Could You Earn a Million Dollars?

This lesson is designed to acquaint students with the relationship between earnings and education. The data are very clear regarding one’s earning potential and educational attainment. That is, the more education an individual has the greater his or her earning potential. This is an important lesson for the students to explore as they begin forming opinions about the value of school and their own education. The students will use their mathematics skills to explore the relationship between earnings and education. They will also define earnings and human capital.

This lesson is designed to acquaint students with the relationship between earnings and education. The data are very clear regarding one’s earning potential and educational attainment. That is, the more education an individual has the greater his or her earning potential. This is an important lesson for the students to explore as they begin forming opinions about the value of school and their own education. The students will use their mathematics skills to explore the relationship between earnings and education. They will also define earnings and human capital.

Prior to this lesson, students should know:

Mathematics Prerequisites

• Multiplication
• Mean
• Median
• Range
• Scatter plots

Mathematics Terms

• Whole Number Operations
• Mean, Median, and Range
• Process-algorithms for use in calculating yearly earnings from an hourly wage
• Graphical representations for a data set

This lesson was originally published in CEE's Mathematics & Economics: Connections for Life (Grades 6-8).  Visit https://store.councilforeconed.org/ for more information about this publication and how to purchase it.

• Define earnings and human capital.
• Calculate annual earnings based on an hourly rate.
• Organize and analyze data on education and earnings.
• Make conjectures about the correlation between educational attainment and earnings.
• Calculate the difference in lifetime earnings for people with differing levels of education.

• Activity 8.1
• Activity 8.2
• Visual 8.1
• Visual 8.2
• Visual 8.3
• Education Playing Cards (one card for half the class)
• Earnings Playing Cards (one card for half the class)
• Room Layout Suggestion

Warm-Up Activities

Your company is testing portable CD players. The machines (denoted by letters A-T, below) are run for a number of hours equivalent to the number of months of normal use. Here is the number of months the tested machines would last:

Group 1

A new set of tests was run with new, more expensive gear. Here are the new test results:

Group 2

Find the mean, median and range for each set of data.

Should the company switch to the new gear? Write a paragraph explaining why or why not.

Procedures

1. Display Visual 8.1 as the students are entering the classroom.
2. Discuss the following:
   1. Do you think you could earn a million dollars? (Allow the students to speculate.)
   2. Who can define the word “earn”? (Record student responses on the board.) Let’s summarize these suggestions by saying that earnings are what a person gains when he or she performs work. (Write this definition on the board. An example might be “A person earns $25 for mowing a lawn.”)
   3. What type of work do you think it would it take to earn a million dollars? (Allow the students to brainstorm their ideas and record them on the board. Answers may include professional athletes, doctors, scientists, winning the lottery.)
   4. Today we will discover a foolproof method for earning a million dollars. Direct each student to bring his or her calculator, a pencil and a sheet of paper to the front of the room. Push all the desks back from the center of the room, leaving yourself a clear path to the board (see room layout). With a roll of masking tape, lay down a line that splits the room in half.
3. Divide the students evenly into the two zones and ask them to sit down on the floor.
4. On the board, draw a line to divide the space in half. Write the word “EDUCATION” on the left side and the word “EARNINGS” on the right side. Explain that the room is divided in the same way, with the students in the left zone representing education and the students in the right zone representing earnings.
5. Ask for a definition of education from the students in the education zone and record responses on the board under the word “EDUCATION.” (Learning, years in school, college.)
6. Ask for a definition of earnings from the students in the earnings zone and record responses on the board under the word “EARNINGS.” (The amount of money received in a period of time in exchange for working.)
7. Announce that the students will receive a playing card representing his or her zone. Distribute an education playing card to each student in the education zone and an earnings playing card to each student in the earnings zone. Ask the students to read their cards quietly.
8. Announce that each card has a match in the other zone. Direct the students to find their partners in the other zone and to sit down together in either zone.
9. Once everyone has a settled, ask each pair to calculate the yearly earnings for the person on their card.
10. Allow a few minutes for this activity; then ask if anyone has an easy procedure for turning hourly earnings into earnings for a whole year. (Write student procedure on the board. Examples: For eight hours in a working day, 5 days in a week, 52 weeks in a year, the procedure would be to multiply [(hourly earnings)*(8)*(5)*(52)].)
11. Determine a standard procedure. (Do people actually work every day of the year and should we consider giving our people two weeks of vacation?) How many weeks should we multiply by? (50) Ask each group to use the same procedure.
12. Take another piece of masking tape and divide the room into fourths (see the room layout suggestions at the end of the lesson). Using additional pieces of tape, label the four zones, I, II, III, IV. Instruct each pair of students to occupy one of the four zones based on their level of education. Zone I, not a HS graduate; Zone II, HS graduate; Zone III, some college; Zone IV, college graduate.
13. Within each zone, ask the students to use their math skills to summarize the earnings data for everyone in their zone by following the instructions on the back of their earnings playing card. (Students are directed to formulate the range, median, and mode for the yearly earnings levels represented in their group.)
14. On the board, create four columns labeled Zone I, Zone II, Zone III, and Zone IV. Ask a representative from each zone to record his or her summary data in the appropriate column.
15. Ask each pair of students to predict what the data on the board represents and to write this prediction on a piece of paper.
16. Ask the students to help you reassemble the room and sit with their partners. Distribute Activity 8.1 and instruct each pair of students to follow the directions in completing a scatter plot of the educationearnings data.
17. Once the students have finished with their scatter plots, display Visual 8.2 and discuss Activity 8.1. (Visual 8.2 shows answers to “Yearly Earnings” in Activity 8.1.)
18. Discuss the following:
    1. Who had a person in Zone I? (Select a pair of students.) How much education did your person have? (Not a high school graduate.) What do you think would be the best way for your person to move into Zone II? (Get a High School diploma; if the response is “earn more money,” be sure to ask how the person could earn more money.)
    2. What about moving from Zone II to Zone III? Why would a person want to move from Zone II to Zone III? How do you move from Zone II to Zone III? (Make more money; improve your lifestyle, etc. Get more education.)
    3. Yes, more education is a key to moving from a lower Zone to a higher Zone; it is the key to earning higher income. In other words you’ve got to “Learn to Earn.” (Write “Learn to Earn” on the board.) People who move from a lower zone to a higher zone, getting more education and learning new skills, are actually improving something we call human capital. (Write “Human Capital” on the board.)
    4. Has anyone heard of the word “capital” before? (Responses may include things like capital cities.) Your capital, your human capital, the skills you bring to the workplace. (Write this definition under “Human Capital”)
    5. Improving your human capital is a key to moving from a lower zone to a higher zone; it is the key to improving your earnings. When you learn a new skill, you have the potential to gain higher earnings.
    6. At the beginning of the period, I asked if you could earn a million dollars. Well, given the earnings we have investigated today, which zones include people capable of earning a million dollars over their working lifetimes? (Allow speculation.)
    7. Let’s see if you can calculate a lifetime of earnings for the person on your card. How many years do you think people work in their lifetimes? (Allow speculation.) Suppose we say that the average person has 40 years to work. Could you calculate how much your person would earn, in total, in those 40 years? (Multiply the yearly earnings by 40.)
    8. Okay, which cards will earn a million dollars over 40 years? (Zone III people are close and everyone in Zone IV.)
    9. Do you have to be rich and famous to earn a million dollars? (No, just go to college.)

State the following:

• People use their human capital to earn a living, and the ability to earn is based on education. You must learn to earn, and the key to earning a good living is to improve your human capital.
• On a piece of paper, I want you to explain how you would move your playing card person to the next zone using our new vocabulary words earnings and human capital. (Allow several minutes for students to write their statements.)
• Who will share their summary statement? (An example might be, Skyler could improve his human capital by getting his GED. With a GED, Skyler could find a better-paying job and increase his earnings.)
• Distribute Activity 8.2 for homework. (Answers are given on Visual 8.3.)

No extension activity available at this time.

Activity 8.2