The Geos bankruptcy – what’s next for eikaiwa?

(Updated to change student data)

Geos, one of Japan’s major “eikaiwa” English conversation chains, has entered the bankruptcy process (see Let’s Japan or any number of news reports for more details). Some reactions are declaring eikaiwa dead and encouraging teachers to look for employment outside Japan. It does seem like the old eikaiwa business model is not poised for a serious comeback barring a significant improvement in the Japanese economy. That said, eikaiwa as a concept and attractive learning option for Japanese people isn’t going away.

From the looks of it, some eikaiwa bankruptcies are all but inevitable. Revenue is down, and according to Nikkei “the number of language schools in operation last year remained mostly unchanged from 2008, but the number of new students enrolling in the schools plunged 35.7%.” That’s down 35% from post-NOVA levels!

Let’s see some of those numbers in graph form:

And some indicators of our own:

As overall revenues have fallen, sales of teaching materials have risen in importance, now accounting for around 10% of the language school business.

The industry overall now employs more part-time teachers than full-time, but now both categories of teacher are in decline. Not exactly a good sign for financial health or the job security of teachers.

Revenue per student has risen slightly as the average number of classes per student is down, which suggests to me a slightly lower value for the lessons.

Going forward

Paradoxically, this sort of downsizing is exactly what the industry needs, but when schools collapse so suddenly and spectacularly it scares people away and hurts business even more. Nevertheless, I would not be so intensely pessimistic as some of the commenters I have read. The initial success of these schools has created the “eikaiwa paradigm” that will live on, I think, even if all the big chain schools fall to the wayside. Just as small-time piano teachers can make good money anywhere in the world, any halfway decent teacher who can reliably provide value for his/her services can do OK. Maybe not “tens of thousands of western immigrants descend on Japan” kind of OK, but OK nonetheless. Japanese people still want to learn English and are willing to pay for it. They just can’t afford it as much anymore and don’t want to hand their money to crooks.

The problem is that these major players set up large-scale businesses that profited by essentially gouging customers – promising stellar results and pressuring them into long-term contracts only to give sub-standard lessons to people who may not have really been able to benefit from them in the first place. Now, a combination of factors – tighter laws, the bad economy, rise of the Internet as a study tool, people generally getting wise to the con – has come crashing down on Geos.What the numbers don’t show is that the major operators seem to be offering more or less the same product as before – if anything, they are diluting the product with less value and more part-time teachers – and customers just aren’t as interested anymore.

(The stats above can be had at the METI website (bilingual Excel file))

Share

81 thoughts on “The Geos bankruptcy – what’s next for eikaiwa?”

  1. The collapse of the language industry has much less to do with the eikaiwa model than it does with the removal of financial support for English study both by the Japanese government and private business. The Japanese government used to supplement up to 50% of the cost of English lessons at schools provided that an overwhelming number of lessons that had been booked were actually taken. This level of support has gradually dropped such that it has become nearly worthless to accept the government’s offer considering the required attendance stipulation.

    Additionally, many companies paid for English lessons taken privately by their employees while the economy was robust. As the economy has gotten worse, they have withdrawn such support in favor of lessons taught in their companies (which employees are required to attend and cost much less than eikaiwa lessons as 10 people being taught for 15,000 yen an hour costs less than each of those individuals contracting with individual language schools). Since I work with many company employees, I have heard time and again that they would like to take private lessons, but they cannot afford them on their own.

    Essentially, the socialized forces that supported the industry have slowly eroded and the private citizens who want to study can’t afford to continue at the level they once did without that support. Now, you tend to see only people who need English badly or who have the discretionary income to attend lessons paying for them.

    It’s not the death of the eikaiwa model that is killing them, but rather the death of the economic support of language learning both privately and publicly.

  2. The Eikaiwa industry is essentially a holding pen for Working Holiday Visa holders.

    The Japanese establishment want to be able to send their young people abroad on holiday visas, and they have to offer something in return. However, what they don’t want to offer here is any career path that would lead to more permanent foreign residents. So they came up with this.

    It is interesting to see an analysis of market forces. But practically, education around the world is a heavily government-subsidized “public good”. The government in Japan, however, has done its best to outsource that good to any flimsy structure anyone can invent.

  3. I haven’t been keeping up with the eikawa scene, even though I was rather deeply involved with English language education in Japan until about 25 years ago. Two questions: Are students actully learning to speak English at these schools? And have their teaching methods evolved at all in the last quarter century?

  4. “The Eikaiwa industry is essentially a holding pen for Working Holiday Visa holders.”

    I tend to doubt that. I haven’t taught worked in Eikaiwa for quite a few years, however when I did all of the schools I taught at, or interviewed for, as well as all the schools I learned of through acquaintances who taught at them, worked on one-year contracts. Working holiday visas were for 6 months. I never met anyone who was working at an Eikaiwa “school” who was on a working holiday visa. Lots of people working in bars and restaurants, yes, lots of people offering private lessons, sure, but not working in Eikaiwa schools.

    Now perhaps things have changed in the last 5-10 years so that Aeon, Geos etc. were offering short-term contracts to folks on WH visas, that is possible, but if so that is a new wrinkle.

  5. Orchid, do you think the cutbacks in government subsidies are the overwhelming factor, more than the economy, better consumer protection, and reputational impact? If so, can you point to something specific? As far as I know, the unemployment insurance program cut back its generous training subsidy in 2007, but students and revenue had started falling before that (there was a spike in 2006 but that seems to be last-minute demand to take advantage of subsidies before the changes took effect). Also, the rules of the subsidy program don’t allow people to get their classes subsidized every year, so there will necessarily be some limits to the amount of business it can drum up.
    http://www.yomiuri.co.jp/kyoiku/news/20070916ur01.htm

    And here is Gaba’s 2007 earnings presentation explaining that they had experienced a surge in students in 2007 because of the subsidy ending but expected a drop-off the following year. It lags the METI data by a year but who knows, maybe other schools experienced this rush a little earlier.
    http://www.c-direct.ne.jp/public/japanese/uj/pdf/10110218/00069130.pdf (page 19)

    Cuts in corporate spending on lessons are clearly important, but that’s not what I would call “socialized” any more than people choosing to spend their own salaries on lessons is socialized. It’s just one part of the market, which is mostly cutting back because of economic conditions and a change in HR policies.

  6. LB says:

    “I tend to doubt that. I haven’t taught worked in Eikaiwa for quite a few years, however when I did all of the schools I taught at, or interviewed for, as well as all the schools I learned of through acquaintances who taught at them, worked on one-year contracts. Working holiday visas were for 6 months. I never met anyone who was working at an Eikaiwa “school” who was on a working holiday visa. Lots of people working in bars and restaurants, yes, lots of people offering private lessons, sure, but not working in Eikaiwa schools.”

    This may be a technicality I don’t want to get too caught up on. You are right that the Ministry of Foreign Affairs grants the initial visa for 6 months, but it is renewable for another 6 months. So, effectively, one year.

    http://www.mofa.go.jp/j_info/visit/w_holiday/programme.html

    The kind of jobs you mentioned about in bars and clubs are the very kind the Ministry says “no” to.

    It may well be that the Eikaiwas offer the one-year contract, and so would-be Working Holiday visa holders actually take a One Year “Specialist in Humanities / International Services” visa. But it’s arguing technicalities. Japan wants to send its young overseas for those who want the experience, and unlike how America non-bargains with Japan, Canada, the U.K., and Australia want something in return.

  7. Hmm, looks like my comments got eaten because of links. So here is a non-link version:

    Orchid, do you think the cutbacks in government subsidies are the overwhelming factor, more than the economy, better consumer protection, and reputational impact? If so, can you point to something specific? As far as I know, the unemployment insurance program cut back its generous training subsidy in 2007, but students and revenue had started falling before that (there was a spike in 2006 but that seems to be last-minute demand to take advantage of subsidies before the changes took effect). Also, the rules of the subsidy program don’t allow people to get their classes subsidized every year, so there will necessarily be some limits to the amount of business it can drum up.

    And in Gaba’s 2007 earnings presentation they explain that they had experienced a surge in students in 2007 because of the subsidy ending but expected a drop-off the following year. It lags the METI data by a year but who knows, maybe other schools experienced this rush a little earlier.

    Cuts in corporate spending on lessons are clearly important, but that’s not what I would call “socialized” any more than people choosing to spend their own salaries on lessons is socialized. It’s just one part of the market, which is mostly cutting back because of economic conditions and a change in HR policies.

  8. Adamu, I have two questions for you that I bring up via one of my posts:

    http://hoofin.wordpress.com/2010/04/23/is-the-japan-english-teaching-market-700-million-in-size-or-7-billion/

    One is: how do reconcile the Yano Research figures to what METI says? Yano is ten times higher. It’s not a math error. Where’s the difference?

    Two: by the METI figures, enrollment in Eikaiwa is about half of what it used to be. If you take those plus-and-minus percentages on your chart—or just look at the monthly figures—you notice that Feb ’10 students is less than half of the ’06 peak.

    Yet the cost per class (when you adjust out something basic like rent, which is more a fixed cost) has barely moved. Twelve students sitting in a class presumably must cover about the same rent as sixteen.

    So are these arguments about quality and paying-more-for-less even relevant?

    If Yano has the real figures, and METI hands out what really is just a subset, can there be any solid conclusions?

  9. @Hoofin Yes, those on working holiday visas are not supposed to work in venues regulated by the Law on Control and Improvement of Amusement and Entertainment Business, as stated in that link. However, “normal” bars and restaurants are not covered by that law. The Japanese title of the law should make it clearer: 風俗営業等の規制及び業務の適正化等に関する法律

    http://hourei.hounavi.jp/hourei/S23/S23HO122.php

    “Bars” are fine. “Izakaya” and “restaurants” are fine. “Cabaret clubs”, “hostess bars” and similar establishments are out. I have not seen WH visa holders, or “student with permission to work” visas get in trouble for working in bars and restaurants as long as it was a venue regulated by the laws concerning 飲食店. There is no problem there. I have seen a lot of people get in trouble for working in a 風俗店. The laws are quite clear as to which is which, and which ones folks on various visa statuses can and cannot work in.

    I will concede that there are plenty of Canadians, Aussies and Kiwis working on Specialist in Humanities visas who originally entered Japan on WH visas. But they had to change to get a full-time job at an Eikaiwa, as working full-time is against the rules governing WH visas which say the holder must be “primarily on holiday in Japan”. This is not a “technicality”, it is an important and major distinction and invalidates the incorrect assertion that somehow the government is using the Eikaiwa as a holding pen for WH visa holders. It is not, different rules and visa statuses apply. One is not significantly related to the other.

    @Adamu – You’ve got it exactly right. The vast majority of students I taught in Eikaiwa, and this was a decade ago, were not getting “subsidies”. They were paying out of their own pocket, or their parents were. Subsidies only applied to a certain special situations. Cutbacks in any existing subsidies alone would not have led to the drop in students that the industry is seeing, and I doubt they would the cutbacks would even have had anything other than a very marginal effect. Ordinary people tightening their purse-strings and companies cutting back on “non-vital” programs is the main factor.

  10. I wonder how part-time and full-time are defined. It seems part timers increased after 2005 which I believe is when the big eikaiwas started getting hit for pension and health payments. The main response was fooling with schedules to make sure people were only getting paid for 30 hours a week.

  11. You have to separate two issues: the service the eikaiwa industry provides and how it was structured. It’s the financial structure of the industry rather than teaching standards, which has proved its undoing.

    The catalyst for NOVA’s demise was Supreme Court ruling in April 2007 which invalidated their refund policy. This decision immediately exposed NOVA to scores of claims from former students which garnered substantial press coverage. The publicity this sparked led to a METI investigation, resulting in a six month suspension order for the company in June. NOVA was forced to apply for court protection in October the same year.

    NOVA collapsed because it increasingly relied on students signing up for lessons they wouldn’t take, not because sharply fewer Japanese wanted to learn English. When people actually wanted these lessons, or their money back, in effect, we saw a “run on the bank”.

    Most eikaiwa were doing business in a similar way to NOVA so they faced the problem of rescaling their operations while also needing to keep funds on hand to meet increased claims. Forecasting future business was tricky, however, because prospective students became deterred on two fronts. Firstly, the industry seemed to be some kind of scam; secondly, even students who weren’t worried on that score were concerned about taking out a lengthy contract only to see the school go bankrupt.

    This was all happening in late 2007 and early 2008. Lehman Brothers may not have collapsed until September 2008 but the financial markets were already in turmoil by this point which added to the instability in terms of both funding and student enrolment.

    GEOS appears to have gone under due to an old-fashioned cashflow problem. For all the justified criticism of teaching standards at eikaiwa, that suggests to me there is a viable business there somewhere but not as it was structured.

  12. @treblekickeresq

    How do they reconcile that with the fact that it is blatantly illegal to sponsor someone for a work visa and then not hire them full time? I suppose that working holiday visa holders actually WOULD be ideal for this kind of work, if one takes the ultra short term “only the next quarter matters” mentality, but it is staggeringly obvious that this approach would provide you with the worst possible teacher pool, since nobody will at any point have even a full year of experience.

    Regarding the length of working holiday visas:
    “An initial stay of up to six months is granted for Australia, New Zealand and Canada (one year for the Republic of Korea, France, Germany, U.K., Ireland and Denmark. France, U.K., Ireland, Taiwan and Hong Kong cannot be extended.) This may be extended up to another six months by the immigration authorities.”

    So, most countries in the program get a 1 year visa from the start, and the 3 that don’t get a 6-month visa expendable once, which is really the same thing with a little more paperwork and fees attached to it.

    Anyway, for what it’s worth I have never met a single person teaching on a working holiday visa, of all of the many, many English teachers I’ve met over the years. While I’m sure a few do exist, as part timers, it seems pretty clear that they can’t make up more than a tiny minority of the eikaiwa teacher population.

    Now, what would be interesting would be comparison between these numbers, and the same industry/jobs in Korea and Taiwan – where private English study is just as popular, but is more often conducted in small businesses that are the equivalent of Japanese juku than these massive corporate chains.

  13. hoofin, I only just got access to that document.

    It is pretty obvious from the top description that the Yano report’s definition of the language business is very broad.

    ***
    “In this research, the language business market is defined as comprised of total foreign language classes, English teacher dispatching to kindergartens and nursing schools, correspondence courses, e-learning services, software, language examinations, study abroad agencies, translation/interpreting services, and foreign languages other than English (schooling/correspondence courses), in which language examinations, study abroad agencies and translation/interpreting services are classified as “peripheral business”.”
    ***

    When they break it down to the language school market, they estimate sales that are only 4X the METI survey (320 billion vs. 78 billion in FY08). It’s a big discrepancy but the trends look roughly the same. Without more disclosure of Yano’s method who can say? Since they cover “international kindergartens” and other kids English schools, they must be trying to quantify the smaller schools somehow.

    Mulboyne: The ultimately fatal emphasis on long-term contracts was something I was trying to allude to. I think it’s true that low teacher quality shouldn’t inevitably mean failure, but the issues of revenue model and teacher quality aren’t totally separate.

    With the big schools, it seems like they set themselves up to pursue scale in an effort to get as many long-term contracts as possible. When your revenue depends mostly on how fast you can rope people in, quality obviously takes a backseat.

    And I liked these quotes from some industry representatives:
    ***
    “I think the biggest factor was the decline in students,” said Masami Sakurabayashi, director of the Japan Association for the Promotion of Foreign Language Education…
    In its attempt to catch Nova, Geos expanded rapidly only to be caught high and dry by the plunge in student enrollment after Nova imploded, and was probably unable to trim unprofitable branches fast enough, Sakurabayashi said.

    “Rapid expansion is very risky with this business because it is hard to maintain quality service,” Sakurabayashi said, referring to the distrust created by Nova, which collapsed after being penalized by the government for misleading advertising.

    But the failure of yet another major chain doesn’t mean the industry is hopeless, some said.

    Running a language school chain is manageable if you don’t make the mistake of expanding too rapidly, Sakurabayashi said.

    “This is my personal opinion, but running foreign language schools is a profitable business, although you may not make such a huge profit,” he said, adding that the key is to have a realistic goal.

    Atsushi Hamai, a spokesman for the major school chain Aeon Corp., said that while it’s true that new enrollment has been in decline for the past several years, the industry is recovering and the company has not seen much fluctuation in its sales and operating profit.

    “When Nova was expanding its presence about 10 years ago, we did put a focus on establishing new branches,” Hamai said. “But we think that increasing the number of branches is not the way our company should go, so we hardly create new schools now. Our strategy is not expansion, but to strengthen the inside.”
    ***

  14. OK, I just noticed something very weird about the METI data. The annual existing student numbers take the *cumulative* tally of all the monthly reports, instead of reporting the number of students as of end-December! I need to redo one of the charts.

    I should have known… 4 million+ eikaiwa students is too much

  15. OK, now that I have fixed my chart…

    ” by the METI figures, enrollment in Eikaiwa is about half of what it used to be. If you take those plus-and-minus percentages on your chart—-or just look at the monthly figures—-you notice that Feb ‘10 students is less than half of the ‘06 peak.

    Yet the cost per class (when you adjust out something basic like rent, which is more a fixed cost) has barely moved. Twelve students sitting in a class presumably must cover about the same rent as sixteen.

    So are these arguments about quality and paying-more-for-less even relevant?”

    I am having trouble understanding your point. Fixed costs shouldn’t be ignored when dealing with a decline in customers. If you have 12 students instead of 16, you are bringing in a quarter less revenue you could be using to cover rent.

    And if you have a chain of 20 schools, and your pool of 1000 students shrinks to 500, you need to spread half the revenue around to pay rent for the 20 locations. If you wanted, you could fire half your teachers and just increase class size. Or you could try and charge your existing students more. Or just pay the teachers less. However, if you can close half the locations, or even less than half, you can bring that student-to-school ratio back in line to make you profitable again.

  16. @LB: OK, I concede that “wroking holiday” is not the accurate description for the kind of young worker I am talking about. They would ordinarily take the one-year “specialist” visa. But in the corresponding country, this would be akin more to something like a Working Holiday visa. And of course America does not have this, but does have a very liberal Green Card program.

    @treblekickeresq: I wondered the same thing. The question isn’t “how many do you employ, and how many hours do they work”. Instead, there is a “status” question, which each different company is probably interpreting differently, depending on their perceived position vis-a-vis METI.

    @Adamu: Thank you for the METI site. I am looking at these series in Excel on a monthly basis. It looks like, in the end, revenue per class was trending down until Nova blew up. Then, it bumped up to its Millennium level. This makes sense, since Nova was running at a loss. Plus, RENT is a factor. If you can cram more students into the same space, you cover the rent with a lower cost per head. When the students disappear, the rent for the space still has to be paid. You are ignoring this.

    Students went down 60% from the peak, yet “stores” are down only about 25%. So it may be same quality, but higher charge to cover the rent.

  17. One is: how do reconcile the Yano Research figures to what METI says? Yano is ten times higher. It’s not a math error. Where’s the difference?

    What am I missing? One number is a monthly sales figure, the other is a fiscal year sales figure. It makes sense to me that they should be about off by a factor of 10-12. Is that not the question you were asking?

    Twelve students sitting in a class presumably must cover about the same rent as sixteen.

    I don’t understand the logic here. I haven’t read the background of the GEOS shitstorm, but in general you start to make headlines when you default on your debt. Most debt issuers will make sure in the agreement that you have sufficient cash to cover stuff like rent, so that what’s called EBITDA is ample (usually at least 1.5x) enough to cover the corresponding debt payment for the same fiscal period. The two biggest ways to ruin your EBITDA are to suffer losses in sales (what was 32 students a class at 280,000 yen per head is now 15 students at 220,000 per head — a drop of 5.7m yen per class in just two years) or fail to keep costs down, which could be the result of any number of management gaffes, from not moving schools to buildings with lower rent at the ends of the tenant leases to not closing poorly performing schools, etc.

    What’s not going to change is the amount of debt you have to pay each period, especially if it was a long term borrowing made before NOVA imploded… So even if 12 students still cover the rent, they may not leave you with enough money to pay the banks.

  18. “What’s not going to change is the amount of debt you have to pay each period”

    That’s not really the way to look at their problem. Here’s where you have to think about what the schools were actually doing. Every time a school took an advance payment against a course of lessons, it was a liability which they were obliged to pay in lessons or a refund.

    If everyone who had deposits at a commercial bank attempted to close their accounts, it would cause a run on any bank in the world. Banks operate on the premise that not everyone needs access to their money all the time. Eikaiwa operate on the basis that they could take on “deposits” in the form of prepayments which they could then redeem at a sharp discount (via refunds) or, more expensively, through lessons.

    By rationing class availability at popular times, the schools managed the repayment schedule of these liabilities. In short, they relied as much, if not more, on students not taking their entitlements as repaying them in lessons. Each had their own “capital adequacy ratio”.

    The Supreme Court decision moved the goalposts for eikaiwa operators by raising the value of those liabilities at a time when the schools had, by and large, already spent the money they had taken. There is a very close parallel with another Supreme Court decision, only a few months earlier, which ruled the sarakin industry had overcharged borrowers and could be sued for repayment.

    The statement “What’s not going to change is the amount of debt you have to pay each period” doesn’t hold if a legal decision redefines your liabilities.

  19. @Roy and anyone else interested in the full time/part time issue.

    You asked “How do they reconcile that with the fact that it is blatantly illegal to sponsor someone for a work visa and then not hire them full time?”

    First, like you I’ve actually met very few people who came over on a working holiday visa. A handful over 11 years teaching in Japan.

    But to avoid paying for pension and health insurance co-payments most eikaiwas (but not all) claim their teachers only work 29.5 hours a week. Some do it by only scheduling teachers to work 29.5 hours but others do it by only counting time spent in the classroom teaching students. Japanese officialdom started cracking down on NOVA and the big eikawas around 2005.

    What is not clear is the definition of full/part time. Do they mean it in the English sense of a full time worker doing 40 hours a week and a part timer doing 20 hours a week. Or do they mean it in the Japanese sense of regular employee/contract employee. Where does a teacher getting paid for a 29.5 hour a week fall? I don’t know.

    As for blatantly illegal behaviour, basically the entire dispatch ALT industry is illegal but the Ministry of Education seems powerless and the local Labour Boards seem reluctant to do anything about it.

  20. Peter says:

    “What am I missing? One number is a monthly sales figure, the other is a fiscal year sales figure. It makes sense to me that they should be about off by a factor of 10-12. Is that not the question you were asking?”

    I annualize the METI numbers so that they can be compared to Yano. For example, in February ’10, METI gave it as 5.7 billion yen. So twelve times that (even though Feb. is a 28-day month!) is 68.4 billion yen. See? Annualized, Eikaiwa is a 68.4 billion yen industry.

    The Yano number that is floated around is ten times that: 787 billion yen. Yano has a great many more aspects of English-as-foreign-language spending thrown in. A poster discusses this a bit in the comments at my blog: http://hoofin.wordpress.com/2010/04/23/is-the-japan-english-teaching-market-700-million-in-size-or-7-billion/

    METI’s figures are strictly Eikaiwa, not other forms of English teaching like through schools, religious societies, etc. The 787 billion figure from Yano is including the electronic dictionaries and other peripherals.

    The story the press is missing is that Eikaiwa is, yes, Eikaiwa is imploding. But Eikaiwa is just a fraction of the money being spent on English language instruction in Japan anyway.

  21. Mulboyne,

    I don’t really understand your point that my statement doesn’t hold, unless the liability your talking about ranks senior to the debt holders. The caca hits the fan when senior debt holders don’t get paid, or sniff out that their not going to get paid. You either fail to pay them their interest (peccadillo) or you fail to pay them back the principal… And they expect the agreed amounts at the agreed times, or else people have to start calling lawyers, or seeking court protection.

    I do see the point that if the decision regarding the rights of the customer change, and a firm like GEOS suddenly has to answer to claims, they can be coughing up large extraordinary costs. This is quite similar to the decision on the risoku seigen-hou and grey zone interest that happened in late 2006. That was killing companies years before it ever went into effect.

  22. First, like you I’ve actually met very few people who came over on a working holiday visa. A handful over 11 years teaching in Japan.

    I did some looking, but couldn’t find any actual numbers (as opposed to quotas) for working holiday visa holders other than for Korea (which is something like 3600 per yer).

    but judging from this

    http://www.mhlw.go.jp/stf/houdou/2r985200000040cz-att/2r985200000040eq.pdf

    the number of working Holiday visa holders in Japan who actually work is incredibly low. Especially for G8+Australia+New Zealand. So the chances you actually meeting someone working at eikawa on a working holiday visa are probably incredibly low.

  23. Re the “Working Holiday” visa:

    OK OK, technically, these are not Working Holiday visas, they are One Year Humanities and so-called Specialist visas. I think if you ask anyone in the Anglosphere what a one-year visa might be, then “working holiday” would fit the general description. Even though, technically, you are right, they aren’t working holiday as Japan defines them.

    Isn’t there a more direct way for you folks to say that you favor special preferences for the Canadians, UKers and Australians? Then, we can just get to the point, ne?

  24. Hoofin, the visa issue you raise is a little more than a technicality. You originally suggested that the eikaiwa industry exists because the Japanese government needed to provide a pool of jobs for young foreigners on working holiday visas to match the numbers of Japanese who want to go on working holidays overseas.

    It’s true that governments do look at some degree of reciprocity in working holiday visa arrangements and Japan has occasionally been capped when outgoing numbers to a particular country exceed incoming numbers by a significant degree. However, as others have pointed out, eikaiwa schools don’t generally employ people on working holidays so your argument doesn’t seem to hold.

    More specifically, anyone who thinks a one year work visa is the same thing as a working holiday visa is probably not familiar with visa systems. You typically apply for a work visa together with an employer. If it’s granted, you can work as many hours you want in that job. If you keep your job, you can apply for renewal and there’s a good chance it will be approved.

    You typically apply for a working holiday visa as an individual and then find employment. The terms of the visa restrict your hours and there are firm limits on renewal. Some countries will refund taxes you might pay during a working holiday: you certainly won’t get that offer on a work visa. I don’t think Japan offers refunds but instead has a uniform income tax for working holiday visa holders.

  25. “Isn’t there a more direct way for you folks to say that you favor special preferences for the Canadians, UKers and Australians?”

    Who are “you folks”, what “special preferences” are said “folks” supposedly in favor of, and what are you going on about?

  26. “you folks” = the people who keep pointing out that technically, the one-year Specialist in Humanities and International Service holders are not “working holiday” visa holders, even though to many people, a one-year visa is synonymous with a working holiday.

    “special preferences” = the fact that, proportionately, there are many more Australians, Canadians and UKers resident in Japan, as per info in this comment at my site: http://hoofin.wordpress.com/2010/04/21/geos-goes-bankrupt/#comment-461

    “said folks” = the people focusing on whether a one-year visa is technically a working holiday visa, rather than the main issue that the Japanese need somewhere to stick one-year visa holders in exchange for their own young people being able to go and work in those other overseas countries.

  27. “Isn’t there a more direct way for you folks to say that you favor special preferences for the Canadians, UKers and Australians?”

    The US already has a special scheme that gives tens of thousands of young Americans a chance to go to Japan – the military.

  28. The US already has a special scheme that gives tens of thousands of young Americans a chance to go to Japan – the military.

    M-Bone, did you mean to say that Japan usually invites young Americans over to Japan only if they are willing to serve in the U.S. military stationed here by the Mutual Defense Treaty?

  29. Isn’t there a more direct way for you folks to say that you favor special preferences for the Canadians, UKers and Australians? Then, we can just get to the point, ne?

    Please learn how to read numbers.

    According to METI, foreign language schools employ less than 10,000 teachers nationwide. That’s teachers of all nationalities, including Japanese nationals who teach foreign languages privately.

    I cant find recent numbers, but according to this data from H17

    http://www.meti.go.jp/statistics/tyo/tokusabizi/result-2/h17/excel/h17-t-27.xls

    a little more than 65% of all teachers were foreign. Lets go ahead and suppose that’s still true. that would mean that there are currently roughly 6,500 foreigners teaching foreign language privately in Japan. Now lets say 5,000 (77%) of them are from Australia, Canada, America or the UK thats less than 1% of all foreigner’s working in Japan. Even if 90% of all those teachers are from one of those countries, you still only end up with a little more than 1%.

    In other words, as far as “special preferences” go, eikaiwa teaching isn’t a very compelling case.

    Perhaps a better question would be why it is that an industry which represents such a small portion of the total foreign working population of Japan is given so much attention.

  30. Adamu, let me try to clarify it, and maybe it will make more sense.

    M-Bone suggested that the U.S. runs a “special scheme” to send young people to Japan, called the U.S. military.

    What I said is that since it is Japan that has invited the U.S. military into Japan, (sorry for the caps, but THIS IS THE PART MOST PEOPLE FORGET!) the reality of it is that Japan invites American young people over with the intent that the understanding that they serve in the U.S. military. Otherwise, pfft. Sure, some. But nowhere in proportion to the offer to the Canadians, Australians and UKers.

  31. Every larger school I’ve seen was a scam. They relied on new enrollees to stay afloat like a Ponzi scheme. Bankruptcy was not only inevitable but intended. For one I worked in in Kanda in 1997, I was told the owner took 80% of the fee straight off as his income. The remaining money was insufficient to cover the salaries and costs of providing the lessons. Thus necessitating new student deposits to pay for existing students… from which the owner would, naturally, take another 80%…

  32. I think my comment may have gotten eaten, so Im gonna try it again without the links.

    “special preferences” = the fact that, proportionately, there are many more Australians, Canadians and UKers resident in Japan, as per info in this comment at my site:

    You have no idea what you’re talking about.
    The numbers you cite at your link have nothing to do with residence. They are the number of foreigners entering Japan in April 2009. Thats it.

  33. You have no idea what you’re talking about.
    The numbers you cite at your link have nothing to do with residence.

    Y-James, I agree that the numbers quoted at my site have to do with flows of people in and out, not actual residents. This was pointed out to me earlier today.

    It was hard for me to see how there were now 63,000 Americans in Japan. I’ve never seen a number above the low 50,000’s in the meager data Japan puts out.

    However, the proportions between the U.S. and the other countries mentioned are fairly accurate (in fact, it’s more like equal than 80%).

    So I do know what I’m talking about. There are disproportionately more Australians, Canadians and UKers in Japan than Americans.

    @M-Bone: I am just keeping things straight. I had the sense it was a joke.

  34. @Hoofin: OK, so there are proportionately more Americans than the other Anglo countries (at least, if you don’t count the military…), but so what? I still don’t remotely understand why you think this is in any way related to the eikaiwa business.

  35. Agreed with the “so what?”… but why shouldn’t there be proportionately more Aussies than Americans in Japan? Over 60% of Australians have passports compared to under 30% of Americans. You’ll probably find proportionately more Aussies everywhere….

  36. Hoofin, you have it exactly back-asswards and are to stubborn to realize it. The difference between a Specialist in Humanities visa and a Working Holiday visa is not a “techinicality”. They are vastly different concepts, handled and entered into by the individual involved and the host country in completely different ways. WH visas may be an “open invitation to visit” by Japan to foreigners, but it is in no significant way related to the Eikaiwa issue.

    Specialist in Humanities visas are directly related to the Eikaiwa issue, but they are in no way an “open invitation” freely extended to foreigners as a “come over and visit” type scheme. The process of acquiring the Specialist in Humanities visa has already been covered above, so I won’t reiterate it here, other than to remind you that it is an individual matter handled by the person applying for the visa and the company agreeing to host them. In other words, one can get the visa only after finding a job, not before, and without any assistance from the Japanese government, so it is quite impossible for Eikaiwa to be a “parking space” created or maintained by the Japanese government in order to make its Working Holiday visa program more attractive.

    You may continue to argue that to “most English speakers” a one-year visa is synonymous with a Working Holiday visa. I would disagree with that, and go a step further and say that even if a significant percentage does, just for the sake of argument, think that those two things are synonymous, they are still wrong.

    You are correct in stating that that there is a larger number, as a percentage of national population, of Canadians, British, Australians and New Zealanders in Japan than Americans. It didn’t take me long to find numbers, Japan is in general pretty good with numbers and they don’t put out “meager” data, you just have to know how to look for it.

    Census results for residents in Japan, by nationality, from Showa 23 (1948) to Heisei 15 (2003) can be downloaded at http://www.stat.go.jp/data/chouki/02.htm, you want file 2-12. According to the data provided, there were 47,836 Americans, 11,984 Canadians, 18,230 British and 16,076 persons from Oceania residing in Japan in 2003. I doubt very many of those were on Working Holiday visas, but perhaps a few were and bothered to fill out the form. But of that number 8,507 Americans, 1,018 Canadians, 2,366 British and 2,031 Antipodeans were Permanent Residents, so none of those have anything at all to do with WH visas.

    I can think of any number of reasons why there are proportionately more Canadians, British, Aussies and Kiwis in Japan than Americans – from the previously mentioned higher rates of passport ownership, to different world-views, to the simple fact that (geographic distance aside) Australia and New Zealand are “closer” to Japan as at most Australia is only one hour off Japan time, while New Zealand is only 3 hours off. And yes, perhaps offering WH visas does a bang-up job of introducing people from those countries to Japan and they decide to stay on after getting a proper working visa or marrying a local. But then again, so would hosting US troops in Japan, so I would tend to think the net result would even out.

  37. I think this is a case where hoofin should just go back and read the manual before wasting people’s time with misinformed questions and statements.

  38. Adam, I just strongly feel the Yano Research numbers are a more complete tally of English teaching in Japan. (Or maybe I wasn’t supposed to read the footnotes and the appendix to the manual. Beats just half of the first chapter.)

    To LB: On the “working holiday” versus “specialist in humanities” visa, I already conceded that point. LB, we just have a disagreement there and on the holding pen concept. If you want to think that the exchange of young people is just simply private-contract invitees being encouraged to come as something other than “guests” to Japan to share their special wisdom of 23 years in this life, I am O.K. with that. I just want to have another opinion, and get to share it, too.

    With regard to population numbers, I picked up Japanese government ones via a link to a trusted poster at my site. Yes, I saw they involved “arrivals and departures”, but the overall ratios were in the ballpark for what I have seen before. By the way, the series you offered has been out there for years, and it ONLY goes to 2003. And, if you hadn’t noticed, the ’03 numbers are proportionately about the same as what I was claiming for 2009. Which is why I went with the other data.

    I have previously been following the Ministry of Justice numbers, which I saw linked through my acquaintance Arudou Debito at his blog. These only give the U.S. series, because by absolute ranking, the U.S. is sixth after the large Asian nations and Korea. So the U.S. number is really no more than 55,000—no way over 60,000. But the Canadians, Australians (Oceanians including N.Z.) and the U.K. (“Group Two”) actually make up a number the same size as America.

    You claim the disproportion has to do with “cultural factors” and cite some passport numbers as the reason. Now, am I supposed to be as snide in responding that you assumed a cause-and-effect? Do a larger number of Group Two come to Japan because they have handy passports, or do they get passports because they are coming to Japan for other reasons?

    You point out that Sydney is usually just one hour difference (or two hours on daylight time, right?), even though it’s 9 hours away from Narita. O.K. But, the populations of Canada and the U.S. are mostly in the same time zones. (In fact, I think more of the relative population of Canada is in EST than in America.) And that doesn’t consider Pacific states like Alaska and Hawaii, or minor outlying possessions. And how does the U.K. factor into a time-and-distance way of looking at it? They’re really far way as well.

    I don’t know where the American military’s presence by invitation in Japan is supposed to factor into your analysis, of mine, about Eikaiwa employment. But I’d hate to think that these Japanese private companies have been managing their number of “offers” based on that. We would know something if the 8,000 troops were allowed by Hatoyama to be redeployed from Okinawa to Guam.

    I appreciate there are technicalities to “working visas” versus “one-year specialist” types. Yes, I also see that the population numbers I picked up are not the correct ones–they just follow the 2003 trendlines and in fact support my case less than 2009 actuals would. But on the parts of my talking where it’s opinion, I have a right to it without being buried in your “facts” that I, myself, can’t see where they would fit into anything either.

  39. Sorry for the double-post above, have noted problems with my posts containing links being eaten. When I opened a new browser (with no memory of this page) to check, I didn’t see the post at all and so assumed it had been eaten, thus prompting me to resubmit with link made “un-linklike”.

  40. “We would know something if the 8,000 troops were allowed by Hatoyama to be redeployed from Okinawa to Guam.”
    I was not aware that Hatoyama was now C-in-C of US forces and dictating troop deployments.

    The 8,000 Marine ground troops are free to go to Guam. It is the US side that is threatening to cancel redeployment as a “lever” to get Japan to do what the US wants on a different, and only collaterally related, matter. Hatoyama’s failing is having the cojones to tell Obama “Hey ‘ally’, I really don’t need this shit.”

    But we’re well and truly off topic now.

  41. That’s OK, I am still trying to figure out how even their presence was supposed to factor into private Eikaiwa companies disproportionately offering the one-year humanities specialist visas based on time zones.

  42. Hoofin, the visas are one year because the contracts are one year. People who stay longer, even English teachers, can get longer visas. Your whole premise of eikaiwa jobs being a “holding pen” for young foreigners for certain countries just has nothing to back it up.

    The mention of US troops in Japan was an example of how UN-related their presence is to the eikaiwa market.

  43. To follow up. Have you forgotten about the JET program? Now THAT is the program for government sponsorship of large numbers of young visitors.

    On the other hand, for your logic to work you would have to show that the governments of Australia, NZ, Canada and UK actually care about how many of their young citizens are teaching English in Japan, and for the Japanese government to have responded by encouraging an industry specifically for that purpose. If you can find some quotes from government officials suggesting this was a real link, then you have a point – otherwise you have nothing.

  44. “You claim the disproportion has to do with “cultural factors” and cite some passport numbers as the reason. Now, am I supposed to be as snide in responding that you assumed a cause-and-effect? Do a larger number of Group Two come to Japan because they have handy passports, or do they get passports because they are coming to Japan for other reasons?”

    One point to remember here is that US citizens don’t need a passport to visit Mexico, Canada or the Caribbean, which is all the countries that plenty of people go to. So, the super low passport numbers of US citizens aren’t actually telling the whole story, compared with most of the world where you need a passport to go to ANY other country. And of course the fact that the US is so gigantic that you can see a pretty big chunk of the world without actually leaving the country…

  45. The point was, Hoofin, and I will type slowly, that the presence of US troops has no more or less bearing on the number of resident foreigners (of which a certain number are English teachers) than Working Holiday visas. Which is to say, “none at all”. If your argument is that there is, based on quantities of citizens, a disproportionate percentage of Commonwealth Anglophiles in Japan as compared to US citizens and the cause of this “over-representation” is the Working Holiday visa program then the obvious counterargument is that there are far more US troops in Japan than Commonwealth Working Visa Holders, and yet for actual resident totals the US still comes up short (proportionally, as a chunk of world population or something).

    And given that a certain percentage of US troops live off-base with their Japanese spouses and kids, a certain number are going to show up on census forms just as a certain percentage of Commonwealth WH visa holders will – in fact likely more, as a WH visa holder is less likely to be in Japan for a full year and thus be in town during those few days when the census is held, plus is less likely to have a fixed residence and “be on the rolls” to get the form anyway.

    So your premise that somehow WH visas are inflating the numbers of non-American native English speakers resident and working in Japan is quite clearly in error. Yes, there is a correlation between the English-speaking countries that are eligible for WH visas and the English-speaking countries that are “over-represented” among residents of Japan. But correlation does not equal causation. And since the “under-represented” US has an alternative method to get young Americans into Japan, and that method results in more Americans visiting than WH visa holders, the “WH visa program leads to disproportionate numbers of non-US English speakers in Japan” argument clearly does not hold water.

    Which of course means other factors are likely at work. Just one of which may be, may be, the fact that Australia and Japan are in very close to the same time zone. Fairly large numbers of Australians go up to Hokkaido every winter for skiing. Why? Well, aside from the fact there is snow, in what is Australian summer, a big factor the Australians often cite in interviews is the near total lack of a time difference. It may be a long flight, but no jet lag means they can get right off the plane and run to the slopes. Lots of Australian tourists means chances for other Australians (or New Zealanders) to work in Hokkaido to deal with those tourists, which in turn means some find year-round occupations, or a significant other, what-have-you and they end up staying permanently.

    There’s your “time zone connection”.

  46. One reason for the seeming rise in part-time teachers is that the MOL changed the way it enforces compulsory enrollment in public health insurance. For a long time eikaiwa schools were getting away with not enrolling their full time employees, and when it became known that the government was planning to crack down, you saw a lot of schools where teachers were required to leave the premises when not teaching.
    Since the cut off for full-time/part-time is 30hrs/week, many teachers found themselves working 29.5hr weeks with the same workload. According to statistics they all suddenly became part-timers, but in reality they were carrying the same workload, they just had to do their lesson prep somewhere else (or at least close the breakroom/classroom door in case someone from the government came snooping).

  47. I’ve heard that before MJ, but the schools are STILL breaking the law by sponsoring work visas for people and then hiring them “part time.” The law is pretty clear that work visas are only for full time jobs, so the applications are obviously fraudulent. I’m puzzled why they a: aren’t getting in trouble for this and b: continue to have fraudulent visa applications approved.

  48. Responding to Roy’s several:

    @Hoofin: OK, so there are proportionately more Americans than the other Anglo countries (at least, if you don’t count the military…), but so what? I still don’t remotely understand why you think this is in any way related to the eikaiwa business.

    Roy, there are proportionately fewer Americans, not more. Even if you count the military (which I didn’t—M-Bone brought it up.)

    Hoofin, the visas are one year because the contracts are one year. People who stay longer, even English teachers, can get longer visas. Your whole premise of eikaiwa jobs being a “holding pen” for young foreigners for certain countries just has nothing to back it up.
    The mention of US troops in Japan was an example of how UN-related their presence is to the eikaiwa market.

    Roy, I understand how the Specialist in Humanities and International Services visa works. “In principle”, as the Japanese like to translate it, they are originally offered for a one-year period. Upon renewal, the visa holder may receive either a one-year, or a three-year renewal. (There is some talk that this three-year will become a five-year in the near future.)

    The reason the contract is written for one year is to put a limit on the person’s employment. As you can find out in Debito’s Handbook or on any of the NAMBU and sister union sites, having the contract with the specific end date is the worse employment situation. If the Eikaiwa just hires as “kikan no sadame no nai” (so-called sei sha’in), then the worker just keeps his or her job out to some indefinite date of the future, like the stereotypical Japanese salaryman.

    The mention of the U.S. troops was by M-Bone, as a joke, to say it’s the way that the Japanese government lets young Americans visit Japan.

    To follow up. Have you forgotten about the JET program? Now THAT is the program for government sponsorship of large numbers of young visitors.

    I did not forget about JET, and so maybe I should add that it is also a holding pen.

    On the other hand, for your logic to work you would have to show that the governments of Australia, NZ, Canada and UK actually care about how many of their young citizens are teaching English in Japan, and for the Japanese government to have responded by encouraging an industry specifically for that purpose. If you can find some quotes from government officials suggesting this was a real link, then you have a point – otherwise you have nothing.

    Roy, as I see it, none of those governments would let Japanese work in their countries unless the Japanese gave something in return. Do the Commonwealth countries’ ministers invite me in when they are discussing immigration policy? No. I get treated like an imposition if I even visit the U.S. Embassy for one of those dopey OSAC meetings.

    I just think that, arguably, the Japanese want to send their young people overseas and that the expectation is with those other countries that they (the Japanese) offer something in return. But with the U.S., the dynamics are entirely different, and so you see disportionately fewer Americans here. So maybe that’s nothing. But it’s my view.

    One point to remember here is that US citizens don’t need a passport to visit Mexico, Canada or the Caribbean, which is all the countries that plenty of people go to. So, the super low passport numbers of US citizens aren’t actually telling the whole story, compared with most of the world where you need a passport to go to ANY other country. And of course the fact that the US is so gigantic that you can see a pretty big chunk of the world without actually leaving the country…

    I haven’t been home to know, but I think now there is a requirement of a “passport card” for Americans to travel to and return from Canada and Mexico. But all the rest is a point well taken, that passports are not a matter of course in the States because it is very big. Maybe not big-chunk-of-the-world big. But big. And unlike Australia, the people are spread out.

  49. “I understand how the Specialist in Humanities and International Services visa works. “In principle”, as the Japanese like to translate it, they are originally offered for a one-year period.”
    If you start off with a 3 year contract they’ll give you a 3 year visa. When I had that type of visa as an office worker in university I got a 3 year visa from the start, since that’s what my employer requested. I think 5 year visas were supposed to be introduced a while back, since when I was helping a foreign professor with his paperwork back in 2006 they accidentally issued him a form saying he was getting a 5 year work visa, when no such thing actually exists, so the immigration department just gave him the 3 year one instead.

    “Roy, as I see it, none of those governments would let Japanese work in their countries unless the Japanese gave something in return. Do the Commonwealth countries’ ministers invite me in when they are discussing immigration policy? No. I get treated like an imposition if I even visit the U.S. Embassy for one of those dopey OSAC meetings.”

    You might see it that way, but it’s completely false. Foreign labor is almost never thought of in terms of reciprocity, it’s just about the labor needs of the economy. You say “none of those governments would let Japanese work in their countries unless the Japanese gave something in return.” Well, what they get is the labor, and they give out work visas based on what they consider the needs of the market to be, and the availability of a domestic worker to do the same job.

    Anyway, your basic argument specifically that the private eikaiwa schools are part of a government plan to offer something for young Japanese holds no water. You keep saying that you “feel” it’s related, but the fact is that Japan already has massive government funded programs for bringing foreigners into the country, namely JET and the various scholarship programs (one of which I am currently on, I should add), so there is no need for them to mask similar programs in the guise of private industry.

    “I haven’t been home to know, but I think now there is a requirement of a “passport card” for Americans to travel to and return from Canada and Mexico. ”
    Yes, but that’s a very new requirement that wasn’t in effect when a lot of the statistics that we’re discussing were gathered. It will of course change things in the future though.

  50. Not that the numbers really mean all that much, but while Americans may not need a passport to go to Mexico or Canada, since 2004 they have needed one (or equivalent but rarer) travel documents to get back into the US – so they effectively need one to go.

    “Roy, as I see it, none of those governments would let Japanese work in their countries unless the Japanese gave something in return.”

    Do any Japanese on working holiday visas actually take out of a country more money than they put in? Australia and New Zealand know the answer.

  51. For what it’s worth, I know for a fact that NYC has more than a few English schools where foreigners, especially Japanese and Koreans, study illegally on courses just barely shorter than the 90 day visa free entry period, and I assume it’s the same in other major cities.

  52. Hoofin,

    To repeat the point I made to you earlier: “reciprocity” is a characteristic of working holiday visa arrangements, not work visa arrangements (of any duration). Eikaiwa teachers are on work visas, not working holiday visas. The difference between the two is not “a technicality”. The issuance of work visas counts not at all towards the working holiday visa balance between two nations. The supply and demand for eikaiwa teachers has nothing to do with the working holiday visa arrangements. The idea that the eikaiwa industry exists primarily as a “balance” to allow young Japanese access to working holiday visas elsewhere is absurd.

  53. The idea that the eikaiwa industry exists primarily as a “balance” to allow young Japanese access to working holiday visas elsewhere is absurd.

    So the Japanese tolerate an unregulated loss-making industry that fewer and fewer trust or will give money to, and one that tends nowadays to hurt their international reputation, just for kicks?

  54. I have a question.I
    was thinking about start teaching my twelve years old kid some English. I know it’s better to simply send him overseas during summer vacation or something.But the kid simply just do not wish to go.Meaning either he goes to Eikaiwa school or private lesson.Is there any advice on this?
    Thanks.

  55. You might be asking the wrong crowd… but I bet if you do some research you can find a fairly decent place for your kid to learn. You need to figure out their payment schemes, teacher policies, get a look at the curriculum, that kind of thing

  56. Ace,

    It depends on his level but there are also eikaiwa summer camps in Japan. That might be a compromise worth investigating if he’s not keen on going overseas for summer.

  57. @Aceface Sorry, I recognize your username but I can’t recall much about your background. Sending a 12 year old overseas for summer vacation would improve their English as kids soak up language like a sponge. Problem is they lose it almost as fast without reinforcement.

    Why don’t you teach your child English? One of the best things you can do is read in English regularly. 12 years old might be a bit tricky finding books easy enough language wise but interesting topic wise. Graded readers or perhaps Japanese folktales in English might be a place to start.

  58. “So the Japanese tolerate an unregulated loss-making industry that fewer and fewer trust or will give money to, and one that tends nowadays to hurt their international reputation, just for kicks?”

    Who is this monolithic group “the Japanese”?

    Eikaiwas are regulated, to the same extent the government regulates any other 100% private enterprise. Which is to say there are “regulations”, whether they are enforced or not is another matter. But the key word here is “private”. Not public. Not state-run, not even government-affiliated, and in no way part of any mythical “tit-for-tat” visa scheme.

    I have absolutely no idea, and I strongly suspect I am not alone, as to how you think Eikaiwas are somehow “tolerated” (sanctioned?) in spite of being money losers. If they were, I don’t think we’d be seeing Geos going bankrupt as we are, which means this whole blog post would doubtless never have come into existence. If this was some government-sponsored make-work scheme for wayward English-speaking youth just to make Japan “look good”, wouldn’t Japan be bailing the industry out just like they did JAL, or just like the US bailed out Detroit, or Fannie Mac, or the way other countries bail out “national interest/prestige” industries? We’re not seeing that, we’re seeing a private, capitalist business model self-correcting after clearly failing.

    Finally, “hurts (Japan’s) international reputation”? How do you figure that? Exactly how many governments do you think care about, or even know about, the Eikaiwa industry in Japan? Are you talking private individuals? Do you honestly think Joe Schmuckatelli in Podunk is sitting in his living room just off Exit 17 on the Turnpike going “Well when Toyota made crappy cars that was one thing, but the collapse of the Eikaiwa industry has really got me mad. Just shows you can’t trust them darned Japanese!”??

    Unless, of course, in spite of overwhelming evidence, you are still desperately clinging to the notion that Eikaiwa was created and/or nurtured by the Japanese government as a means to provide work to young folks from Commonwealth countries in order to preserve reciprocity in Working Holiday visa agreements. Then, and pretty much only then, I suppose the argument that the failure of Eikaiwa “hurts Japan’s international image” makes some sort of sense. But that is nothing more than a case of creating “facts” to support an untenable thesis and shows how, as I said above, you’ve got it back-asswards. You created a conclusion based on a complete misunderstanding of how things actually work, and rather than back up and punt you’re still trying to bend things to fit that fatally flawed conclusion.

  59. “So the Japanese tolerate an unregulated loss-making industry that fewer and fewer trust or will give money to, and one that tends nowadays to hurt their international reputation, just for kicks?”

    Who is this monolithic group “the Japanese”?

    LB, I’m not exactly sure what your problem is, but I am going to respond to you. I don’t understand why you would pull out one phrase, “the Japanese”, and read into it anything about monolithic. The obvious reading is that the people in Japan who have something to do with Eikaiwa, either as regulators (so this would be government) or as consumers (so this would be people who use the Eikaiwa’s services).

    I posted here because I thought this board had credibility for good discussion. Comments like “who is this monolithic group ‘the Japanese’?” where I said nothing to even imply that, make me wonder.

    Eikaiwas are regulated, to the same extent the government regulates any other 100% private enterprise. Which is to say there are “regulations”, whether they are enforced or not is another matter. But the key word here is “private”. Not public. Not state-run, not even government-affiliated, and in no way part of any mythical “tit-for-tat” visa scheme.

    LB, these assertions say nothing. Government regulations, and their enforcement, vary across industries in practically every country. In Japan, English teaching is essentially unregulated. Even the labor laws and social insurance treaties are just pretty words. Only the supply of labor is overseen.

    I have absolutely no idea, and I strongly suspect I am not alone, as to how you think Eikaiwas are somehow “tolerated” (sanctioned?) in spite of being money losers. If they were, I don’t think we’d be seeing Geos going bankrupt as we are, which means this whole blog post would doubtless never have come into existence. If this was some government-sponsored make-work scheme for wayward English-speaking youth just to make Japan “look good”, wouldn’t Japan be bailing the industry out just like they did JAL, or just like the US bailed out Detroit, or Fannie Mac, or the way other countries bail out “national interest/prestige” industries? We’re not seeing that, we’re seeing a private, capitalist business model self-correcting after clearly failing.

    LB, this just looks like a lot of words to say to disagree with the idea that the Eikaiwas are tolerated by the government. (Not sanctioned, tolerated.) So it doesn’t follow, all the rest, about what we’d be seeing or not seeing.
    As for “bailout”, the government does use G.Communcations. Both Nova and apparently Geos have been handed to G.Communications. The government just doesn’t set up a TARP to funnel more money in.

    We’re not seeing a “private, capitalist business model self-correcting”. We’re seeing a (now, second) government-tolerated education service, where the government controls the number of workers who make up the labor force, but not much else, go bankrupt and hurt many people.

    Finally, “hurts (Japan’s) international reputation”? How do you figure that? Exactly how many governments do you think care about, or even know about, the Eikaiwa industry in Japan? Are you talking private individuals? Do you honestly think Joe Schmuckatelli in Podunk is sitting in his living room just off Exit 17 on the Turnpike going “Well when Toyota made crappy cars that was one thing, but the collapse of the Eikaiwa industry has really got me mad. Just shows you can’t trust them darned Japanese!”??

    LB, I’m not sure what your hypothetical adds to anything, unless you were trying to build some stereotype of a New Jerseyite, which (as one) I can tell you isn’t funny. And maybe you didn’t mean to, but “Schmuckatelli” is suggesting some bad ethic sentiment.

    How it hurts Japan’s international reputation is that the tens of thousands of foreigners who have bad dealings with employment in Eikaiwa go back to their home countries and talk. The saving grace of this land has been the everyday Japanese people, however you want to define the group, who built for it the fine reputation it has in the modern world. But you start offsetting that with the bad experiences of people trying to make a go of it here, and you build a constituency in other countries that has an animus about Japan. I don’t think it’s worth it to the Japanese and so that is my point.

    The industry exists because of the government, since the labor force is regulated by the government, and it can’t make a go of it. So it’s hardly some libertarian enterprise.

    Unless, of course, in spite of overwhelming evidence, you are still desperately clinging to the notion that Eikaiwa was created and/or nurtured by the Japanese government as a means to provide work to young folks from Commonwealth countries in order to preserve reciprocity in Working Holiday visa agreements. Then, and pretty much only then, I suppose the argument that the failure of Eikaiwa “hurts Japan’s international image” makes some sort of sense. But that is nothing more than a case of creating “facts” to support an untenable thesis and shows how, as I said above, you’ve got it back-asswards. You created a conclusion based on a complete misunderstanding of how things actually work, and rather than back up and punt you’re still trying to bend things to fit that fatally flawed conclusion.

    Like I said, Eikaiwa exists as a holding pen for [Gap Year guys and gals however you want to describe them] who want to visit and work in Japan. That’s my view. Yours is different.

  60. What an awesomely tragic story. That poor family. Didn’t the sister notice the Darling family was kind of poor before the manga took off? I wouldn’t blame the manga too much. If it wasnt marrying a foreigner, the sister would have found some other excuse to flake out.

  61. Adam, did you post that comment on the wrong thread? I have no idea what you’re talking about.

  62. Hoofin, all I’m going to say in response to that is: it’s quite a leap to go from saying that the Japanese government has neglected to properly regulate the eikaiwa industry (as they have also failed to properly regulate any number of other types of businesses), to saying that this regulatory failure implies a specific policy related to their international relations. Foreign labor often gets screwed. There’s very little that’s unique or special about the situation of eikaiwa teachers except for the novelty that they come from rich countries, rather than poor ones – and compared to the problems faced by “trainee” or temp workers in the Japanese manufacturing sector they still come out pretty good. (Not that this means they don’t deserve justice and fair labor conditions, of course.)

    I also think your estimation of how much eikaiwa affects Japan’s reputation is massively overblown. I have literally never seen a single mention of any of these problems outside of specifically Japan related media outlets. The only people who even know, much less care, about the issue are current, former, and potential foreign residents of Japan and nearby countries with similar industries.

  63. If you want substantive discussions on this site, you need to stop acting like a troll. It isnt just that your view is “different” you’re either being completely wrong, casting doubt without backing up your claims, or making overly obvious assertions as if they were some kind of breakthrough discovery. I can see why the other commenters are getting frustrated.

  64. Adamu,

    Here is what I originally said:

    The Eikaiwa industry is essentially a holding pen for Working Holiday Visa holders.

    The couple other people said no, it’s not. Some went to “working holiday” as a specific kind of visa. OK, fine. So I say, it’s essentially a holding pen for Gap Year young people. LB feels that Eikaiwa is, in fact, the magic of the capitalist market at work—even though the government has a very heavy hand in the number of workers the industry has, via the overall visa system. Roy mentioned JET, and I didn’t even touch on JET, but in the trade wars era of the Reagan Administration the Nakasone Government specifically expanded the JET Program to be a foreign exchange. Essentially, a holding pen for foreign guests while they were/are in Japan.

    So it’s not like the concept is off the wall.

    The Japanese establishment want to be able to send their young people abroad on [ehem, Gap Year] visas, and they have to offer something in return. However, what they don’t want to offer here is any career path that would lead to more permanent foreign residents. So they came up with this.

    Again, as opinion, which besides anecdote or internet links is mostly what you see in a comments section, how is this off the wall? What I’m saying is that the industry serves a purpose as a part of Japan’s larger diplomatic efforts in the world. I think that’s why it’s tolerated; others say no. I don’t see why that should start a flame war.

    Additionally, there is no career path to Eikaiwa. The vast majority of workers in the industry leave it and disappear. Or they end up as corporate headhunters for the finance and IT industries in Tokyo, knowing little about either. There are select few long-term Eikaiwa teachers. A man known as Barefoot Bob at Nova was one of the few I ever met, and he left it in recent years.

    Tougher regulation would make it something other than a holding pen. But then, the government wouldn’t have a revolving door of in-and-out foreigners. Some people say this is coincidence. I think there’s is more there.

    It is interesting to see an analysis of market forces. But practically, education around the world is a heavily government-subsidized “public good”. The government in Japan, however, has done its best to outsource that good to any flimsy structure anyone can invent.

    What’s wrong with this comment? In most countries, you need public support to offer education, which is public money or at least the free rent a government-owned building provides. Eikaiwa in Japan does not function that way at all, and it is failing. Covering rent is a big issue—one that you yourself didn’t mention in your above analysis.

    Then, there are the Yano figures quoted in the Japan Times, which put Eikaiwa as a mere subset of foreign language spending in Japan. Although Yano includes many other items like translation services and electronic dictionaries, the numbers that focus on pure education dwarf Eikaiwa as reported by METI.

    So if you were a government ministry that didn’t need the headache of imploding businesses, wouldn’t you just shut down the “free market” Eikaiwa mills and focus on encouraging people to learn English through the more time-tested way of public support?

  65. “What an awesomely tragic story.”

    Yeah, no way that works out well. I’m afraid that a short term gaijin bar hookup thing is probably the best case scenario here…

    Her “plan” is way more unrealistic than the 39 year old air hostess looking for guys 25-35 over 180 cm and who make at least 1000man a year (or whatever it was).

    She’s getting some sober advice, however. One comment form a female staff member at an eikaiwa school (let me tell you what these guys are really like…) is spot on. At the very least these guys have other things on their minds than paying for her mother’s health care.

    Also some classic Canadian anti-Americanism shows up second hand – in some parts of the States, they’ll murder you!

  66. Starbucks is a holding pen for philosophy grads.

    Seriously Hoofin’, eikaiwa teachers follow the same labor dynamic as strippers – just showing up makes the vast majority of customers happy enough and the best before date is more important than experience. In almost no context is unskilled work rewarded with pay / career-track advances after a certain fundamental level of employee reliability is established.

    The market is brutal and it isn’t Japan’s fault – average eikaiwa teachers make more per hour than many contingent faculty with PhDs at big American schools like Duke and Georgetown (where students can pay in excess of $30,000 a year tuition). And they have better benefits and job security.

  67. Adam, I certainly wouldn’t say that Hoofin is acting trollish here. OK, I find his argument a little frustrating, but not to the point of getting angry at him personally. Let’s save the troll accusations for ad-hominem attacks, snarky comments with no substance whatsoever racist cliches, etc.

    Re: the story. Man, I wouldn’t even call it tragic, just pathetic. What else can you call a girl who gets into arguments with her family about getting married and emigrating to be with her foreign husband who doesn’t even exist? OK, I feel sorry for all of them, but little sister should be spending that eikaiwa money on a damn therapist. Oh, and I feel sorry for any guy that she actually tricks into marrying her.

  68. “even though the government has a very heavy hand in the number of workers the industry has, via the overall visa system.”

    Backwards yet again. The government does not issue visas and then tell people or help people to get work. People find work, then apply, through their prospective employer, for a visa. And if the employer is legit, the applicant gets a visa. The government does not control the number of specialist in humanities visas offered. The market does, by offering jobs for applicants. If the market can bear 1000 new teachers in a year, and 1000 new bodies show up with proper asking for a visa, then 1000 visas are issued. Or, if the market can only bear 100 new teachers, and finds warm bodies to fill all those slots, then the government issues 100 visas. It really is that simple.

    Of course, this is still assuming that all Eikaiwa teachers are on Specialist in Humanities visas. A fairly decent percentage are not, as they are spousal or even PR visas. Eikaiwa and dispatch companies love those folks, because they don’t have to do anything but keep track of taxes. No visa sponsorship headaches, no apartment guarantor issues, nothing.

    Or, are spousal visas part of the plot as well? Allow young foreigners to marry Japanese in order to fill a reciprocal quota that will allow young Japanese to go overseas and get married there?

  69. I thought the story rather match the hypothesis comes from Hoofin’,thus I post here,not in the “My darling is a foreigner the movie” comment section.

    The Japanese establishment™built this scheme of Eikaiwa schools so that the women can get foreign husbands while we,the men can find brides at the Filipino pubs.

  70. Re: “the narrative” – the sister is describing some major escalation in her posts over the course of something like a week…. either the “darling ha” nut has totally lost it or there is some major exaggeration going on. When you look at it, the original poster catches some major (and deserved, I think) flack for basically suggesting “she said that she would take care of mom, that’s how it is going to be!” So she may be leading the posters on by making her sister look like a total nutcase.

  71. Just bought the entire copyright of the thread and I’ll write a keitai novel,something like “My Darling is a foreigner”meets “Looking for Mr.Goodbar”.

    Hopefully that’ll make me quit my current job….

  72. Peter,

    Sorry, I’ve only just noticed you posed a question to me much earlier in this thread. What I was drawing attention to was the way that recent growth at the top dogs in the eikaiwa industry relied less English teaching and more on fund raising.

    The Supreme Court ruling was so devastating because it redefined their financial obligations in the same way an insurance company might be told its policies covered more risks than they thought. That’s why, when you wrote in passing “What’s not going to change is the amount of debt you have to pay each period”, I thought it was ironic because, in a sense, that’s exactly what did happen to them.

    I appreciate you were using the phrase more specifically in your comment. I thought it was important to point out that the business failures of NOVA, GEOS et al had little to do with the basic economics of offering English classes.

    You mentioned the regulatory change with the consumer lending “grey zone” and you’ll notice that’s exactly the same parallel I drew. It’s particularly close because it was a January 2006 Supreme Court ruling which unleashed the flood of kabarai claims and not the law change which came in its wake (and which goes into effect in June).

    Going back to eikaiwa, the Supreme court thought NOVA was using a high price to value lessons already taken when calculating refunds. Often, this was a price that was not charged anywhere in their sales materials. In some cases, it even meant that someone applying for a refund could learn they theoretically owed the school money.

    Schools had begun to realize that if they could get people to sign up to long term contracts, the revenue could be booked early and used to fund more growth. They also realized they could outsell their capacity to offer lessons with apparent impunity. Their refund policy protected the funds they accumulated in the same fashion as an early redemption clause in an investment product.

    The new branches which the eikaiwa opened were increasingly all about sales rather than teaching. In another parallel with the sarakin industry, they were often next to stations. I half wonder whether some unfortunate signing up for a lesson pack was frog marched round to a sarakin ATM to get the funds.

    The Supreme Court ended all this. NOVA found itself on the hook for refunds when it had already spent the money. Worse, the ruling also expanded the number of people entitled to refunds because the schools did not have the capacity they advertised and lessons were, practically speaking, unavailable for some.

    The recession would have hit eikaiwa schools hard anyway but it’s the fact they had become fund raisers rather than teachers which was the undoing for many.

  73. Schools had begun to realize that if they could get people to sign up to long term contracts, the revenue could be booked early and used to fund more growth. They also realized they could outsell their capacity to offer lessons with apparent impunity. Their refund policy protected the funds they accumulated in the same fashion as an early redemption clause in an investment product.

    Under US GAAP, this would have been fraudulent. Money paid in advance is not revenue until certain tests have been met. One of which, generally, is has the company performed the service?

    What they had was deferred revenue, a liability. But it gave them the cash flow to do exactly what you are saying, Melboyne.

Comments are closed.