An Overview of Foreign Domestic Helper Salaries Around the World

Foreign Domestic Helpers (FDH) are common in Hong Kong households. They have been part of the city’s social fabric for decades. But what are the economic impacts of their salaries?  An FDH salary has a significant impact on the Hong Kong economy. In this blog post, we will take a closer look at the positive and negative effects of foreign domestic helper (外傭) salaries on Hong Kong’s economy.

Positive Impact

The FDH sector is a vital component of Hong Kong’s economy. The salaries of FDH play a crucial role in boosting the city’s economy. According to government data, there were over 400,000 FDHs in Hong Kong in 2019. These FDHs sent a total of HKD 30 billion to their home countries in 2018. In 2019, this amount grew to HKD 35 billion. The remittances sent by FDHs provide significant economic support to their families back home and also contribute to their local economies. These funds are essential for economic growth in countries such as the Philippines and Indonesia.

Negative Impact

The FDH sector also has some negative impacts on the Hong Kong economy. According to Chief Executive Carrie Lam, the FDH sector creates both positive and negative impacts on the Hong Kong economy. FDH workers are non-citizens, and their employment does not contribute to the city’s long-term prosperity. The high demand for FDHs also impacts local employment in the domestic service sector. Local families that depend on domestic service employment are at a disadvantage when competing with overseas FDH workers, who can offer cheaper labor.

FDH Salaries and Hong Kong’s Economy

FDHs in Hong Kong earn minimum wages set by the government, and their salaries have been rising in recent years. In 2019, the minimum wage for FDHs was HKD 4,630 per month. This salary level has been deemed to be equitable in recent government rounds of discussion.  The entry-level wage for FDHs has risen by HKD 600 since 2017. Salary hikes for the FDH sector have a positive impact on Hong Kong’s economy. As the minimum wage for FDHs increases, it boosts local consumer spending and reduces overall income inequality.

FDH Salaries and the Employers

Employers who hire FDHs also benefit from their employment. FDHs take on domestic work that frees up time for employers to spend on other work or leisure. Given the high demand for FDH employment, local employers can be more productive at work and spend more time doing activities they enjoy. The availability of FDH workers has also allowed owners to increase household activities. These improvements have a significant effect on the overall economy since it boosts productivity in both the workplace and the home.

Conclusion:

In conclusion, FDH salaries have a significant impact on the Hong Kong economy. Their salaries have both positive and negative impacts on the overall economy. The remittances sent by the FDHs play a vital role in their home economies, whereas the availability of low-cost labor may hinder local employment opportunities. As minimum wages for FDHs increase, it boosts the local consumer spending and reduces overall income inequality. The availability of FDHs also encourages productive household activities and improves overall productivity. Hong Kong’s economy will continue to benefit from the FDH sector as long as minimum wages remain equitable and productive, and efficient usage of their work continues to occur.