Financial Limitation and Exclusion in Hong Kong: Hong Kong's Treatment of Domestic Workers

Financial Limitation and Exclusion in Hong Kong: Hong Kong's Treatment of Domestic Workers

. 3 min read

Jason Hung is a visiting researcher at Stanford University, a Clinton Global Initiative University (CGI U) fellow at Clinton Foundation and a young leader at Pacific Forum.

According to the Human Rights Watch (HRW), some 320,000 foreign domestic workers (FDWs), also known as migrant domestic workers, are employed in Hong Kong. FDWs comprise 10 percent of the local workforce, between 54 percent to 70 percent hailing from the Philippines. Statistics from Hong Kong Government revealed that the number of FDWs citywide is set to rise progressively to 600,000 by 2047. The soaring amount of FDWs working in Hong Kong is, in part, can be attributed to the city’s relatively liberal policy toward foreign workers—the government does not impose any quotas on the number of FDW hires so long as employers and employees fulfill the requisite conditions set out in the standard contract. However, partially because of salient, continual financial limitation and exclusion faced by FDWs citywide, some are concerned whether FDWs could become reluctant to work in Hong Kong in the coming decades, a circumstance that would put Hong Kong’s economic growth at stake.

Alongside the increasing educational attainment of local women, the influx of FDWs within the city has enabled Hong Kong women to join the labour market and seek paid work. This is because FDWs often undertake the time-consuming and physically demanding household duties that local women disdain,  facilitating an increase in the economic activity contributed by the local female workforce. Figures published by the World Bank indicated that female labour force participation rate (LFPR) in Hong Kong grew from 49% in 2000 to 54% in 2018.

Aside from indirect economic contribution, Hong Kong parents are also in favor of hiring Filipino FDWs due to their more competitive English proficiency, relative to FDWs from other South and Southeast Asian countries. Bilingualism is an important asset which helps Hong Kong develop as a major commercial and economic centre at the crossroads between West and East. Hiring Filipino domestic helpers who habitually use English in everyday communication is conducive to the education of Hong Kong children to read and write English, building intellectual and cultural capital that helps generate economic values in the long-term.

A report entitled “The Value of Care: Key Contributions of Migrant Domestic Workers to Economic Growth and Family Well-being” in Asia was commissioned by Experian, a global information services company, in partnership with San Jose-based software company Enrich and published earlier this year. According to the report, FDWs in Hong Kong contributed to an estimated US$ 12.6 billion to the city’s economy, composing 3.6 percent of local GDP. Additionally, only 49 percent of Hong Kong’s mothers aged 25 to 54 would be able to participate in the labour market if they did not employ FDWs. After hiring FDWs, however, the female LFPR increases to 78 percent.

Aside from direct contribution to family wellbeing, employing FDWs also indirectly added US$ 2.6 billion to Hong Kong’s economy. Hiring FDWs for childcare, alternatively, is at least 3 times cheaper than sending children to childcare centers and finding private tutors, further securing the financial wellbeing of Hong Kong households.

In spite of these significant financial contributions to the local economy, FDWs are substantially exploited. It is noteworthy that Hong Kong’s foreign domestic workers are entitled to a minimum wage and are protected under the Employment Ordinance and the Standard Contract for the Employment of a Foreign Domestic Helper. That being said, however, FDWs are paid low salaries. The minimum wage was set at HK$ 4,310 (US$ 551) per month, excluding food allowance in 2017, an increase by 2.3% from the previous year. The wage, with an included food allowance, is HK$ 5,205 (US$ 666). Despite a yearly adjustment of the salary level, the adjustment is often below workers’ expectations.

As compared to FDWs in Singapore and Malaysia, where 51 percent and 86 percent respectively have local bank accounts, only 18 percent of Hong Kong’s FDWs enjoy this same asset. These proportions highlight the demeaning financial exclusion against FDWs within the city. Taking Singaporean Government as a reference, Hong Kong Government should consider applying public policies to mandate employers to pay FDWs through bank accounts and encourage more banks to offer no minimum amounts when opening a bank account.

It is clear that FDWs are a crucial asset to help Hong Kong sustain their economic prosperity. However, the Hong Kong Government is treating FDWs, from the Philippines or otherwise, as foreigners and low-class workers. The Government financially and socially isolates FDWs from wider populations. Local academics and journalists have even dubbed the Government’s practices as an exercise of modern-day slavery.

Without the employment of FDWs, local household revenues would decrease while expenses would increase significantly. If the Hong Kong Government continues their financial limitation and exclusion of FDWs, FDWs may relocate to other neighboring countries, putting the economic sustainability of Hong Kong at stake.

Jason Hung previously worked as a country director of China at Global Peace Chain. He holds an MSc in Sociology at the London School of Economics and an MA in Education, Gender and International Development candidate at University College London.