On the Two Opposing Views on the Wage Struggle of Foreign Domestic Workers in Hong Kong

On the Two Opposing Views on the Wage Struggle of Foreign Domestic Workers in Hong Kong

A Critique of the Joint Position Paper of the Coalition for Migrants’ Rights and their Allied Groups entitled “Wage Protection for Foreign Domestic Workers in HK!”

17 March 2005

Last March 13, the Coalition for Migrants Rights (CMR) and their allied groups launched their “FDW Wage Protection Campaign”. The said campaign, its analyses and calls, were expressed in a joint position paper signed by the CMR, the HK Coalition of Indonesian Migrant Workers Organization (KOTKIHO), Asian Migrant Centre (AMC), Migrant Forum in Asia (MFA), Akbayan-HK, and the Alliance of Progressive Labor-HK.

We do not know if this joint position has been deeply discussed and analyzed by the signatories. Nevertheless, we are issuing this critique to clarify our position among our members and other networks that may have received the said joint position paper. For purposes of brevity, we used “CMR and its allies” to refer to the signatories whether or not they actually agree to the entire paper.

The United Filipinos in Hong Kong (UNIFIL-HK) has chosen to issue this critique because we are disturbed by the said analysis and calls. We are disturbed because the line that the campaign carries, though at first glance may appear really for the migrant workers, will reveal otherwise with further analysis. Not only are we disturbed but we are also alarmed that their analyses and calls may spread without being challenged, sow confusion among the ranks of migrant organizations, and also create a rift between migrants and the workers and local peoples of Hong Kong.

“Wage protection” is the rallying call of this campaign. They said: “In 2005, CMR and partners are reviving the campaign on “FDW Wage Protection”. This wants to focus the campaign back on the real issues faced by FDWs, and promote FDW (not employers’) interests.”

Under the banner of wage protection, the campaign includes: 1. Stamping out underpayment and overcharging of recruitment agencies; 2. Converting the levy into a “Protection Fund for FDWs; 3. A two-step wage increase in two years – 6% in 2005 and 12% in 2006. Thrown in for good measures are FDW social security protection, a call for consultation with registered FDW trade unions in policy changes and “related demands” that includes the abolition of the two-week rule or the New Conditions of Stay (NCS).

The campaign’s centerpiece is the call to convert the levy for hiring FDWs implemented by the Hong Kong government in October 2003, into a “Protection Fund for FDWs” supposedly to solve “factors that erode our wages (e.g. underpayment, high recruitment fees). Even though they claimed that the “CMR’s primary campaign is wage protection and wage increase”, the wage hike campaign for them will “simply recover the 2 wage cuts (1999 and 2003), and bring back FDW MAW to 1998 levels”.

For the CMR and the other groups, the call “to abolish the employers’ levy only serves the employers’, not FDWs’, interests.” Obviously, they want to say that the campaign to abolish the levy, which the Asian Migrants Coordinating Body (AMCB) to which UNIFIL is a member of, is a pro-employer campaign. They want to say that the 12,000 FDWs who marched with AMCB on February 2003 against the levy are pro-employers. Even the local workers and trade unions who called to abolish the levy are pro-employers. In short, they claim that their “levy as a protection fund campaign” is the one that is really pro-FDWs.

I. How did they arrive with such an analysis?

The position paper immediately placed the issues of underpayment and overcharging to build their justification. They said that “underpayment is one of the most widespread forms of abuse against FDWs in Hong Kong… is linked to the excessive fees charged by recruitment agencies”. Thus, “for these FDWs, any wage hike is meaningless, and only serves to intensify the underpayment that they suffer”. For them, solving the underpayment and overcharging problem is “one of the first and most immediate steps needed to raise the actual wages of FDWs”. This they said is possible if only the HK authorities were more efficient.

From here, the CMR and the signatories proceeded to say that the the levy was implemented “to generate at least HK$1 billion every year” for the HK government. They clarified that their opposition to the wage cut and levy in 2003 was from their “principled opposition … not on the employers’ levy itself – our protests were against the INTENDED USE of the levy, and the PROCESS by which it was implemented (government selling-off the FDWs to lessen employers’ resistance to the levy).”

Furthermore, the levy, for them, is an issue of employers. Therefore, “the employers should defend their own interests, not the FDWs.”

For them, FDW opposition to the levy means a campaign to ” DECLARE & USE THE LEVY AS A PROTECTION FUND TO COMPENSATE AND PROTECT FDWs AGAINST EMPLOYERS’ ABUSES.” The levy for them is “one powerful weapon that is now available to FDWs – a financial bond/guarantee, already paid by the employers and readily available – to make them pay/responsible if they commit any underpayment or violation of the FDW contract”.

In relation to their other demands, they further believed that social security like the MPF is part of wage protection because it “can also be a used to detect and stamp out underpayment/illegal employment”.

Tempting calls and demands if one will not make a deeper analysis.

II. But what do they really mean and what do we say about it?

A. “Give up the wage increase fight as immediate struggle of workers”

1. The CMR and their allies’ call for a wage increase is incidental and a lipservice. They put this demand as no. 3 in their list. It is not a primary call for them because, as they said, it is to “simply (a very revealing choice of word) recover the two wage cuts”. For them, the primary problems of FDWs are underpayment and overcharging and not the fact that the wage of FDWs is basically exploitative.

2. Their placing of the demand to stamp out underpayment and overcharging as a top demand is a reminder of the line peddled by Mr. James Tien – chairman of the Liberal Party and one of the main proponents of the HK$400 wage cut in 2003.

That time, Mr. Tien used as a springboard the issues of underpayment and overcharging of recruitment agencies in order to deflect the issue of the wage cut. Simply, what he wanted to say then was overcharging and underpayment were the main problems of FDWs and not the actual wage level. Isn’t this what the CMR and their allies want to say now?

Have they forgotten this fact? Haven’t they realized that this line can be used by the Hong Kong government, has already been used in fact, to veer away from the main issue of just wage increase for all FDWs? This makes the CMR analysis even more dangerous.

3. Nobody can deny that overcharging and underpayment are two of the most prevalent problems of FDWs in Hong Kong. These problems should indeed be addressed. It is, however, misleading to say that stamping out underpayment and overcharging will increase the wages of FDWs. This is deceitful and illusory!

The fight for a wage increase is a fight to increase the MAW. Resolving underpayment and overcharging will only increase the take home pay of a specific section, those who are victims of underpayment and overcharging. It does not address the current low and exploitative MAW. So what happens then to the rest of the FDWs?

The demand for a wage hike thus remains to be the main struggle of FDWs. It is in the interest of all FDWs. This also includes those victimized by overcharging and underpayment who, if they win their cases against their employers, will receive more than the current HK$3,270. That is a real wage increase.

4. The CMR and its allies call for a two-step wage hike. They opted to lower the wage hike demand to HK$200 (6% this 2005) and tried to make it acceptable by injecting a demand for a 12% increase in 2006.

We wonder, why not 18% now? Is it because for the CMR, a wage hike of more than 6% is out of the capacity of the HK government to implement? If this is so, isn’t the CMR becoming an apologist for the HK government? Or this time, the CMR suddenly shifted to become pro-employer, thinking that the employers may not be able to afford the salary to HK$3670 now?

Even in any negotiation, one primarily holds on to the just and reasonable maximum demand. To lower the demand without fighting for it in the first place is nothing but a sellout.

5. They failed to provide a distinction that is even used in the legal arena between wages and benefits. Thus they fell into the trap of misrepresenting social security protection like the MPF as “effectively” giving “a 5% wage hike to FDWs”. Wages, employment and social benefits are three different issues. To confuse the expansion of employment and social benefits as a wage increase is false and practically reduces and sidelines the fight for the actual worker’s wages.

B. “Yes to the levy! Anyway, the employers are the ones paying for it.”

1. For the HK government, hiring of FDWs is a privilege. Thus, employers should pay a tax to hire them. As a further refinement though, the HK government justified it under the existing Employee’s Retraining Ordinance. Now, the CMR and its allies, like the HK government, want the FDWs, the workers and the local peoples to accept the levy.

What they don’t want to recognize is the fact that the levy is actually regressive taxation towards ordinary working people in Hong Kong that are made to suffer the burden of the HK economic crisis.

To transform the levy into a “protection fund” is just trying to make pretty the form of an essentially stinking policy and make it more acceptable.

From the onset, it has been clear that the levy will benefit only the Hong Kong government because its main aim is to generate revenues (which incidentally, they did admit in their paper. We wonder what for?). It was implemented to resolve Hong Kong’s budget deficit by raising money formally from the employers of FDWs and practically from the FDWs themselves through the HK$400 wage cut.

2. Regressive taxation is a prescription of neo-liberal policies. It has been the experience in many countries that whenever an economic crisis hits, the governments automatically push through with taxation that targets the workers and ordinary people. It does not matter that the crisis itself was brought about by the implementation of neoliberal policies.

If this is so, aren’t the CMR and its allies subscribing to neoliberalism by agreeing to regressive taxation? Considering that the World Trade Organization is the main vehicle for advancing neoliberal policies, doesn’t it translate to support of the WTO? And we thought that they were against WTO!

3. The CMR and its allies also gives false hopes that the proposed “Protection Fund for FDWs” can serve as a “powerful weapon” to distressed FDWs. They claim that it would be “readily available” compensation for FDWs with cases against their employers.

But don’t they know that even compensation follows from due process? No system gives compensation just because one claimed of underpayment or any other violation. Compensation is given only AFTER the case has already been resolved. Once this happens, abusive employers are obliged to pay.

So this means that the said protection fund is NOT readily available as they want us to believe. More so, wouldn’t this protection fund, if established, suffer the same bureaucratic problems as that with the current Labor Department’s grievance mechanisms?

4. We are wondering why they seem to be so excited about this formula as if it was something new and exciting. Haven’t they heard of the Wage Insolvency Fund which supposedly guarantees salary claims of aggrieved FDWs/employees whenever employers declare bankruptcy? This approaches, if not already mirrors, some of the functions of their proposed “Protection Fund”.

5. More than these, they overblow the “Protection Fund” as a “deterrent”, if not the solution, to the problem of underpaid FDWs. We beg to disagree.

On the contrary, the existence of the levy as a “protection fund”, only gives license to unscrupulous and abusive employers to further violate the rights of FDWs . Since they have already paid the levy, these abusive and unscrupulous employers would think that they can continue abusing FDWs because anyway, the abused worker can get “compensation” and “protection” from the fund which they paid already. The proposal reduces the legal responsibilities of unscrupulous employers. It potentially exposes the FDWs to more abuses.

6. For them to simplistically say that underpayment and overcharging can be stamped out by the Hong Kong government and that their proposed “protection fund” would “finally end the sufferings” of those underpaid and overcharged FDWs, is exaggerated and messiahnic.

For example, how can an underpaid or overcharged Indonesian migrant’s suffering be finally ended with just receiving her claim from the so-called protection fund while not addressing the reality that the Transmigration Decree of the Indonesian government is still in effect? The potential for these violations to be repeated is still there.

The problem of underpayment and overcharging is systemic and is not simply between FDWs, their employers and the recruitment agencies. This is a by-product of deregulation and privatization of overseas placement. Prevailing policies of both sending and receiving countries affect the incidence of these problems as well.

Without addressing the root causes of the problems of forced migration and the labor export-import industry, these sufferings cannot be finally ended.

C. “Employers are the enemies”: Threatening locals’ and migrants’ solidarity

1. The proposal to transform the levy into a “Protection Fund” threatens the solidarity of local workers and people and migrant workers. It puts us into the hands of the government’s agenda of pitting the workers against each other. Isn’t this a sabotage of worker’s and people’s solidarity?

Even local domestic workers – the supposed beneficiary of the levy – through the local Hong Kong Domestic Workers General Union, did not support the move. It has always been clear that neither the local workers nor the FDWs will benefit from the said regressive tax. The local domestic workers even said that they were used as scapegoats by the government to implement the levy. Now here are the CMR and its allies throwing their support to the levy with their own version of refining the policy. Isn’t this ironic?

And why is it that they say that retraining of local domestic workers should be the responsibility of the Hong Kong government while saying at the same time that the “protection” for FDWs should not be the responsibility of the HK government and should be borne by the employers through the levy?

2. Of course it is obvious that we need to fight against unscrupulous and abusive employers. However, majority of employers of FDWs are not the Tung Chee Hwas, Donald Tsangs, Li Ka Shings and Stanley Hos of Hong Kong. Many employers of FDWs are the civil servants, teachers, ordinary employees and service workers. They are the ones who are members of trade unions, worker’s organizations, and community associations. These are the people whose wages were also cut and were also burdened by the past years’ economic problems. These are the same people who are also seeking wage hikes and social services from the government. For them, having FDWs is not a privilege but a necessity because it frees other members of the household to work for added income.

The CMR and its allies misrepresent the employers as one class. They even went to the absurd belief that the official Employer’s Association led by Joseph Law speaks in behalf of ALL employers in Hong Kong and from there branded ALL employers as anti-migrant. What will those employers who are members of the civil servants union, for example, say about this? There are even migrants who have become residents here and employ domestic helpers. How could the CMR and its allies face them and say that it’s alright for them to pay the levy?

Their support to the collection of the levy from the employers endangers the unity that the migrant workers and the local workers and people can achieve to struggle against this regressive taxation policy brought by neoliberalism.

3. Because the CMR and its allies narrow down the issues into an employer-FDW conflict of interests without analyzing the class composition of FDW employers, they deny some commonalities of the migrant worker’s and the local worker’s struggles for just wage, jobs and worker’s rights. They try to limit the interests of the migrant workers to only those that benefit the sector. They are saying: “It’s alright that others suffer as long as we benefit.” Where is solidarity in that?

D. “You are pro-employers; We are pro-workers”: Dividing the ranks of migrants

The analyses and line of the CMR and its allies, we believe, can be used by the Hong Kong government to counter the FDW demands to bring back the HK$3670 MAW and to abolish the levy. It will sabotage the struggle because it will give an excuse to the Hong Kong government not to give in to the demand by using the reason that not all FDW organizations want the wage to be brought back to HK$3670 and that the levy should be scrapped.

The whole line that they carry is like cold water poured over the burning calls for wage hike and against the levy. By accepting the levy and putting the wage hike demand into the sidelines, they appear to tell the FDWs that the fight could not be won. This is the defeatist attitude that will gravely affect the strength of the ranks of the migrant workers not only in the current fight but also against future policies that will again attack our rights and wellbeing.

III. What are the real issues?

The two opposing views are reflected in the conflict of calls and demands. Will it be wage protection and transformation of the levy as a protection fund? Or should it be “Bring back HK$3670 and Abolish the Levy”?

But underneath this struggle of demands within the sector are two opposing lines and principles regarding the issues and demands of the sector and the course of struggle that has to be taken.

From our perspective, and as we have explained in the critique, the CMR and its allies have viewed the issues of migrant workers from a purely economic point of view. Having this view means:

• Misrepresenting an increase in take home pay, expansion of employment and social benefits, and resolving cases of underpayment and overcharging as actual wage increases and thus giving up the fight for wage increases as secondary
• Claiming that having a protection fund will “finally end the sufferings” of underpaid and overcharged FDWs
• Accepting the levy and taxation because it does not come from the pockets of the migrant worker and especially if it will benefit them even at the expense of the ordinary local people
• Reducing the issues as between FDW on one side and employers and the recruitment agencies on the other while failing to understand and address the systemic roots of the issues
• Agreeing to neoliberal regressive taxation policies of the Hong Kong government
• Creating the false hope that through consultation and policy advocacy to governments alone, we can effectively stamp out the problems especially that of underpayment and overcharging which in effect passes the solution to government and diminishes the role of the migrant movement as lobbyists and consultants of governments

We should never forget that the wage of workers is always not commensurate to his or her work. Thus, the fight for a wage increase of workers is inherent, ever-present, urgent and just.

Our struggle for wage increase will not, however, end even when we are able to bring back the HK$400 that was slashed from our wage. The struggle for a just wage is a continuing fight of all workers.

While we strive for a wage hike, we should also never let go of our call to abolish the levy. Not only because it was practically charged to FDWs, but also because, in itself, the levy is regressive taxation of the workers and ordinary employees in Hong Kong that are made to suffer the burden of the economic crisis.

The two demands though distinct from each other are not separate. First and foremost, the levy was shouldered by FDWs through the HK$400. This is the argument that the Hong Kong government wishes to destroy. To admit that this is so is to make the levy and the wage cut not only unjust and immoral but also illegal. Thus, Judge Hartmann, in his decision in favor of the HK government on the judicial review of the levy, tried to highlight the distinction between the two.

To abolish the levy serves the interest of employers the majority of whom are ordinary working people in HK. It helps to rally and educate the local working peoples against regressive taxation and neoliberal policies. And it indirectly benefits the immediate demand of the FDWs because it pre-empts potential opposition to the call to at least bring back the MAW to HK$3,670.

We must understand that wage cuts and regressive taxation are both instruments of neoliberal policies. The migrant workers and local peoples both experienced wage cuts during the financial crisis. While the levy was imposed on the local people, the migrant workers practically shouldered it for now. In this sense, we have been both victimized by regressive taxation. In effect, migrant workers and majority of local peoples have both been targeted by neoliberal policies. And that is our common enemy.

In this continuing campaign, the unified ranks of the migrant workers are crucial. We shall hold on to the lesson that only through unified actions can we achieve our demands. Also, we shall always strive to stand in solidarity with the local peoples in Hong Kong for we are essentially both victimized by policies that only serve a few and deny the rights of many.

The UNIFIL is steadfast in our immediate twin demands to bring back the HK$3670 MAW for FDWs and the abolition of the levy. We shall continue to pursue this campaign alongside the rest of the issues that violate the rights and wellbeing of migrant workers.

We welcome comments from the signatories and hope that this critique may urge them to consider reviewing the position they have taken. Having in mind the interest of the migrant workers and their movement, we look forward to your response. #