Around September every year, the Hong Kong government’s Labour Department (LD) would go through the motions of conducting separate hearings on wage increases with migrant domestic worker (MDW) organizations and their employers. By October, it would come out with an announcement on how much the Minimum Allowable Wage (MAW) will be hiked, and it always elicits ridicule from MDWs for being so low because it is usually in the range of HKD 100-200 per month.
The latest increase is only HKD 120, adding on to the previous year’s HKD 5,100. Some groups have actually demanded for HKD 6,000 a month rather than the current, underwhelming HKD 5,220. Hence, the snide remarks after the LD announcement.
I’ve actually been in at least two of those LD hearings as an officer of an MDW support-NGO. One could tell immediately the LD officials are just ticking off a box because of their official reaction at the end of each meeting: they are grateful for the inputs and the demands of every speaker in the room, but they will have to consult employers’ associations as well to strike a balance between the needs of each sector. This “balance” always favors the employers, who keep complaining about the rising cost of paying for the rising cost of elderly or child care and would rather the government freeze MDW wages at the low end if they could have their way.
In a way, this reaction is understandable as most MDW employers are lower- to middle-class people who will most likely clamor for a wage increase themselves to offset any spike in the MAW. This is a situation that the government wants to avoid, as it can have a wider impact on perceptions of the city’s investment competitiveness.
Hong Kong’s need for MDWs is dire, especially as its working population is rapidly ageing. By their own projections, they will need at least 600,000 MDWs by 2047, from the current year’s approximately 368,000. This means the city needs to be seen as an attractive destination for MDWs by having a competitive wage policy. Compared to Singapore and the Middle East, HK has the highest MDW wage, but this city is also one of the most expensive in the world in terms of cost of living.
Within this annual campaigning swirl, there is always the call for a living wage, which sounds sexy to NGO funders but is actually a pointless exercise. It is a concept that is easily understood by local workers, but one that is more complicated when applied to MDWs who are mandated to live with their employers and remit half of their salaries back home. Given that most of them often choose to be included in their host family’s food budget rather than opt for the patently inadequate “food allowance” that currently stands at HKD 1,236 per month, the argument for a living wage then becomes even murkier.
Historically, the wage rates of migrant workers have always been significantly lower than those of local workers. This is because importing labor from developing countries like the Philippines and Indonesia (where wages are much lower) is intentionally more affordable for all types of employers in migrant receiving countries. In Hong Kong, a local caregiver would be receiving anywhere from HKD 10,000 to HKD 15,000 (depending on experience), and this does not even require them to live in with their employers. A local family thus saves at least half of what it would be paying if it were to hire a local caregiver, who is usually paid by the hour. They would also be getting more hours of work from MDWs (averaging 14 hours per day) precisely because they are compelled to stay with their employers.
This exploitation of unequal exchange in currencies and of Global South wages are at the core of labor migration policies by both sending and receiving governments. It is a mutually beneficial arrangement for them in economic and political terms. For the sending countries, it is a social safety valve for chronically high unemployment that could breed domestic unrest, with the added benefits of generating foreign currency through remittance and creating the illusion of development through higher Gross National Income (GNI). For the receiving jurisdictions, it makes the labor market more competitive and cheaper, because migrant wages are always guaranteed to be below local ones. With the very remote possibility that minimum wages and labor rights for both local and migrant workers level out in the future, then the main rationale for importing overseas labor will immediately disappear and local employers might as well be opting for local workers.
While everyone (with the exception of employers) agrees that incremental wage increases are a necessary feature of labor importation, asking for living wages or local-based minimum wages is an exercise in impossibility. What is more relevant is to question the very essence of labor migration and point to sending-governments’ culpability for their lack of political will in comprehensively developing their economies and creating viable jobs at home. Migrant workers only avail of employment abroad because they have no other choice, reaching the point where they find it acceptable to leave their families and risk their disintegration just to earn remittance money for survival.
Once labor importation becomes scarcer and more expensive for their business and domestic sectors, receiving-governments will be forced increase the remuneration of local workers beyond the living wage, leading to greater social mobility. The ultimate solution therefore lies not in perpetually raging against discriminatory wages and working conditions in migrant-receiving jurisdictions, but in striking deep at the developmental roots of labor migration.