Steep Opportunity Costs

By Donnie | Articles

Steep Opportunity Costs.mp3
My Eikaiwa (English Language School) time is limited. I have exactly 67 days until I have to leave the job that I’ve had for three years now. I’ve blogged your eyes out and ears off about job hunting and apartment hunting. I also mentioned that interviews are starting, and offers are happening with some of the AET/ALT (Assistant English Teacher/ Assistant Language Teacher) dispatch companies. One company that I mentioned, the one that I want to work for most, was Interac. The reason I have my sights set on this company is because I know it’s one of the largest providers of AETs to public schools in Japan. Now, when it comes to Eikaiwas, big doesn’t necessarily mean stable, Nova is a prime example of that. If you aren’t familiar with Nova, it’s the Eikaiwa that went bankrupt at it’s peak…being the largest Eikaiwa in Japan at the time of the filing. However, when a company is linked to the public school system, I feel it’s pretty stable, because the public school system isn’t going anywhere anytime soon. So, I would imagine Interac’s lifeblood is the contracts that it secures with schools all over Japan, whereas Eikaiwas have to rely on contracts with students and the resulting payments to keep business healthy.

In my “What Kind of Job Am I Looking For Anyway?” post I mentioned that I had interviewed with Interac last year and had some really positive feedback. On Monday, I have to do another demo lesson for Interac, but this is the one that counts. If I do a good job, and the school likes me, it means that I could end up with a job in Moriya, which is just a 17-minute train ride from Tsukuba. I did get some more details on the position, and if all goes well, I would have to be ready for training in late January, and be ready to start on February 6th.

Last Sunday I had a chance to speak with a member of the AEON head office staff; he’s the one that’s in charge of contract stuff. Unfortunately, I got the news I didn’t want to hear. Because this Interac opportunity doesn’t allow me to give 60 days notice I would forfeit my entire completion bonus…which sucks because that’s money I need live on until I get my first check at my new job. The other downside is that I bought my plane ticket home through JTB (a travel company here in Japan) about three months ago, and the ticket is non-refundable…damn it!!

So if I’m offered the Moriya job and I take it, it means I have a secure position for my next three years in Japan, I’ll only have to teach at one school (which is rare for most AET jobs), my job will only be 30 minutes from Tokyo, and I’ll have the schedule to do modeling, karate, etc. But…on the flip side, I would be taking a pay cut, sacrificing the trip home that I’ve already paid for (I haven’t seen my family in almost a year), my February AEON income, my bonus, and the chance to say goodbye to my students. Financially, I think sticking out my contract would be best (I’d be letting go of over ¥300,000, over ¥400,00 if you include the flight cost, which is currently the equivalent of 3,572.70 USD), I just worry that I won’t be able to find a job in this area because there aren’t so many.

I remember taking Management Decision Science in my business curriculum at Morehouse College and remember discussing opportunity costs*. Never have those lessons been more applicable than right now.

*Opportunity costs are when you have two choices and there are things to give up when you make either choice. Those things you give up are the opportutnity costs*.

What would you do in this situation? Would you take your bonus and fly home (in hopes of finding another Japan job that fits with the end of your contract)? Or, would you terminate your contract for the promise of a stable position, albeit a lower-paying one, now? I’d love to hear your thoughts…please feel free to post in the comment section below.

どうしょうかな? (Doushoukana?/ I wonder what I should do?),

Donald Ash

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  • Amanda


    Oh man that is a problem. I’m leaning toward the “stick it out with AEON” solution myself, simply because when researching schools I read some sketchy things about interac, like people not getting paid on time, disorganized structure etc. I’d suggest doing a google search on Interac and reading some forums if you haven’t already.

    Do you have to fly home? Could you live off private lessons and the completion bonus while you look for another job? Or are you going home for a vacation?

    • Donald Ash

      Amanda thanks for the feedback. I see what you mean. I have done some Interac research in the forums, and yes, I’ve read some of the sketchy things, too. It’s hard to get a gauge on the company because there are so many mixed forum postings about them. Some people say they’re okay, others don’t like them. I know all companies are going to get some kind of backlash, except for maybe JET (that’s like the only company I’ve consistently read about where people can’t come up with a lot of bad things to say, except…they may place you in a rural area), but I’ll do some more research. Thanks for the suggestion.

      I would just be flying home for a vacation. I’ll be staying in Japan for a while no matter which option I choose. The good thing about finishing at AEON would be that I would also have about three to three-and-a-half weeks until the next job starts.

  • Roger Starkey

    Did he give you that “60 days” thing? Is it in writing? All you have to do legally is give 2 weeks, and they have to pay you within 7 working days of leaving. I’d check those things very carefully.

    I also had to compute this kind of thing in graduate school. I figured that the basic worth of a job teaching in Japan was about $8,000 USD. Your opportunity cost evaluation should be tempered by the possibility of ending up with nothing, which could seriously happen upon returning to the U.S. (or that visit to family becoming a prolonged stay.)

    I also checked out Interac like Amanda, and I wonder if she considered how many people work for them? Thousands. Out of that number there will of course be some people dissatisfied, but that doesn’t mean all of them are…

    I’d call it “a bird in the hand” since you have the Moriya deal, and just cut my losses and stay, if that’s what you want to do and where your heart is. You’re trying to apply scientific modeling to what is, in the end, a purely personal decision ruled more my psychological factors than logic. You also have to consider the counter-argument: that you can always make more money in the future, but you may likely not get the same chance again.

    • Donald Ash

      Roger, thanks for posting. Yes, the 60-day notice is in writing, and I know that if I left, AEON would pay me for the last bit of work that I had done (they’re pretty straightforward with financial stuff); but I would forfeit the bonus. Like I was telling Amanda, I would just be flying home to visit. The plane ticket I bought is a round trip. I know that seeing my family is great and all but there are simply more job opportunities for me here in Japan. I’ve definitely got to mull some things over, and make a decision soon.

  • Ryan McGuinness

    I think it is really difficult to decide on an option here; it’s a lot of money that you stand to lose if you leave AEON early, but if you don’t leave you’ll be back where you starter in the first place looking for a job again.

    At least you can see you family no matter you descision. Which seems to be what you want the most. Good luck, I’m sure you’ll make the right decision.

    • Ryan McGuinness


    • Donald Ash

      Thanks Ryan. Well, honestly, if I take the Moriya job I won’t get to take that visit home, at least not right now. I would probably have to wait for about a year, to get my financial footing again, but I could visit eventually.

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