November 16 – 20” shows: 1. How data was collected on unemployment in 1937: Data in 1933 was collected through the US census via postcards sent in the mail. 2. Limitations of the unemployment numbers using 1937 collection methods such as … The data collected was voluntary and through mail-in postcards, so not everyone replied. Those who did reply may not have been a representative sample of the American population. 3. Source 2 data was possibly collected by the Census Bureau through voluntary postcard surveys or interviews. 4. An Act of Congress to collect unemployment data in 1937 was issued because of the Great Depression, to assess recovery efforts. Source 4: “How the Government Measures Unemployment,” published on the Bureau of Labor Statistics website, documents: 1. How data is collected TODAY: Current Population Survey ● “60,000 eligible households, 110,000 individuals each month” ● “2,000 geographic areas (sampling units). 800 of these geographic areas to represent each state and the District of Columbia.” 2. Limitations of the unemployment numbers based on collection methods today, such as: It is just a sampling of households, not data on everyone. “The total unemployment figures cover more than the number of people who have lost jobs. ● people who have quit their jobs to look for other employment ● workers whose temporary jobs have ended ● individuals looking for their first job ● experienced workers looking for jobs after an absence from the labor force (for example, stay-at-home parents who return to the labor force after their children have entered school).” 3. Unemployment data was collected in 1937 (Source 3) by the Census Bureau through voluntary mail-in cards and follow-up surveys, whereas today, it is collected by the Bureau of Labor Statistics through the monthly Current Population Survey of 60,000 households in 2,000 geographic areas in the United States (Source 4). This is important because now it is more frequent (monthly) and has a more defined sample of the American people. 4. Source 1 data was collected by the Bureau of Labor Statistics Source 5: According to the Household Survey Data from the source “Employment Situation,” produced by the Bureau of Labor Statistics based on the Census Bureau’s Current Population Survey (CPS): Who is counted as unemployed? ● Who are long-term unemployed? Are they counted as unemployed in the unemployment rate calculation? “Those jobless for 27 weeks or more” (approximately 9 months). Yes, they are counted as unemployed. 2. Who is not counted as unemployed? ● Who are “marginally attached workers,” and why are they not defined as unemployed? “Those who wanted and were available for work, and had looked for a job sometime in the prior 12 months.” They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. ● Who are “discouraged workers” (a subset of marginally attached worker), and why are they not defined as unemployed? “Persons not currently looking for work because they believe no jobs are available for them.” They were not counted as unemployed because they stopped looking for work because they thought nothing was available to them. 3. How many people are currently unemployed as of ___ (date)? How many more are unemployed but not counted? In July 2019, 6.1 million people were unemployed. With the marginally attached of 1.5 million, the total unemployed would be 7.6 million. 4. According to this source, what are the limitations of unemployment data? Marginally attached workers and discouraged workers are not included. Source 6: As stated in the Bureau of Labor Statistics Report 416, “Employment in Perspective: Unemployment of Black Workers,” published in October 1972: 1. Who is counted as unemployed? ● Why do you think the author is concerned that the data collected on unemployment does not include “What a person is doing to find work”? Answers will vary. Suggested response: If that is the determining factor for counting someone as “unemployed,” some people may be doing more to look for a job than others — like sending a resume, interviewing, or taking courses to improve skills — while others may not be doing as much to look for a job. 2. Who is not counted as unemployed? · Why would the author say that in defining unemployment, it is important to know why a person does not have a job, whether she or he “quit his job, was laid off, or never had a job before” or “turned down a job offer”? Some reasons this information might be helpful is that if a person quit his or her job, the unemployment was voluntary — the job did not disappear and was available to someone else. But if someone was laid off, that was involuntary, a forced unemployment. If someone was offered a job and turned it down, again that was voluntary. · Why do you think the author says it is important to also collect information on what type of job a person wants — “full-time or part-time job, or a temporary job”? Someone may voluntarily be looking for part-time or temporary employment, while others may be taking a part-time or temporary job because a full-time one was not available, or they were forced to cut down on their hours. If someone wants a part-time or temporary job, that’s different from someone who wanted full-time work but could not get it and had to take part-time. 3. According to this source, what are the limitations of unemployment data? Some people may be “work-seeking” more than others but are counted the same, some people voluntarily left jobs and others didn’t, some people desire full-time employment and some people don’t. Source 7: Based on the Bureau of Labor Statistics July 2019 report “Household Data: Table A-15, Alternative Measures of Labor Underutilization”: 1. Who is not counted as unemployed? ● Discouraged workers (want and are able to work, looked for work in the prior 12 months, but did not look in the past 4 weeks because they thought no jobs were available to them). ● Marginal attached workers (those who looked for a job within 12 months but not in the 4 weeks prior to the survey). ● “Those employed part time for economic reasons,” which means they wanted full-time work but either could not find it and/or their hours had been cut back, so they settled on part-time work of less than 35 hours. 2. The unemployment rate as of _July 2019__ (date) is __3.7%___. 3. The unemployment rate with marginally attached, discouraged workers and part-time workers for economic reasons as of _July 2019__ (date) is __7%___. 4. According to this source, what are the limitations of unemployment data? “those employed part-time for economic reasons” 5. How does this source compare with Source 6, Employment in Perspective (1972)? It collects data on marginally attached and discouraged workers that Source 6 showed was important in understanding unemployment. Source 8: As recorded by the Bureau of Labor Statistics on July 9, 2019, “Local Area Unemployment Statistics,” from the period 1976 to 2019: 1. Unemployment in California was at its HIGHEST point at ____around 12%______ (numerical data) in __2010__ (date). 2. Unemployment in California was at its LOWEST point at ____4%______ (numerical data) in __2019____ (date). 3. The unemployment rate in California in July 2019 is ____4%___ and is historically LOW/HIGH (circle one) . 12E.5 Teacher Key #2 Writing Activity *Note: this key relies on data from July 2019. If you use updated data, some of the responses and the key will need to be updated accordingly. Write a paragraph that answers the following question: How does data tell the story of unemployment in the current economy? Paragraph Format/Sentence Starters Claim. Unemployment data can tell the story of an economy. Paragraph Frame Introduce evidence As of _____ (date), unemployment is __________ (low, high, average). Cite evidence: ● Provide numerical evidence. As reported by Bureau of Labor Statistics (BLS), in July 2019 unemployment is 3.7%. Explain evidence: ● Explain what the data says — the who, what, where, when, why, how of the data. The data is collected by the Bureau of Labor Statistics through the Current Population Survey, a survey of 60,000 households in various areas in each state each month. The data prior to 1948 was collected by the Census Bureau. In order to determine the number of people without jobs, the unemployment rate is determined/calculated by dividing the total number of unemployed identified in the survey by the total civilian labor force. ● Explain what the data means by comparing current numbers to historical data. According to the data of the Bureau of Labor Statistics and the Census Bureau, historically high unemployment is 25.2%, as it was in 1933, while low unemployment is 1.2%, as it was in 1944. ● Explain what the data shows — tie evidence back to claim — how the unemployment rate can tell the story of the economy. This shows that today’s unemployment rate of 3.7% is low in comparison. Low unemployment tells us that the economy is expanding because ... Answers may vary but below are suggested responses. … if people have jobs, demand for goods and services must be high, which would result in increased production and more workers to meet the demand. … if people have jobs, they have money to spend in the economy, which causes it to grow. Concession: ● Explain limitations to the data/evidence — why data does not tell the full story. However, there are limitations to the unemployment numbers in how the data is collected and who is counted in the unemployment rate. Unemployment data collection has its limitations. Originally, data on unemployment was collected by the Census Bureau through postcards filled out and sent in the mail. This had limitations because it was voluntary so not everyone was counted, and those who did reply may not have been representative of the US population at the time. While unemployment data is now collected through the Current Population Survey of 60,000 households in 800 regions across the states, there are still limitations like it is still a sample of the population, not the entire population. Who is counted as unemployed in the unemployment rate also has its limitations. According to the BLS, the unemployment rate does not include those who have taken part-time work but want full-time work, those who have been looking for work longer for 12 months, just not in the 4 weeks prior to the Current Population survey (marginally attached) or those who feel no job is available to match their skills and have given up looking for work (discouraged workers). As the 1972 article “Employment in Perspective: Unemployment of Black Workers” by US Department of Labor, Bureau of Labor Statistics, noted, another limitation on this data collection is that the survey of the unemployed includes those who purposely quit their job, are seasonally unemployed and will get a job again, and those who are just entering the workforce for the first time or re-entering after a long absence, such as those taking care of children or other family members (which means they were not looking for a job before that). This means that the unemployment rate could be higher. To address these limitations, the BLS created the Alternative Measures of Labor Underutilization, which estimates the unemployment rate that includes marginally attached and discouraged workers and part-time workers at 7% for July 2019. Conclusion: Unemployment data can tell the story of the economy. When unemployment is low, it tells you that the economy is expanding because people have jobs and money that they can spend on goods and services, which creates a demand for more goods and services. When unemployment is high, it tells you that the economy is not expanding (or that it is contracting) because people don’t have jobs and don’t have money to buy goods and services, which creates less and less demand for goods and services. Knowing about unemployment data is important because … answers will vary. Optional: Student write their own paragraph summarizing the data in Source 8 about local unemployment. Encourage students to use some of the sentence starters to assist them.