Foundation for Teaching Economics | The Job Jungle

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Participants:

Workers

Twenty or more students to act as workers in search of employment.

Employers

Four to six students to act as employers in the competitive kite industry. Each employer has one teacher who serves as a management advisor.

Consultants

Four to six teachers to give employers advice and to help with record keeping in the company.

Educators

Three or four teachers to act as educators, who can enhance the labor market skills of workers.

Goals:

Workers

The goal of each worker is to earn the greatest total income. Workers earn income by finding an employer who will hire them at a mutually acceptable wage or by remaining unemployed and receiving public assistance. The winning Worker receives $5.

Employers

The goal of each employer is to generate the greatest total profits. Profits are equal to the difference between revenues and costs of production. Employers must hire workers in order to produce kites, which generate revenues. The costs of production are determined by the wages negotiated between workers and employers. Employers try to negotiate relatively low wages in order to increase profits, while workers seek relatively high wages to maximize total income. The winning Employer receives $5.

Skills & Endowments:

Green Card
(3x5 index)

All workers begin the first round as LOW skilled. These workers carry a green card that identifies them to employers as LOW skilled. Green cards have a random wealth endowment of $4, $5, or $6 written on the back, so all workers start off with some resources.

Blue Card
(3x5 index)

At the end of any round, a worker may become HIGH skilled by acquiring an education from an educator. The worker pays $25 out of total income for this education. The educator gives the worker a blue card and collects the worker's green card. (Note: No borrowing is allowed; workers must have total income of at least $25 to become HIGH skilled.)

How to Play the Game:

DISCUSS LABOR DEMAND AND SUPPLY - Instructors must prepare participants for this exercise by beginning with a discussion of derived demand for and supply of labor. The demand side discussion should explain why profit-maximizing employers will not offer more than the value of a worker's marginal product. The supply side discussion should highlight the opportunity cost a worker faces when considering whether to accept a wage offer. This is a bare-bones discussion. Other issues, such as working conditions, unemployment insurance, or economic fluctuations are not important at this point.
DISTRIBUTE PLAYING MATERIALS - All workers receive green cards to start the game. Each employer receives an Output and Marginal Product Schedule and a colored pen. Give a different colored pen to each educator. Distribute blue cards to the educators. Pair up teacher consultants and employers, and ask educators to locate themselves in the back of the room or somewhere easily accessible to workers.
MARKET PRICE AND PUBLIC ASSISTANCE - Announce to employers that the competitive market price of kites is $10. (You may change the price from round to round, depending on how complex you want to make the game.) Ask employers and their consultants to distribute themselves around the room; they can move around later if they want to. In the first round, announce to green card workers that if they do not find an acceptable job offer, they receive $15/round in income from public assistance programs. In later rounds, announce to blue card workers that they receive $35/round in income from public assistance programs if they do not accept a job offer.
REPEAT GOALS - Repeat goals of workers and employers. Note that total income and total profits are cumulative. Workers add their initial endowment to the income received in all rounds, and then subtract any education costs, to compute total income. Employers add profits generated in all rounds to compute total profits. Announce rewards for the winners once again.
HIRING PROCESS - A job lasts for only one round. Make sure that workers and employers know that they are bargaining over wages in each round. Remind employers that the value of the marginal product changes with each new worker hired! When an employer and worker agree on a wage, the employer writes the wage and his or her name or ID on the worker's (green or blue) card with the colored pen. This ensures that workers do not try to sell their services twice in the same round because they have found a better offer. ONCE MADE, A DEAL CAN-NOT BE BROKEN. Employers also record wages paid on their Output and Marginal Product Schedule.
ACQUIRING NEW SKILLS - At the end of any round, workers may choose to become HIGH skilled by paying $25 to an educator. The educator deducts $25 from the total income shown on the worker's green card and writes the new total on the worker's blue card. Workers do not keep their green cards! Once they have invested in an education, they cannot undo this investment.
PLAYING A ROUND - The first round may last 6-8 minutes as workers search for better job offers. It is better to place a time limit on each round and announce the time remaining when the end approaches. Ask all workers to sit down when the round ends. Make sure that employers/consultants keep timely records on each round.
ENDING THE GAME - The game can be stopped after two or three rounds. If more rounds are played, some of the variations discussed below should be used to keep the participants interested. After potential winners have been identified, ask an educator to check their math. Mistakes are often made by employers. In the event of a tie, a coin toss is used to determine the winner.

Game Variations:

Economic Fluctuations: The effects of economic expansions and contractions can be added by changing the output price of kites. An output price of $6 reduces equilibrium employment by one green and one blue card worker for each employer. Similarly, an output price of $20 increases employment of each type by one worker.

Public Assistance: The effects of public assistance programs can by illustrated by changing the amount of assistance paid to each type of worker. If blue card workers receive $15 during unemployment, for example, more blue card workers are employed at the new equilibrium wage of $20.

New Employers or Entry: The effects of entry on profits can be shown by allowing workers who have earned $100 to become employers. The new entrants drive profits close to zero if the game is played for several rounds.

Over-Qualified Workers: If blue card workers are allowed to keep their green cards, they can seek work as either type of worker. This will act to equalize wages between blue and green card workers.

Output and Marginal Product Schedule

The Price of Kites (P) Equals $_________

GREEN CARD WORKERS				BLUE CARD WORKERS
Worker Hired	Kites Produced	Marginal Product (MP)	P x MP	Worker Hired	Kites Produced	Marginal Product (MP)	P x MP
1^st	5	5		1^st	8	8
2^nd	8	3		2^nd	14	6
3^rd	10	2		3^rd	19	5
4^th	11	1		4^th	22	3
5^th	12	1		5^th	24	2
6^th	12	0		6^th	25	1

Round #1 - Wages Paid				Round #1 - Profit Calculation
Green Card		Blue Card
Worker	Wage	Worker	Wage	Output (All Workers)
Hired	Paid	Hired	Paid	times Price of Kites
1^st		1^st		equals TOTAL REVENUE
2^nd		2^nd
3^rd		3^rd		Total Green Card Wages
4^th		4^th		plus Total Blue Card Wages	XXXX
5^th		5^th		equals TOTAL COST
6^th		6^th
Total		Total	XXXX	Total Revenue - Total Cost

Round #2 - Wages Paid				Round #2 - Profit Calculation
Green Card		Blue Card
Worker	Wage	Worker	Wage	Output (All Workers)
Hired	Paid	Hired	Paid	times Price of Kites
1^st		1^st		equals TOTAL REVENUE
2^nd		2^nd
3^rd		3^rd		Total Green Card Wages
4^th		4^th		plus Total Blue Card Wages
5^th		5^th		equals TOTAL COST
6^th		6^th
Total		Total		Total Revenue - Total Cost

Round #3 - Wages Paid				Round #3 - Profit Calculation
Green Card		Blue Card
Worker	Wage	Worker	Wage	Output (All Workers)
Hired	Paid	Hired	Paid	times Price of Kites
1^st		1^st		equals TOTAL REVENUE
2^nd		2^nd
3^rd		3^rd		Total Green Card Wages
4^th		4^th		plus Total Blue Card Wages
5^th		5^th		equals TOTAL COST
6^th		6^th
Total		Total		Total Revenue - Total Cost

Round #4 - Wages Paid				Round #4 - Profit Calculation
Green Card		Blue Card
Worker	Wage	Worker	Wage	Output (All Workers)
Hired	Paid	Hired	Paid	times Price of Kites
1^st		1^st		equals TOTAL REVENUE
2^nd		2^nd
3^rd		3^rd		Total Green Card Wages
4^th		4^th		plus Total Blue Card Wages
5^th		5^th		equals TOTAL COST
6^th		6^th
Total		Total		Total Revenue - Total Cost

Round #5 - Wages Paid				Round #5 - Profit Calculation
Green Card		Blue Card
Worker	Wage	Worker	Wage	Output (All Workers)
Hired	Paid	Hired	Paid	times Price of Kites
1^st		1^st		equals TOTAL REVENUE
2^nd		2^nd
3^rd		3^rd		Total Green Card Wages
4^th		4^th		plus Total Blue Card Wages
5^th		5^th		equals TOTAL COST
6^th		6^th
Total		Total		Total Revenue - Total Cost

Round #6 - Wages Paid				Round #6 - Profit Calculation
Green Card		Blue Card
Worker	Wage	Worker	Wage	Output (All Workers)
Hired	Paid	Hired	Paid	times Price of Kites
1^st		1^st		equals TOTAL REVENUE
2^nd		2^nd
3^rd		3^rd		Total Green Card Wages
4^th		4^th		plus Total Blue Card Wages
5^th		5^th		equals TOTAL COST
6^th		6^th
Total		Total		Total Revenue - Total Cost

The Job Jungle - A Labor Market Game

Page Summary

Participants:

Goals:

Skills & Endowments:

How to Play the Game:

Game Variations: