Ordinary Gweilo

Simon recently highlighted an interesting report about Domestic Helpers in the Standard, trying to calculate their value to the local economy.

The Asian Migrant Centre have attempted to calculate the economic benefits to Hong Kong of having a large number of foreign domestic helpers. They have arrived at a figure of HK$13bn (which sounds a lot until you realize that it is about 1 per cent of GNP):

Each worker is believed to spend about HK$800 a month in the local economy, the AMC calculates, which generates more than HK$2.3 billion in direct consumption annually. Thirty-six per cent of workers take care of children. This saves employers more than HK$2.1 billion yearly in private preschool fees, which are often more than HK$7,000 a month, the AMC estimates. Ten per cent look after the elderly, sparing families more than HK$2.5 billion a year in nursing home costs.

I think they’re using the wrong argument here. The real economic impact is that it allows more Hong Kong people to work, rather than looking after children or the elderly. In families with helpers, children still go to kindergarterns, so parents haven’t saved money at all. To be fair, the AMC do also argue that employing helpers (on low salaries) enables people to work, but of course it’s almost impossible to put a value on that, so they don’t attempt it. However, the economic advantages to Hong Kong must be quite substantial (though there is a certain irony in the fact that many helpers are very well-educated and could actually do those same jobs themselves if they were allowed to do so).

Anyone who reads the letter column in the SCMP will be well aware of the counter-argument that is usually put forward. Slightly surprisingly, this is echoed in the report:

Hong Kong’s policy of a minimum wage is magnanimous compared to rights offered by other Asian countries, says Kitman Cheung, managing director of the Overseas Employment Centre. He says the the Indonesian government is hoping for even lower [maids’] salaries in Hong Kong so that more people will be motivated to employ workers from there.

It is quite odd that Hong Kong has a minimum wage for foreign domestic helpers, but for no other group of workers. Cynics suggest that this is done not to protect Filipinas, Indonesians, et al, but to discourage Hong Kong people from hiring helpers. In fact, the minimum wage is quite widely flouted, especially for Indonesian helpers, and it is obviously difficult to enforce (and probably not given a very high priority). In an ideal world, workers would be free to come to Hong Kong and negotiate a contract with their employer, but I suppose that the current arrangements are a reasonable compromise.

I am convinced that it almost invariably benefits a richer country to allow people from poorer countries to take jobs that the local population have shunned. There is, of course, a long history of this – for example, 40-50 years ago the British government actively recruited people from the colonies in the Caribbean to work in the Health Service and on public transport.

The “guest workers” (or whatever you call them) will enjoy (or can provide their families with) a higher standard of living than if they had stayed in their home country. In many cases, the economy of the home country also benefits from the money that is sent back to relatives – certainly this is the case for most of the Filipina Domestic Helpers working in Hong Kong. Pretty much a win-win situation, because they also make a significant contribution to the local economy (both directly and indirectly).

Unfortunately, human nature being what it is, the “guest workers” are often treated quite badly. The case of the Chinese cockle-pickers is perhaps an extreme example, but it does demonstrate the level of desperation amongst the workers and the degree to which they exploited by their employers. I guess it’s too idealistic to hope that everyone who enjoys a better standard of living or quality of life as a result of these “guest workers” would be grateful rather than resentful, but at least we ought to treat them fairly.

Hong Kong really couldn’t operate as it does today without the help of long-suffering domestic helpers. Putting a monetary value on that is next to impossible, but the basic point is surely beyond dispute.