Wage Submission of the Asian Migrants Coordinating Body for 2008

Wage Submission of the Asian Migrants Coordinating Body for 2008

Increase the wages of foreign domestic workers now.

This is our just and urgent demand to the Hong Kong government as the annual minimum wage review starts again this March 2008.

After four years and two wage hikes, the current HK$ 3,480 monthly wage of foreign domestic workers still falls short compared to the surging prices of basic goods in Hong Kong and the rising standard of living here.

Despite the steady growth of the economy, the HK government only responded twice in the past four years to our demand for a wage increase with a meager cumulative value of HK$ 210 compared to the total HK$ 590 wage cut they have imposed in 1999 and 2003.

We outline the reasons why we our demand for a wage increase is just, urgent and simply cannot be refused by the HK government to provide us.

Sharing the Benefits of an Improving Economy

Official pronouncements say it all: the HK government aims to share the fruits of an economic boom to the people.

In his October 2007 policy address, Chief Executive Donald Tsang has pledged to cut salary and profit taxes. Finance Secretary John Tsang, on the other hand, is expected by government sources to announce the provision of food, health and other allowances to the elderly and the less unfortunate in his upcoming February 27 address.

The 2007-08 budget surplus, as predicted by the business think tank PricewaterhouseCoopers, is pegged at HK$100 billion, “a record high for the administration and four times the government forecast.”

Already in 2007, various business analysts have placed Hong Kong’s economy at par with the world’s richest countries.

Its GNP has placed Hong Kong as one of the top ten richest countries in the world, with a “robust economy, (with) increased corporate profits and salaries, the buoyant stock market and a stable property market.”

Cited as having “decades of unprecedented growth” in the economy, the Hong Kong’s gross domestic product is pegged by U.S. Department of State Bureau of East Asian and Pacific Affairs at US$ 188.8 billion with a 6.8 per cent GDP real growth rate due to exports and domestic consumption.

The 6.1 per cent economic growth from January to September 2007 was attributed to domestic consumption, the same key factor for growth in 2008 amid recent price hikes. It was also said that “surging rents and wages are set to lead to higher retail prices as the economy nears full capacity.”

Despite its currency being pegged to the plummeting U.S. Dollar, HK economy continues to enjoy “asset bubbles” as indicated by the following factors: falling interest rates, accelerated inflation, substantial wage increases, near-full employment, a consumer spending spree and sustained influx of funds (HSBC Lender).

Economic indicators prove Hong Kong to be in a steady road to development. The government itself has spoken and promised a great deal of economic relief to the people.

FDWs expect no less to be benefited. A substantive wage increase for us this year is a step forward.

The Current FDW wage is NOT Commensurate
with their Labor Input and the Cost of Living in HK

Foreign domestic workers continue to reel from the HK$ 3,480 MAW. As the HK currency is pegged to the U.S. dollar, the exchange rate of their salary to their respective national currencies has detrimental effects on the remittances they send back home.

On top of this, we have cited endlessly the live-in nature of foreign domestic work making it impossible to determine the maximum working hours for FDWs. Aside from being on call 24-hours a day, most of us work between 12 to 16 hours a day, a few others even between 18 to 20 hours a day!

If we are to divide the current minimum allowable wage of HK$3,480 by 12 hours for approximately 26 days, the foreign domestic worker is only receiving HK$ 11.15 per hour. Imagine how much is received by those working beyond 12 hours.

FDWs are overworked and underpaid, especially with the current minimum allowable wage. Further aggravating it is the looming economic crisis that already impacts on both the remittances we send to our families and the expenses we incur due to inflation happening here in Hong Kong.

Although HSBC, HK’s premier bank, forecasted consumer price inflation to edge up to an average 3.9 per cent this year from an average 2.0 per cent in 2007, the figure might rise up to 4.0 per cent or beyond in some months.

Should this happen, all the more should the Hong Kong government extend to foreign domestic workers its assistance and protection from the price inflation.

One cannot deny the fact that we have contributed so much to the HK economy. FDWs contribute around HK$ 13.7 billion to the Gross Domestic Product, or around more than 1 per cent of the total GNP.

In addition, a senior economist from the Economic Analysis and Business Facilitation Unit of HK’s Financial Services Bureau has even commended FDWs for significantly contributing to HK economy. Without [them], he said, Hong Kong women would not have been able to join the labor market.

With meager salaries and a rising inflation, it will be difficult for FDWs to cope. As consumers and active contributors to the HK economy, we deserve to be protected. Our wages should be raised.

Paling in Comparison with Countries of Equal Economies

Being one of the most afloat economies in the world, Hong Kong’s wage system can only be compared to countries of equal economies.

United Kingdom, for one, has a GDP of US$ 1.93 trillion and with a per capita GDP of US$ 31,000. Spain, on the other hand, carries a US$ 1.22 trillion GDP and a per capita income of US$ 27,422.

If we compare the wages of domestic workers in these three economies: foreign domestic workers receive a salary of HK$ 58,750 a year in UK, an estimated HK$ 110,424 in Spain, while only HK$ 41,760 in Hong Kong!

Apparently, Hong Kong would rank at the lowest in terms of providing just wages to FDWs. Clearly, the HK government is not giving enough.

Wage Increase Now!

For years, we have been demanding an immediate, substantive and commensurate wage hike to be implemented by the HK government. Previous wage hikes have only proven to be piecemeal compared to the gargantuan cuts it has imposed on us in the past.

Hence, we reiterate our demands:

1. Increase wages of foreign domestic workers to a level that is substantive and commensurate to the Hong Kong standard of living. Aside from the gradually developing economy of Hong Kong from which we should benefit, FDWs should be able to cope with Hong Kong’s standard of living and survive the looming inflation.

With the rising costs of basic goods and necessities here in Hong Kong, not to mention those in our respective countries, even bringing our wages to the 1999 level of HK$3,860 may not even be enough.

A substantive wage increase is what we need. A living wage is what foreign domestic workers deserve.

2. Remove the HK$ 9,600 levy imposed on employers of foreign domestic workers. This employment retraining levy imposed on employers of FDWs remains unjustifiable and burdensome.

For many years now, the issue of unemployment and underemployment cannot be sufficiently attributed to the presence of FDWs in Hong Kong, much less burden us with the responsibility of training local workers.

Its continuous implementation will only hinder any substantial wage increase on the part of the FDWs as it is our employers, many of whom are regular workers in Hong Kong, who will be burdened by both the increase and the levy.

3. Provide a just, transparent and scientific formula for the minimum wage review. We continue to remain frustrated and surprised as to how the HK government could calculate and justify the passing of the burden of the economic crisis to FDWs, one of the lowest paid service workers in Hong Kong.

In the upcoming wage review, we wish for the Hong Kong government to remain transparent, conscientious and considerate in taking our demands.