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The Plunging Rupiah
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SiThep



Joined: 30 May 2013
Posts: 39
Location: Thailand
PostPosted: Mon Sep 16, 2013 8:52 am    Post subject: The Plunging Rupiah Reply with quote
I noticed that the rupiah has been in real trouble lately. It's down around 11,400 rupiah to the dollar. That means a teacher on 7 million rupiah a month at EF is only getting $613 a month. That's just not enough.

Any news if schools are lifting wages to respond to the weaker Indonesian currency?
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plumpy nut



Joined: 12 Mar 2011
Posts: 1652
PostPosted: Mon Sep 16, 2013 12:31 pm    Post subject: Reply with quote
Go Go Go!

I need to take a vacation there soon. Laughing
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p1randal



Joined: 23 Jun 2008
Posts: 84
PostPosted: Tue Sep 17, 2013 12:45 am    Post subject: Reply with quote
Why would they? The plunging rupiah only has an impact if you are sending money back home (U.S.A, Canada, etc) the buying power inside of Indo hasn't really been changed. In their defense I wouldn't change unless I couldn't get people to accept jobs at that price. The bigger question is why would anyone take a job making 7 million rupiah?
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bradleycooper



Joined: 12 Apr 2013
Posts: 310
PostPosted: Tue Sep 17, 2013 7:06 am    Post subject: Reply with quote
p1randal wrote:
Why would they? The plunging rupiah only has an impact if you are sending money back home (U.S.A, Canada, etc) the buying power inside of Indo hasn't really been changed. In their defense I wouldn't change unless I couldn't get people to accept jobs at that price. The bigger question is why would anyone take a job making 7 million rupiah?


Inflation has now spiked to between 8-9% at the same time (due partly to the weaker rupiah and partly to the rising cost of petrol). That means by the end of a 12-month contract your Rp 7.000.000 will have 8% less purchasing power than when you started. Mind you, inflation has averaged 6% over the last decade, meaning that the EF wage is already some 60-70% worse than it was in 2004. (Many branches paid around Rp 7.000.000 back then, too).

Indonesia is really becoming less and less competitive in terms of wages here. EF China pays at least $1000 a month and now some EF Indonesia branches are offering only $600-$750 a month. You wonder how they still get anyone interested in this deal. I mean if you just saved $3600 at home you would now have half a year's wages at EF Indonesia. Why does anyone bother to work there?
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jef dam



Joined: 27 Apr 2010
Posts: 79
PostPosted: Tue Sep 17, 2013 12:33 pm    Post subject: Reply with quote
p1randal wrote:
The bigger question is why would anyone take a job making 7 million rupiah?


Needs must, boss. EF is a foot in the door and, for better or worse, it's 12 months of valuable experience in a pressure free environment. It's an okay gig for new teachers and backpackers. I've been vocally critical of EF on here in the past, and I stand by my criticisms, but a sense of perspective is necessary when talking about teaching jobs that offer such low salaries.

The rupiah is the weakest I've seen it in the four and some years I've been here, not even 6 months ago it was roughly 11,000 to the Euro, it's now at nearly 16,000. I know an elderly lad who has been here for nearly 30 years. When speaking to him recently he made the point that there was a similar crash in the value of the rupiah in 1998 in the months leading up to the fall of Suharto. Hopefully this current drop in the currency isn't foreshadowing something much bigger and entirely more unpleasant.
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Puppets



Joined: 02 Feb 2013
Posts: 30
Location: Indonesia
PostPosted: Tue Sep 17, 2013 12:44 pm    Post subject: Reply with quote
Prices in the Jakarta area which includes Bekasi, Depok, Tanggerang and Bogor have definitely gone up considerably recently. This is due to both the weakening of the currency and the increase in petrol prices.

I know some Language Schools have increased their salaries but I'm not sure exactly how much or how much impact the increases have had.

English First have increased their salaries recently in Bogor and Jakarta but it's hardly substantial. I think the current exchange rates make the salary around £500 a month in Bogor and around £600 a month in Jakarta which while an improvement on the previous rates is hardly competitive.

I know from experience now that if you want to live well in Jakarta, by that I mean have a decent apartment, have money to spend each month on a few luxuries then around 12million a month should be the starting salary that most companies should be looking at which is £660 a month.

I know many teachers on around 10 million a month in Jakarta and they are struggling by payday. It's not that they live excessively it's just that Jakarta is expensive at the moment.
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bradleycooper



Joined: 12 Apr 2013
Posts: 310
PostPosted: Tue Sep 17, 2013 3:16 pm    Post subject: Reply with quote
Puppets wrote:
Prices in the Jakarta area which includes Bekasi, Depok, Tanggerang and Bogor have definitely gone up considerably recently. This is due to both the weakening of the currency and the increase in petrol prices.

I know many teachers on around 10 million a month in Jakarta and they are struggling by payday. It's not that they live excessively it's just that Jakarta is expensive at the moment.


This is a good and informative post. Thanks, Puppets. I think that info will be useful to TEFL newcomers.
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bradleycooper



Joined: 12 Apr 2013
Posts: 310
PostPosted: Tue Sep 17, 2013 3:17 pm    Post subject: Reply with quote
The "foot in the door" cliche doesn't make much sense in terms of Indonesia these days. There was an article in the Jakarta Post yesterday where the Department of Manpower were celebrating the fact that the number of expats in Indonesia is down from 77,000 to 48,000 since 2011. They eagerly mentioned that there will be new regulations next year which will get rid of even more unwanted foreigners, replacing them with Indonesians. The reality is that there are fewer and fewer positions for people in Indonesia and the easy-to-get jobs are paying peanuts. I suppose one could work at "Rumah Bahasa" (see recent thread) where even the "school manager" is on a touri