NEWS – Domestic Workers Receive Pay Increase… But Lose Money

On September 31st, Hong Kong’s Labour Department announced that the minimum allowable wage for domestic workers will increase by HK$100 per month. The figure is a 2.5% increase on their previous monthly salary of $4010.

The increase will only apply to new contracts signed after October 1st of this year. Domestic workers with existing contracts and those who signed contracts in the days before the announcement will have to wait until their current contract expires before obtaining the wage increase. Domestic workers who do not get food from their employers will also receive an additional $44 per month for food allowance.

via Stefan Irvine

via Stefan Irvine

The announcement was met with little joy however, as Hong Kong inflation has increased by 3.6% over the past year according to the Census and Statistics Department. The result is that domestic workers are actually earning less than they did a year ago.

Inflation based on consumer prices in Indonesia and the Philippines, the origin countries of most of Hong Kong’s domestic workers, increased by 6.4% and 3% respectively, according to the World Bank.

Domestic workers receive one rest day each week, working 313 days each year without taking into account public holidays. Given an 8 hour work day, the hourly wage falls just below HK$20 per hour (US $2.5), though most domestic workers report they work more than 8 hours each day. Hong Kong’s minimum wage for other workers is $30 per hour.

Decreasing domestic workers’ effective salary is a questionable approach to encouraging more to migrate to Hong Kong, given the recent shortage of supply.