The Curious Case of the Flatlining Eikaiwa Salary
English teaching salaries in Japan have gone nowhere for the last 15 years. Why?
In July 2012, the Japan Times published an article called “The Curious Case of the Eroding Eikaiwa Salary”, detailing the fall in wages for English teaching positions since the bursting of the bubble economy at the beginning of the 1990s. The 1990s may have seen the erosion of the eikaiwa (English conversation) school salary, but they have continued to erode in real terms since then (by about 9 percent since 2007). In nominal terms however, they have remained pretty flat during the 2000s:
English language teaching pay is somewhat unusual in that part-time positions have a higher pay per hour than full time ones. A full-time worker typically earns about 1,500 yen per hour, whereas part time workers usually earn about 2,000 to 4,000 yen per hour, depending on the type of teaching.
In most industries in Japan, the reverse is true, part-timers earn less than full-timers. In the wholesale and retail industry for example, the average full-time worker earns about 2,000 yen per hour, whereas a part-timer worker only earns about 1,200 yen per hour. Part-time English teaching jobs tend to be far from the nearest teacher, meaning a long commute to and from the job needs to be factored into the pay.
We saw in previous articles that part-time wages have been pushed up much faster than full-time wages in most industries in Japan. The opposite seems to be true for the English language teaching industry. Wages for the basic part-time jobs seem to have been pushed down from over 2,500 yen per hour to around 2,000 yen per hour. Corporate teaching part-time jobs have flatlined at around 3,500 yen per hour.
ALT salaries too have been pushed down too, from around 250,000 yen per month to around 230,000 yen per month now. Competition between different ALT employment agencies for cheaper and cheaper local government contracts is probably responsible for this.
Eikaiwa and “international” kindergarten jobs have seen their salaries level over the period from 2007 to now. There has been a big growth in “international” kindergarten jobs over the last few years compared to eikaiwa jobs.
The flat nominal salaries and gradually falling real salaries reflect the pattern in most other industries in Japan during the early 2000s. Within the profession, complaints abound that the labour market for foreign English teachers is “saturated”. How true is this?
It’s unlikely there is a large surplus labour pool of unused foreign English teachers hanging around because a big portion of potential foreign English teachers are on visas that wouldn’t be renewed if they didn’t have a job. This probably keeps the job-to-applicant ratio at about 1:1 — far from saturated.
On the other hand, the supply of labour for foreign English teaching positions has steadily increased in recent years:
The total number of foreign residents in Japan on English-teaching-related visas does seem to have peaked with Covid. Meanwhile some other trends become clear: the number of native speaker residents on these kind of visas is slowly falling, and the number of non-native speaker residents (Filipinos) is rising steadily.
This is especially true in the SHIS (Specialist in Humanities and Information Services) visa category:
It’s likely that this year (2024) the number of non-native speakers1 (excluding engineers) on SHIS visas will surpass the number of native speakers on that visa category. This probably reflects the rise of “international” kindergartens and preschools which typically prefer female, qualified applicants and the decline of traditional eikaiwa schools.
For those on the instructor visa category, the same trends are apparent, but much less pronounced than for the SHIS visa category:
This is the labour supply side. What’s the situation on the labour demand side?
It’s difficult to assess demand for labour in the English language teaching industry, but by using the Way Back Machine and Gaijinpot results, a rough picture emerges. Demand appears to slump following the bankrupty of the Nova and Geos eikaiwa chains in 2007 and 2010. Then recovers as the hangover of visa holders from the eikaiwa boom years up to 2007 disappears, and teaching English to elementary-school-age kids takes off. This peaks in 2016, with a subsequent decline since then in demand for foreign English teachers.
There is a noticeable decline in the number of corporate part-time positions since Covid, although wages have held up for the remaining positions. These types of jobs have almost certainly been impacted by the rise of online lessons during the Covid emergency. Online lessons have probably also had a big impact on the numbers of adult eikaiwa positions.
Falling demand and, until recently, a rising supply of workers has helped reduce the wages for foreign English teachers. Overall, it seems unlikely that wages for foreign English teachers will recover anytime soon.
Non-native speakers refers to Filipinos only, doubtless there a many other groups of non-native speakers on these visas, but Filipinos make up the bulk of them, so I only used their statistics. Native speakers refers to those from the US, Canada, the UK, Australia and New Zealand (apologies to those from South Africa and the Republic of Ireland, it was difficult to get the data to exclude engineers from these countries)
It’s kind of a more socio-cultural question rather than economic but I wonder what keeps anyone doing eikawa for these wages.
This is an interesting case study. Tell us more about the possible decline in demand. Perhaps there are simply fewer students overall. Maybe the answer can be found by segmenting the consumers of eikaiwa. You already highlighted one growth area as young children. What about trends related to other consumer segments (e.g., up-and-coming young business people subsidized by their employers, middle-aged housewives, retired people who consider eikaiwa as a hobby, etc.)?