1. Unemployment Lesson Essential Questions:
Why was there little unemployment in command economies?
What are the trade-offs among the goals related to labor during transition?

2. The Main Idea…
When it comes to unemployment, there are opportunities and consequences associated with transitioning from command to market (trade-offs).
We’ll be comparing/contrasting the economic performance of each system.

3. Introduction
Unemployment – people actively looking for jobs cannot find work
Underemployment – workers unable to work as many hours as they want or have jobs that do not fully use their training and skills
Both affect levels of national income and economic growth
In a market economy, employers are willing to pay higher wages for better workers who can produce more/better products. Labor productivity is determined by training, skills, technology, and efficient use of other productive resources/inputs. There may be unemployment.
When unemployment and underemployment exist, an economy’s production is less than its potential GDP and some labor resources are not used.
In a command system, full employment is achieved by providing jobs for all workers, so there is extensive underemployment as jobs may not make the best use of an individual’s skill set, etc.

4. Activity 1 Unemployment rates are ratios…
Numerator: the number of people who want to work and are actually looking for work but do not have jobs (unemployed)
Denominator: the number of people who want to work and are actively looking for or have jobs (labor force)
Complete ACTIVITY 1
By definition, an unemployed person must be a member of the labor force and thus actually seeking work. Retirees, people in prison, or others who chose not to work for whatever reason are not part of the labor force.

5. Conclusions from Case 1?
Case 1: (Initially employed = 100, unemployed = 25, unemployment rate = 25/125 or 25%); (After the lottery, employed = 100, unemployed = 20, unemployment rate = 20/120 or 17%)
What conclusions can you draw from this example?
Even when the number of jobs remains the same, the unemployment rate will change if the size of the labor force changes. The same number of people (5) was subtracted from both the numerator and the denominator, resulting in a smaller fraction or ratio.

6. Conclusions from Case 2?
Case 2: (Initially employed = 70, unemployed = 30, unemployment rate = 30/100 or 30%); (After the new government policy is adopted, employed = 100, unemployed = 0, unemployment rate = 0%)
What conclusions can you draw from this example?
Unemployment rates do not measure how productive workers are. If production levels remain the same but more people are employed, employment rises and unemployment falls. But productivity or output per worker is also lower.

7. Activity 2
Write a paragraph summarizing a real world situation in which you observed worker productivity to be high, medium, or low. List changes in the process that might raise or lower productivity.
Be ready to share! 

8. The Queue Blues at the Central Store
What was life like in the former Soviet Union?

9. Rules for the Simulation
Eight students are employees at the Central Store:
Security guard who monitors traffic and disruptions
Cashier who handles all the cash transactions
6 counter clerks who process orders for one of three food items
The rest of you are customers

10. Queue Blues Recap How many orders were processed?
Were all employees of the Central Store always busy? If not, who was less busy?
Was the store efficient?

11. Queue Blues Recap
In command economies, full employment is sometimes achieved by hiring more workers than necessary which results in low productivity or underemployment.
Were some of the workers at the Central Market underemployed? How could you tell?
How will unemployment and underemployment affect the standards of living and income levels?
In any economy, income levels and what people can consume depend upon the level of goods and services produced… How will unemployment and underemployment affect the standards of living and income levels? Lower them!!!

12. The BIG Concepts
Unemployment tends to be higher in market economies, but in command economies there is likely to be more underemployment.
Average production and income levels are lower in command economies than in industrial market economies.
There is a level of protection from unemployment in the command economies that is not always provided to workers in a market economy.

13. Closure Questions Answer today’s Lesson Essential Questions! 
Why was there little unemployment in command economies?
What are the trade-offs among the goals related to labor during transition?