|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
sigmundsmith
Joined: 22 Nov 2007
|
 Posted: Sun Jun 01, 2008 4:43 pm Post subject: |
 |
|
I'm not an economist but according to the definition of economy, it is the
| Quote: |
| Activities related to the production and distribution of goods and services in a particular geographic region. |
Mr Kim wants to open an English hagwon, he rents a building so gives money to a landlord. Then pays renovators to decorate his new English Zoned classrooms.
Once finished, employs an administrator and some Korean teachers to get little Minsu and Mina to come to his classes. Plus, he needs to buy a hagwon bus and a driver to transport his new students from home to class.
Now the important thing that he needs is a good old faithful foreign English teacher (preferably white, female, North American) as this is what Mr Kim will need to keep his hagwon running. So he contacts and pays a recruitor to find that special teacher.
Teacher agrees. Mr Kim pays Korean Air to fly the new teacher over.
Once here. The new teacher needs a place to stay. So kind Mr Kim finds an apartment. But no furniture etc. So Mr Kim takes new foreign teacher to E-Mart and buys bed, table, fridge etc.
Now new foreign teacher is settled in and because they are so young and pretty/handsome many Mom's pay each month to send their darling children to Mr Kim's English hagwon.
Each month Mr Kim pays new foreign teacher 2 million won. Maybe new foreign teacher sends half of that money home. But the other half is spent buying the occassional drink, eating at Macdonalds or after too many drinks finding a nice Korean girl who charges a reasonable rate by the hour.
To me, I think a lot of people who have posted here are looking at this too simplistically. Because of the service and skills we provide, the economy that we are involved in stimulates and moves capital.
If English education wasn't big in the country would they find other means/methods to invest their money? Of course. But that could be said with any industry.
That is how any economy works. It is the movement of capital and how vibrant and economy is.
Do we as FT's contribute to this? Too right we do! |
|
| Back to top |
|
 |
RJjr
Joined: 17 Aug 2006
Location: Turning on a Lamp
|
| Posted: Sun Jun 01, 2008 4:52 pm Post subject: |
|
|
| I think Korea probably loses money on foreign teachers. |
|
| Back to top |
|
|
skeeterses
Joined: 25 Oct 2007
|
| Posted: Sun Jun 01, 2008 7:56 pm Post subject: |
|
|
Maybe I can shed some light on what the OP is trying to say.
First off, in any economy, you do need people to provide and sell services. Making widgets and growing vegetables is not the only way to measure a country's living standard. In this world, you need doctors, teachers, lawyers, policemen, firemen, mechanics, plumbers, and so forth. The problem arises when a country doesn't make any products and uses the service industry to substitute for producing things.
With the ESL Industry, I think what the OP is trying to say is that there are too many ESL Hagwons competing for too few customers. If there are a lot of children, naturally you need to have a lot of teachers. But you can only have so many teachers. One thing about children is that they can only spend so much time in school, and need free time after school in order to enjoy their childhoods. Otherwise, they just get burned out from all the academic pressure. And from an economic viewpoint, we run into diminishing returns on investment. If there's an English hagwon on every street corner and most of the kids go to these English hagwons, the question has to come up on whether the families of these students will ever see a return on the educational investment. Because the truth is, not every student will be able to go to a top university and get a high paying job with a Corporation or the Government. |
|
| Back to top |
|
|
Beej
Joined: 05 Mar 2005
Location: Eungam Loop
|
| Posted: Sun Jun 01, 2008 7:58 pm Post subject: |
|
|
| skeeterses wrote: |
Maybe I can shed some light on what the OP is trying to say.
First off, in any economy, you do need people to provide and sell services. Making widgets and growing vegetables is not the only way to measure a country's living standard. In this world, you need doctors, teachers, lawyers, policemen, firemen, mechanics, plumbers, and so forth. The problem arises when a country doesn't make any products and uses the service industry to substitute for producing things.
With the ESL Industry, I think what the OP is trying to say is that there are too many ESL Hagwons competing for too few customers. If there are a lot of children, naturally you need to have a lot of teachers. But you can only have so many teachers. One thing about children is that they can only spend so much time in school, and need free time after school in order to enjoy their childhoods. Otherwise, they just get burned out from all the academic pressure. And from an economic viewpoint, we run into diminishing returns on investment. If there's an English hagwon on every street corner and most of the kids go to these English hagwons, the question has to come up on whether the families of these students will ever see a return on the educational investment. Because the truth is, not every student will be able to go to a top university and get a high paying job with a Corporation or the Government. |
SSHH. Dont tell Korean parents that. We'd all be out of a job. |
|
| Back to top |
|
|
jkelly80
Joined: 13 Jun 2007
Location: you boys like mexico?
|
| Posted: Sun Jun 01, 2008 7:59 pm Post subject: |
|
|
| skeeterses wrote: |
Maybe I can shed some light on what the OP is trying to say.
First off, in any economy, you do need people to provide and sell services. Making widgets and growing vegetables is not the only way to measure a country's living standard. In this world, you need doctors, teachers, lawyers, policemen, firemen, mechanics, plumbers, and so forth. The problem arises when a country doesn't make any products and uses the service industry to substitute for producing things.
With the ESL Industry, I think what the OP is trying to say is that there are too many ESL Hagwons competing for too few customers. If there are a lot of children, naturally you need to have a lot of teachers. But you can only have so many teachers. One thing about children is that they can only spend so much time in school, and need free time after school in order to enjoy their childhoods. Otherwise, they just get burned out from all the academic pressure. And from an economic viewpoint, we run into diminishing returns on investment. If there's an English hagwon on every street corner and most of the kids go to these English hagwons, the question has to come up on whether the families of these students will ever see a return on the educational investment. Because the truth is, not every student will be able to go to a top university and get a high paying job with a Corporation or the Government. |
I think you make a good point, but that's not what the OP was saying. |
|
| Back to top |
|
|
skeeterses
Joined: 25 Oct 2007
|
| Posted: Sun Jun 01, 2008 8:47 pm Post subject: |
|
|
I can see what the other posters have pointed out, but we still have to think about what the actual returns on investment are here.
Hagwons do generate a lot of economic activity. But if parents are spending substantial amounts of money on their childrens' education and the kids are not getting high paying jobs after graduation, we end up with a situation where the education system is propped up by debt, which is not economically sustainable. |
|
| Back to top |
|
|
Kimchieluver
Joined: 02 Mar 2005
|
| Posted: Sun Jun 01, 2008 9:07 pm Post subject: |
|
|
| pkang0202 wrote: |
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'. |
Spot on. |
|
| Back to top |
|
|
bogey666
Joined: 17 Mar 2008
Location: Korea, the ass free zone
|
| Posted: Sun Jun 01, 2008 9:25 pm Post subject: |
|
|
| Kimchieluver wrote: |
| pkang0202 wrote: |
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'. |
Spot on. |
correct.
we don't create money.. that is created by the CENTRAL BANK - which controls the printing presses and how much money, (or use gauges like M1, M2, etc) is in the system.
but our spending it (or not spending it) DOES contribute to the economy as a whole.
the hogwan situation is a little different than PS (where this is part of public spending/financing) Each hogwan owner is investing in a business. His invesment stimulates the economy because he's paying money to you. paying money to KAL to fly your ass over here... paying a landlord to rent an appt, paying money to feed you a meal at school (when applicable).. paying money for administrative staff.. paying money for books, materials, etc. |
|
| Back to top |
|
|
Pete82
Joined: 12 Apr 2008
|
| Posted: Sun Jun 01, 2008 10:11 pm Post subject: |
|
|
...
Last edited by Pete82 on Mon Aug 03, 2015 7:57 am; edited 1 time in total |
|
| Back to top |
|
|
Rumple
Joined: 19 Sep 2007
|
| Posted: Sun Jun 01, 2008 11:19 pm Post subject: |
|
|
| matthews_world wrote: |
NETs are less than 1% of the total population here on the peninula.
What exactly is your point OP? |
My point is that moosehead's post, where he says
| Quote: |
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. |
Is incorrect. Money paid to NETs that they spend in Korea does not contribute to the Korean economy.
That's pretty much my only point. |
|
| Back to top |
|
|
Rumple
Joined: 19 Sep 2007
|
| Posted: Sun Jun 01, 2008 11:24 pm Post subject: |
|
|
| bogey666 wrote: |
correct.
we don't create money.. that is created by the CENTRAL BANK - which controls the printing presses and how much money, (or use gauges like M1, M2, etc) is in the system.
but our spending it (or not spending it) DOES contribute to the economy as a whole.
the hogwan situation is a little different than PS (where this is part of public spending/financing) Each hogwan owner is investing in a business. His invesment stimulates the economy because he's paying money to you. paying money to KAL to fly your ass over here... paying a landlord to rent an appt, paying money to feed you a meal at school (when applicable).. paying money for administrative staff.. paying money for books, materials, etc. |
The hagwan owner gets his money from Korean parents. Then he gives it to you. Then you buy things, returning it to Korean businesses. Then they pay their employees, who buy another month for their kids in hagwan. Then the hagwan owner pays you again. Where in there does it appear we are stimulating the economy by giving money back to the economy that gave it to us in the first place? |
|
| Back to top |
|
|
Rumple
Joined: 19 Sep 2007
|
| Posted: Sun Jun 01, 2008 11:25 pm Post subject: |
|
|
| Pete82 wrote: |
| You also have to take into account reciprocity - Koreans working overseas who send money home, which imo certainly offsets any sort of imbalance that may occur. |
That's a good point.
| Pete82 wrote: |
| I don't know the figures for how much Koreans living/working abroad send back (and those populations are pretty significant), but I do know foreign-based Chinese communities send an ungodly sum back to China every year. |
Yeah, Filipinos too. And pretty much all the other migrant workers as well. |
|
| Back to top |
|
|
Ilsanman
Joined: 15 Aug 2003
Location: Bucheon, Korea
|
| Posted: Sun Jun 01, 2008 11:27 pm Post subject: Re: The NETs are NOT doing the Korean economy a favor |
|
|
By your estimation, accepting Korean immigrants to our countries is a bad idea. Let's reject them all.
We may need a lesson in economics, but you need one in common sense.
| Rumple wrote: |
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. |
|
|
| Back to top |
|
|
bogey666
Joined: 17 Mar 2008
Location: Korea, the ass free zone
|
| Posted: Sun Jun 01, 2008 11:32 pm Post subject: |
|
|
| Rumple wrote: |
| bogey666 wrote: |
correct.
we don't create money.. that is created by the CENTRAL BANK - which controls the printing presses and how much money, (or use gauges like M1, M2, etc) is in the system.
but our spending it (or not spending it) DOES contribute to the economy as a whole.
the hogwan situation is a little different than PS (where this is part of public spending/financing) Each hogwan owner is investing in a business. His invesment stimulates the economy because he's paying money to you. paying money to KAL to fly your ass over here... paying a landlord to rent an appt, paying money to feed you a meal at school (when applicable).. paying money for administrative staff.. paying money for books, materials, etc. |
The hagwan owner gets his money from Korean parents. Then he gives it to you. Then you buy things, returning it to Korean businesses. Then they pay their employees, who buy another month for their kids in hagwan. Then the hagwan owner pays you again. Where in there does it appear we are stimulating the economy by giving money back to the economy that gave it to us in the first place? |
the economy is stimulated when money circulated thru it. THe more people that benefit from that money circulating, the better off for everyone (except I suppose the original payee)
how did the Korean parents get the money? It wasn't just handed to them. Where is the "beginning' exactly? it's quite possible that they got it by renting out an appt for waygookin for other hagwon or PS schools in the past... or by selling goods/services that were at least sometimes used/purchased by waygookin. |
|
| Back to top |
|
|
endo
Joined: 14 Mar 2004
Location: Seoul...my home
|
| Posted: Mon Jun 02, 2008 12:27 am Post subject: |
|
|
| pkang0202 wrote: |
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'. |
So is debt (good and bad) also necessary for an economy to work?
You have so many people nowadays purchasing goods on credit. This obviously is contributing to the economy as more goods are purchased when customers are given credit or money outside their current means.
Basically, what I'm trying to find out is weither or not extreme debt is good or bad for an economy?
If everyone paid off their credit cards and cut them up (never to use them again - or at least be able to pay them off every month) would a nations economy be better or worse off? |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
