The Economics of TEFL: Very Low-Income Countries

Last week we discussed the economics of TEFL wages, and showed how the tight new DIKNAS regulations have resulted in wage inflation for schools who follow the law eg. Wall Street. We also showed how the economic fundamentals of supply and demand are the most important factor in determining wage levels across the industry as a whole. Southern Thailand can pay low salaries because many expats want to live there. In contrast, Saudi Arabia has to pay through the teeth to get qualified teachers to live in compounds in the desert. But there was one aspect we didn’t address. What about very low-income countries? Why do you almost never see TEFL jobs in Kyrgyzstan or Madagascar, for example?

There are a number of factors which need to exist before a “Native Speaker” TEFL industry emerges. The most important is that there needs to be a sizeable middle class with enough discretionary spending money to make “extra” classes seem affordable. In many African countries, for example, there is just a tiny government and business elite and the majority of the population is engaged in subsistence farming. When you find a tiny ruling class presiding over a poorly fed and poorly educated population, you will find few if any TEFL jobs. To phrase it another way, there is actually not much a market for TEFL academies to sell to, as most of the population use their money for basic survival purposes and there isn’t much extra to go around. You might find the odd private school for the kids of the elite, but they will mostly employ fully qualified teachers- not TEFLers with a 120-hour certificate, and there are only a small number of positions in the whole country.

What are the other factors? There are socio-cultural factors as well. Many Latin American countries now have a large middle-class but you still see few jobs. Brazil is one such example. Here we have the fifth most populated country in the world, which has had some impressive economic growth over the past decade, but TEFL jobs are still rare as hen’s teeth. There are a couple of reasons for this. One is that governments in Latin America are very restrictive generally in issuing work visas to foreigners. For instance, in 2012 Paraguay issued tough new regulations making it all but impossible for TEFL teachers to work there. To get a visa you need to pass a fluency test in both Spanish and Guarani! Much of Latin America is quite Left-wing in its political leanings and governments want to be seen to be protecting local workers. 

The other factor in Latin America is the role of Spanish as a world language. Latin America often prefers to do business with its neighbours, which can handily be done in Spanish. Portuguese-speaking Brazil is the exception here, but Spanish and Portuguese speakers can also communicate very well. While it is now important for many Indonesian corporate workers to be able to speak English so they can do business with people in Malaysia, Singapore or Japan, in Latin America most regional business can be done in Spanish. There is simply less need for English among the middle-classes there.

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