I've taken a pay cut of 25%

The numbers on the left of the graph show how many won are needed to "buy" a US Dollar.

It just keeps getting worse and worse and worse. Our salaries have become worth fully a quarter less since we signed our contracts at the end of July.

When the exchange rate was bouncing around near 1,100 a few weeks ago, I wasn't really worried. I figure there's some volatility in these things, but they tend to be cyclic, and there must be psychological ties to the 1,000-to-1 exchange (there certainly are for those of us who live here, many of whom quote prices in dollars; eg. a 3,500 won bus fare is spoken of as $3.50 (though it's now more like $2.50)). But now, this is starting to freak me out. The ROI from a year in Korea is a lot less with the exchange rate at 1,350:1 than at 900:1 (where it was last time I traded won for dollars). I still think I'm right about the psychological ties to 1,000-to-1, I think it will return to that neighborhood... the questions is, will I be here long enough to see that return, and if not, how long can I wait before "cashing out" my won?

***edit***
I just saw that the Dow lost 500 points yesterday and is now below 9,500. And unemployment in the U.S. is over 6%. I still have a job, and I haven't lost any value in savings. To those who have lost jobs or are nearing retirement and wondering if it will be possible, I'm sorry. There's always a job teaching English in South Korea waiting for you.

Won Continues to Decline

Today the won has crossed the 1200 to 1 barrier. Our salaries have declined in value nearly 20% since we arrived in Korea one month ago, and even more since we decided to come here. This graph shows how many won it takes to buy a US dollar, over the period that we've been in Korea.



Every time there is bad news from the US markets, the won drops further. On the rare occasion that there is good news, it climbs back up a bit. Whatever happens in the US, I think the won will rebound. The fundamentals of the South Korean economy are sound. If, as John McCain says, American workers are the most productive in the world, Koreans are the hardest working. The average Korean works almost 2,400 hours a year, a full third more than the average American. A comparison of the time children spend studying is even more lopsided.

America is geopolitcally blessed, and South Korea is in a tough spot - no significant natural resources and cut off from Eurasia by North Korea - but the work ethic here will never fail to drive the economy. South Korea is perhaps the only country in the 20th century to have moved from the third-world to first, certainly the only one outside of Europe. If you doubt the resilience of the Korean economy, just look at what happened after the financial crisis and subsequent IMF-imposed disaster of 1997. South Korea will be fine, stronger than ever soon. The question is, will I stay here long enough for the exchange rate to move back in my favor?