A new NGO-private sector report shows just how much migrant domestic workers contribute to economic growth in the Asia Pacific. Governments must build policies that acknowledge the skills and voices of these workers.
Migrant domestic workers contribute a total of US$21.7 billion per year to the economies of Hong Kong, Singapore, and Malaysia, according to a new report from credit reporting company Experian and Hong Kong NGO Enrich. The three countries employ 760,000 migrant domestic workers who are increasingly important to their hosts’ economies.
But migrant domestic workers face risks to their health, poor living conditions, and pay that is often below the minimum wage. Host countries must recognise their contributions and create policies to improve conditions and protections for the workers. Workers’ rights shouldn’t be tied to their economic worth, but any attention to the positive contributions of migrant workers is a step towards fighting discrimination and promoting social and economic inclusion.
Migrant domestic workers bring skilled labour and economic growth
Across the Asia Pacific, migrant domestic workers have become an essential part of many economies.
“Migrant domestic workers are the unsung heroes of our socio-economic future. Their contributions significantly benefit economies across the region, the families they provide for in their home countries as well as the households they work with and support,” said Sisca Margaretta, Chief Marketing Officer, Experian Asia Pacific.
The number of migrant domestic workers in Hong Kong and Singapore is increasing, but in Malaysia numbers are falling due to rising costs. The cost to hire an Indonesian worker is now around US$3-4.5 thousand per month.
In Hong Kong, more than 70% of the migrant domestic workers work over 13 hours per day. At least one in twenty five workers reports facing physical abuse, but the number is likely much higher as many cases of physical abuse from employers go unreported. Average pay for these workers is below minimum wage in Hong Kong.
To build policies that protect migrant labourers, governments in the Asia Pacific must put the workers’ voices at the center of the process and recognise that migrant workers are often skilled workers. Across the region, one in five migrant domestic workers has attended university. In Hong Kong, the rate is one in three workers. This is due in part to the city’s relatively high minimum wages, although most migrant workers make less than the legal minimum.
66% of migrant workers are involved in childcare and many of them help children to improve their English. Hiring a domestic worker can also free up time for parents, allowing them to spend more time helping a child with their school work, further enhancing a child’s educational development. According to a study in 2014 by The University of Western Australia and The Chinese University of Hong Kong, having a migrant domestic worker in the house helped children to perform 10% better on English exams. English fluency is also one reason that Indonesian and Filipino domestic workers are favored in many countries.
Migrant domestic workers allow women to play a larger role in the economy
Hiring a domestic worker allows women with children to return to the workforce. In 2018, these mothers’ participation in the workforce added US$2.6 billion to Hong Kong’s economy, US$2.6 billion to Singapore’s economy, and $.023 billion to Malaysia’s economy.
In Hong Kong, 110,000 women re-joined the workforce in 2018 because they hired a domestic worker for their children. This influx brought the percentage of women in the workforce from 49% to 78%.
Annual remittances to Indonesia and the Philippines are increasing
Migrant domestic workers from Indonesia and the Philippines are making increasingly large contributions to the economies of their home countries. On average, a sample of 300 workers had more than doubled their household incomes since they moved overseas, after an average of four years working abroad.
The Philippines’ economy now receives a total of US$33.7 billion from overseas workers, while Indonesia sees US$11.2 billion. On average, families spend 59% of this on household expenses and 25% on children’s education, improving the opportunities for the next generation.
Migrant workers send these larger remittance payments home despite prevalent debt. Across the Asia Pacific, 61% of migrant workers are in debt, with the average worker owing 4.5 times their monthly salaries. The rate of debt among migrant domestic workers is highest in Hong Kong, at 83%, while the rate among workers in Singapore sits at 34%.
Enrich has identified inclusion in formal financial systems as a powerful tool to help migrant workers save and make the most of their earnings. Despite their large contributions to their host economies, workers overseas tend not to save money in their host country. Only 52% of those in the Asia Pacific hold bank accounts in the country where they work. At this point, 74% of the workers say they don’t see the need to open an account. This is likely because there are more pressing issues facing migrant workers.If governments are able to first offer the workers protection, then access to financial services will become a crucial next step.
Lucinda Pike, Executive Director of Enrich, said “Despite their valuable contributions, migrant domestic workers often lack the financial access and awareness they need to unleash their full economic potential. Financial education is a life-changing solution that will address this gap.”
Acknowledging that migrant workers often provide crucial, skilled labour for the economies of the Asia Pacific can help reduce discrimination against them. As they continue to drive economic growth, it’s worth asking the migrant workers themselves how host and home country governments could craft policies that lead to better conditions as well as financial opportunities. In the case of Hong Kong, the government could start by abolishing the “live-in rule,” which requires migrant workers to live at their employer’s property. Migrant workers have appealed to change the law already, which plays a large role in relegating migrant workers to a subjugated social class. Governments must ensure that migrant workers are given fair pay, adequate time off, and protection from violence in order to support their growing role in these economies.