Fewer Workers, More Output

Imagine a small economy with two types of jobs, skilled and unskilled.
You have 20 workers, 10 skilled and 10 unskilled.
Skilled workers produce $100,000 a year. Unskilled produce $10,000 a year.


all are employed so unemployment is 0%.

Total output is $1,100,000.

Recession hits.
Things get shuffled a bit.
You end up with 11 skilled working and only 7 unskilled working. (one unskilled went to school and became skilled).

Now there are two unemployed so unemployment is 10%.
But the total output is now $1,170,000, an increase of 6% in output.

Here is one way that output can be larger with fewer workers. I am sure there are many other possible reasons why this could be.

In our economy the number of workers working has declined by around 7% but output has declined by only about 1%. It is no mystery to me that less productive workers would be let go during recession. Thus the decline of output would always be less than the decline of employment.