The Economics of Thai and Indonesian TEFL Wages in 2014

One thing that people never seem to discuss much in terms of TEFL wages and conditions is the basic economics of supply and demand. The industry, like any other, responds to the amount of labour available. If there are more Native Speaker teachers who want to live in a particular area that will exert a downwards pressure on wages. If there is a scarcity of teachers, schools will have to up wages to try and attract more of them. While people know this intuitively on one level, it is rarely discussed as much as it should be. Allow us to demonstrate this with some examples from around the TEFL world.

About a decade ago I worked with a highly professional Australian educator and translator who had taught English in several countries in Europe and Asia. She spoke fluent Indonesian, French and Italian and had lived in Italy for several years. She said that because of the popularity of Italy among Westerners- the food, the wine, the countryside and culture- it meant that many Italophiles were willing to work there for low pay. She said you could find jobs that paid the rent and the grocery bills, but no one had much money to spare. Basically, if a lot of people want to live somewhere, this increases the supply off teachers, which drives down wages. This is the reason that it is hard to find decent-paying jobs in the islands of Thailand, too. People will be willing to accept lower pay to live in somewhere they consider “paradise on Earth”. (My idea of paradise doesn’t consist of binge-drinking Millennial kids on their gap year, even if the waters are ‘crystal clear’, but many beg to differ.)

What about at the other end of the spectrum? What about places that are highly unappealing to most Western sensibilities, which also have a lot of rich people who want to learn English? Welcome to Saudi Arabia. While visions of Tuscan poppy fields and red wine appeal to many Western tastes, few Westerners dream of living in an alcohol-free compound in the middle of the sand dunes of Arabia. So what is the result? Saudi Arabia has to pay probably the highest wages in the TEFL world to get enough teachers. Jobs for people with Bachelors Degrees average around $3500 tax free per month, and for people with a Masters in TEFL or some such, you can ask upwards of $4500- $5000 in many places. The laws of supply and demand make Saudi wages sky-high.

Interestingly, in the last few years, the China TEFL market is starting to look more like Saudi Arabia and less like Southern Thailand. With its massive 1.4 billion people, China simply has too many schools that want Native Speaker teachers. It is also increasingly affluent, especially in the big Eastern cities, so the market is able to bear high salaries for TEFL teachers. The result has been a dramatic spike in TEFL wages in the Middle Kingdom. Many schools now pay $2000 a month plus perks. This means that TEFL teachers in China teachers now often get three times more money than TEFL teachers in Indonesia, where wages are stuck at a paltry $800 a month at many schools. Demand for TEFL teachers in China has outstripped supply, meaning that wages are now in an upward spiral.

What does this mean for the industry in Southeast Asia, where regulations are being tightened everywhere? As we have argued before, if you make regulations tighter, you rule out many possible candidates. Almost anyone with basic communication skills can get a TEFL certificate, even a CELTA. Their policy is to fail very, very candidates. But a degree from a university is a big investment in time and money. No one is going to spend 4 years at university, running up tens of thousands of dollars in student debts, all for the pleasure of working for $500 a month at Rumah Bahasa or $750 a month at TBI Bogor. Therefore, schools that want to operate within the law will have to raise wages substantially to attract university graduates.

Wall Street Indoensia (WSI) saw the writing on the wall in 2010 and upped wages from around Rp 12.000.000 a month to around Rp 16.000.000 to Rp 17.000.000 in response to new regulations. It was a smart move. They attracted enough graduates to comply with the laws and gain a clean reputation. They can recruit enough teachers not only to staff existing schools but to expand aggressively. In 2014 they will soon open new branches in Bandung (Paris Von Java) and Bintaro. More are in the pipeline. In contrast, TBI’s greedy, nepotistic leaders like Ning Anhar and Mariam Kartikatresni stubbornly refused to up TBI wages. These women had long used TBI as a cash cow; and higher wages for teachers meant, in their short-sighted, money-hungry view, less shopping trips to Grand Indonesia Mall. What was the result?

In 2014 even their best-known school, the former flagship TBI Kuningan, still employs teachers illegally on VKU visas and flies people in and out of Singapore every couple of months. TBI now relies increasingly on unqualified people with no degree or even CELTA. Like Rumah Bahasa, they have decided to rely on visa scams and other shonky dealings to staff their schools. Their so-called “teachers” are often just White faces who want to stay in Indonesia with their girlfriends and wives. In these bottom-feeder schools like TBI, any “bule” (Whitie) with a pulse will do, and they merely pay off corrupt officials to flout the law.

Finally, let’s go back to Thailand. They have recently announced that they will demand Native Speaker  teachers have at least 24 units of education subjects in their degree. This is part of a push to raise low standards in Thailand’s poor-performing government schools. But allow us to suggest that the Thai government hasn’t thought this through properly. 30,000 baht a month is enough to attract teachers with only a TEFL certificate, but will it be attractive to university graduates in Education? The experience from Indonesia suggests not. Uni graduates can earn twice that amount easily working in private or international schools around the region. I doubt most Education grads will accept $950 a month to teach classes of 55 kids in Thai government schools when they could make twice that teaching 25 kids per class in private schools. Unless Thai schools offer substantially more than 30,000 baht a month to Education grads, we foresee problems staffing Thai government schools in the future. Perhaps they will rely more on Filipinos instead, who they can get away with paying 15,000 to 20,000 baht. We’ll have to see.

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