If you have been in Japan for a year or two and your salary looks exactly the same as when you arrived, you are not imagining it. And it is not because you are not good enough.
It is because the system was never designed to pay you more.
Your Salary Was Decided Before You Even Applied
Not by your qualifications. Not by your teaching experience. Not by how your demo lesson went.
It was decided in a municipal government office, by a procurement committee, during a bidding process you were never told existed.
Here is how it works.
When a city or town wants ALTs in its schools, it does not hire teachers directly. It puts the contract out to tender. Dispatch companies compete for it. The company that wins is almost always the one that quoted the lowest price — which means the company that wins is the one that figured out how to deliver ALTs for the least amount of money.
You are the variable they adjusted to make the numbers work.
What the Money Actually Looks Like
Most ALTs have no idea what their employer is actually billing for them. The number is uncomfortable.
A realistic example from the dispatch side of the industry: a single ALT placement can be billed to the school or local government at around ¥380,000 per month. The ALT receives ¥250,000. Add the employer’s share of social insurance — roughly ¥30,000 — and the company’s working margin before recruitment costs, management, and office overhead is around ¥100,000.
That margin sounds reasonable until you factor in what it actually has to cover. Recruiting costs for foreign nationals are not cheap. Administrative overhead for visa management, housing coordination, and school liaison work adds up. And the margin was already compressed to win the bid in the first place.
This is not a defense of dispatch company profits. It is an explanation of why, when you ask for a raise, the person across the table is not being evasive. The room to move genuinely may not exist.
The Race to the Bottom You Never Saw
The bidding system creates a structural incentive to cut costs, not improve quality.
The largest operators in this industry run hundreds — sometimes over five hundred — foreign instructors simultaneously. At that scale, the economics work differently. Thin margins multiplied across a large roster still produce a viable business. A smaller company cannot match that price without cutting somewhere, and the somewhere is almost always instructor pay or support.
The schools, for their part, are often fine with this arrangement. Their budget is fixed. Their expectations, in many cases, are modest — an ALT’s primary function is to stand at the front of the room and model native pronunciation. A native English speaker who shows up reliably technically fulfils the brief. Quality beyond that is, from a procurement standpoint, optional.
Your salary is not low because the market does not value English teachers. It is low because the procurement system that sets your pay was designed to minimize cost, not reward performance.
Why Raises Are Structurally Rare
Once you understand the bidding cycle, the salary freeze makes sense.
The dispatch company’s contract with the municipality runs on a fixed term — typically one to three years. The rates are locked in at the bidding stage. Midcycle, there is genuinely nothing to negotiate against. The company cannot go back to the city and ask for more money because one of their ALTs wants a raise. The city would laugh them out of the room.
At renewal, the company faces the same bidding pressure again. If anything, rates tend to compress further over successive cycles as competition increases. The idea that loyalty and time served translate into salary growth is a reasonable expectation in most industries. In the municipal ALT dispatch industry, it is not how the system is built.
What You Can Actually Do About It
Understanding the structure is not the same as being trapped by it. There are specific moves that work within these constraints — and specific ones that fail every time.
The full breakdown of what those moves are, how to time them, and what to actually say in a contract renewal conversation is here:
Contract Renewal & Career: What “Keepable” Instructors Have in Common
If you want everything in one place — contract negotiation, visa extension, the financial side of year two, and more — it is all in the ALT Survival Manual.
Get the ALT Survival Manual Standard Edition $19 · Premium Elite Edition $39
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