Korean Job Discussion Forums

[typo]

Thanks for the long-winded, completely unnecessary and tangential review of how the prices of currencies are determined. Since you've demonstrated the ability to comprehend this level of abstraction, let's, you know, get back to your original question: whether departing EFL teachers impact the strength of the won.

Now, Goku, dear, when you dismiss the 12 billion dollar industry as irrelevant when we're talking about the impact of foreign teachers' use of money on the strength of the won, well, sweetie, the 12 billion dollar EFL industry is exactly what we're talking about.

Answer this: the money that teachers use for whatever (foreign luxury goods, domestic goods, whatever) -- where does it come from? Hint: It's the 12 billion dollar industry you've written off as irrelevant. Let that sink in--it's the answer that appears to elude you.


The only caveat you have is the amount of foreign currency teachers bring to Korea at the beginning of their stints. And considering the majority of NETs are recent college grads with little savings, the amount of won being bought is, I think for these purposes, negligible. Accounting for everything, foreigners could also be leveraging foreign assets as a source of income, but again, given the majority of NETs here, I doubt most have these foreign assets.

Your question is whether the amount of won EFL teachers command, that is, the amount of won that'll be converted into foreign currency (won being sold off) would affect the strength of the currency. That's a ridiculous question, and the fact that you're posing it seriously is, well...impressive.

I've gone through in previous posts, but I guess you'll need another iteration and don't worry, I'll oblige as I'm deskwarming for the afternoon.

We start out with 12 billion dollars, (the money being correct or incorrect doesn't really matter) and of that amount, there are a few recipients. Money goes from taxpayers and parents to taxes (which pay for the salaries of Korean english teachers), hogwons, publishing companies for EFL texts, NET teachers, and administrative costs of course.
So teachers represent one slice of that pie of 12 billion. Guess who the majority of EFL teachers are? Right you are Ken, the answer is Koreans. Koreans are the majority of EFL teachers. So foreign teachers constitute a smaller slice in the slice of teachers of the pie of 12 billion. Now of THAT number, the cash has two destinations: the salary of the foreign teacher AND a percentage of the money covers NET housing, which is not insignificant. of course, the NET has to buy food, has to entertain himself, and all this money flows back into Korean economy. So at the end of the day, we're talking about a tiny, tiny fraction of the 12 billion dollars potentially leaving Korea.

We could get a pretty good guesstimate on the amout of money and the impact on the greater Korean economy we're actually talking about if we had a few figures: # of NETs, guesstimate the average salary, and a guesstimate of average savings per NET (I'm guessing much less than 50% of their salaries, but who knows). Other information is readily available

I think it's fair to say that actual savings for foreigners is probably (assuming the 12bil is correct) less than a billion dollars of that 12 billion dollar industry. And most likely far, far, far less. (If we assume 10,000 NETs, with a total combined savings of 1 billion, that means each NET has 100k won. The more accurate number is probably 1/10th of that. Check my numbers. I prefer words/plots over numerical wizardry)



So......no: your "hypothesis" has no merit, is completely absurd, and the fact that you apparently put a lot of time and effort into it leads me to question your intelligence.
Your long, rambling sermon about banks dumping won, recession and trade volume etc is great and it has nothing to do with our point. Sad, because you clearly spent a long time on your response.




Man, I feel like that xkcd comic strip where a guy yells about someone being wrong on the Internet. And I apologize for being hypocritical. Goku's post is actually less rambling and more organized than mine.

[endo]

[Sergio Stefanuto]

[Goku]

[Cheonmunka]

What is a 'NET'?

[typo]

NET = native english teacher. I use foreign teacher, foreigner (which is bad, as we're NOT talking about the greater expat community, and ONLY english teachers), NET, and a couple other synonyms interchangeably. Sorry about that--i should have been more consistent.

[Goku]

[bassist33]

There doesn't seem to be much reason to even continue the conversation. The won is falling based on skepticism of Korean and world markets. Many currencies around the world have experienced significant drops. The return of Korean money to America by English teachers is nothing compared to the billions in electronics and automobiles that we purchase from them. I'm not sure what which country has the trade deficit, but I'm quite sure that English teachers aren't draining the Korean economy...

[typo]