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Rumple
Joined: 19 Sep 2007
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 Posted: Sun Jun 01, 2008 4:16 am Post subject: The NETs are NOT doing the Korean economy a favor |
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Mmmkay. We were hijacking a thread, so I'm moving this here. Someone with an economics background, please tell this guy he misunderstands the situation...
| moosehead wrote: |
| Rumple wrote: |
| moosehead wrote: |
there really needs to be a clear understanding - as in visual aids of graphs and charts - as to how many billions of won are contributing to the K economy, much of which comes out of the FT's pocket.
it's not just our salaries, folks, it's the housing we live in, the utilities we pay, the food we buy and the tourism dollars we spend. |
Actually, money paid to us by Korean employers, that we spend in Korea is not contributing to the Korean economy. That money was already here in the economy. We're just swirling it around a bit. To contribute money to an economy is to take money out of one economy and put it into another, which is what foreign investors do, and what WE do when we pay off our student loans and other debt back home. So actually, it is more likely that we're taking money out of the economy than adding to it. |
hmm, that's so convuluted I'm not even sure where to address it but just to keep it simple -
look at Itaewon - how on earth would ever be what it is w/o the foreigners there who eat drink and be merry?
it's common knowledge on Wall Street cab drivers are the first to be hurt when the economy heads downward - why? because bankers start cutting corners, and cab fare is one of the first to get cut.
most certainly the NET contributes to the economy - the smaller the area we are in, the more significant the impact. Not only directly, but indirectly as when we arrive whether in a ps or hakwon, the impetus increases for more E instruction, hence it's better for the local teaching establishments, which in turn might drive the need for more NETs.
Our own personal requests for familiar foods and recreational facilities (whatever they might be) add to that.
to wit - where would the K Herald and K Times be w/o the expat community?
SOL, for sure. |
Itaewon is not an economy. It is a collection of businesses that sell goods and services to foreigners. Yes, Itaewon is supported by foreigners, but if it didn't exist, the foreigners would eat and shop (and screw) somewhere else, and the money would still swirl.
Dude, it is very simple. Lotte makes products (actually packages and resells, but lets keep this simple). It employs Mr. Kim, and pays him a wage to manage a janitorial team at Lotte World. Mr. Kim wants his kids to have a good education, so he pays a hagwon to teach them English. The hagwan pays teachers. Teachers buy Lotte products, thereby giving the money Lotte paid Mr. Kim, BACK to Lotte.
Let's look at it a slightly different way: The Korean economy has X dollars in it. X=all the money in Korean bank accounts, under mattresses, and in pockets. How are the NETs ADDING to that? The money they are spending, they got IN KOREA. At the end of the day, the NETs don't cause even "X+$1". They are actually sending money home to pay their debts, thereby causing an "X minus a lot more than $1" situation.
To get even simpler, imagine a bucket marked KOREA. The bucket has cash in it. I'm going to pay you out of that bucket (because the money was in Korea before you got it), and then you're going to buy your food, clothing, and whatever else you spend money on, and that money you pay is going back into the bucket. Now, does the bucket have more money in it than it did before? No. And if you send some home (to another bucket marked AMERICA or AUSTRALIA or whatever), the KOREA bucket has less than before.
Let's get even simpler, just a single sentence: If there were no NETs in Korea, Korea wouldn't be paying foreign nationals over 34 billion won a year (17K E-2 visas times 2mil) to teach their kids English. Unless foreigners are spending more than they make, they aren't doing Korea any favors at all.
You need to go read a book on economics. Look up The Lexus and the Olive Tree and then come back and tell me that NETs actually ADD to the Korean economy. |
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kiwiduncan
Joined: 18 Jun 2007
Location: New Zealand
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| Posted: Sun Jun 01, 2008 4:54 am Post subject: |
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| They're vital to the fishing industry |
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Otherside
Joined: 06 Sep 2007
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| Posted: Sun Jun 01, 2008 5:27 am Post subject: |
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wow...
First off. Foriegn investment is not the ONLY way to contribute to an economy. Wealth is not finite and it can be created. If that was not the case how could the global economy grow by X% per annum.
NET's do contribute the economy. Because of me, someone is renting out their apartment, the ajosshi at the FamilyMart is making some cash off the ciggies I buy, Lotteria is selling some extra burgers, CGV is selling some extra movie tickets and so forth, perhaps small potatoes, but times by 17000 and its a notable contribution.
However, the average NET probably sends about 1/2 his paycheck home. So while he's contributing to the economy, he is in fact taking money out of the economy and that's not necessarily a positive influence on the economy. But if you and I and everyone else was to spend every won we earned in Korea, in Korea even though we didn't bring money in, we would be making a positive contribution to the economy. |
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jkelly80
Joined: 13 Jun 2007
Location: you boys like mexico?
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| Posted: Sun Jun 01, 2008 5:53 am Post subject: |
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| We're contributing in that we're teaching a skill that they use to compete for market share. And if it doesn't materialize at the pace that they desire, well, that's too bad. If you don't leave Korea or at least spent a lot of time with English speakers, that's your fault, Minju. No amount of private lessons can substitute authentic speaking situations. |
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billybrobby
Joined: 09 Dec 2004
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| Posted: Sun Jun 01, 2008 6:41 am Post subject: |
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| Otherside wrote: |
First off. Foriegn investment is not the ONLY way to contribute to an economy. Wealth is not finite and it can be created. |
Exactly.
Rumple you seem to have no understanding of economics.
First, English teachers add to the economy (hopefully) by increasing English skills and therefore making Korean businesses more competitive.
Second, they've helped create an industry. If there weren't native teachers, some students would just stay home and hagwons wouldn't get built and the wealth wouldn't get CREATED.
Your simplified version of economics overlooks the fact that wealth can be created. |
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jkelly80
Joined: 13 Jun 2007
Location: you boys like mexico?
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| Posted: Sun Jun 01, 2008 6:43 am Post subject: |
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| In most economies, wealth is finite, if taken across a national economy. It usually tops off at about 4-6% a year. |
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billybrobby
Joined: 09 Dec 2004
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| Posted: Sun Jun 01, 2008 6:47 am Post subject: |
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| You guys gotta stop thinking about the stuff you buy in Korea, because Rumble is right in that doesn't make wealth for Korea (if you are spending the money a Korean paid you). What makes wealth Korea is the fact that the English hagwon industry is partially built on your backs, and all the attendent construction, management, etc. that goes with it. With you, a guy can take a empty building, turn it into a hagwon, and start reeling in cash. |
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Underwaterbob
Joined: 08 Jan 2005
Location: In Cognito
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| Posted: Sun Jun 01, 2008 6:48 am Post subject: |
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The above and most foreigners here buy loads of imported goods anyway.
I think I'm almost single-handedly the reason our local emart keeps restocking their olives. |
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billybrobby
Joined: 09 Dec 2004
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| Posted: Sun Jun 01, 2008 6:48 am Post subject: |
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| jkelly80 wrote: |
| In most economies, wealth is finite, if taken across a national economy. It usually tops off at about 4-6% a year. |
what? |
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jkelly80
Joined: 13 Jun 2007
Location: you boys like mexico?
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| Posted: Sun Jun 01, 2008 6:53 am Post subject: |
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| billybrobby wrote: |
| jkelly80 wrote: |
| In most economies, wealth is finite, if taken across a national economy. It usually tops off at about 4-6% a year. |
what? |
In most economies, wealth is finite, if taken across a national economy. It usually tops off at about 4-6% a year. |
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billybrobby
Joined: 09 Dec 2004
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| Posted: Sun Jun 01, 2008 6:55 am Post subject: |
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| jkelly80 wrote: |
| billybrobby wrote: |
| jkelly80 wrote: |
| In most economies, wealth is finite, if taken across a national economy. It usually tops off at about 4-6% a year. |
what? |
In most economies, wealth is finite, if taken across a national economy. It usually tops off at about 4-6% a year. |
Haha. smartass. Explain what you mean by that. Are you saying it grows by 4-6 per year%? Cuz that would mean it's not finite (if by finite, we mean that it can't be created) |
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Otherside
Joined: 06 Sep 2007
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| Posted: Sun Jun 01, 2008 7:07 am Post subject: |
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| jkelly80 wrote: |
| In most economies, wealth is finite, if taken across a national economy. It usually tops off at about 4-6% a year. |
That alone proves that wealth is not finite...Wealth is being created at about 4-6% a year. Oil on the other hand is finite. There is X amount of oil left in the earth and its going to run out.
If you knew how to increase the world's oil supply by 4-6% per year you wouldn't be here typing on a forum, you'd be making the difficult decision of whether to buy a private jet, a luxury cruise liner or an island in the Caribbean, and in the end you'd settle on all three...and still have more money in your bank account than you had before you made the purchases.. |
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shifty
Joined: 21 Jun 2004
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| Posted: Sun Jun 01, 2008 7:28 am Post subject: |
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Over time the gross national product will become larger with the added skill. It's the pie, it gets bigger and bigger.
Just on sentiment alone, the pie is apt to grow. Good thing, b/c the investment is not yet met with vindication. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Sun Jun 01, 2008 4:39 pm Post subject: |
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It is really simple folks.
The economy booms when people SPEND money. It goes into recession when people DON'T spend money.
Anyone who's taken macroeconomics knows this because they tell you on day 1.
Consumers spend money -> business make money -> businesses expand -> more jobs -> more people with money -> more people spend more money
Rince and repeat. THAT is how an economy grows.
OP, you are wrong. The economy isn't a 'bucket'.
Last edited by pkang0202 on Sun Jun 01, 2008 4:49 pm; edited 1 time in total |
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matthews_world
Joined: 15 Feb 2003
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| Posted: Sun Jun 01, 2008 4:42 pm Post subject: |
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NETs are less than 1% of the total population here on the peninula.
What exactly is your point OP? |
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