Discrepancies in Foreign Domestic Helper Salaries: A Comparative Study

Foreign domestic helpers (FDHs) have become an integral part of the Hong Kong workforce, with over 350,000 foreign helpers living in the city. This large population of domestic workers has a significant impact on the local economy. In this blog post, we will take a closer look at the economic impact of foreign domestic helper (外傭) salaries in Hong Kong.

Increase in Disposable Income:

The income earned by foreign domestic helpers boosts the disposable income of Hong Kong families, thereby increasing consumer spending. The additional income allows families to spend more on products and services such as restaurants, retail stores, and other leisure activities. The increase in consumer spending, in turn, stimulates the local economy by creating demand for goods and services.

Contribution to GDP:

Foreign domestic helpers also contribute significantly to the gross domestic product (GDP) of Hong Kong. The wages paid to FDHs are included in the GDP calculations, thereby indirectly contributing to the economy. According to a study conducted by the Hong Kong Employment Development Service (HKEDS), the FDH industry contributed HKD 29.5 billion to the Hong Kong economy in 2019, which is equivalent to 1.2% of the city’s GDP.

Job Creation:

The demand for foreign domestic helpers has created a new job sector in Hong Kong that provides employment opportunities to recruiters, training providers, and employment agencies. These supporting industries play a vital role in the hiring and retention of domestic workers, thereby creating job opportunities and contributing to the local economy.

Pressure on Housing:

The influx of foreign domestic helpers into Hong Kong has put pressure on the housing market. Most foreign domestic helpers live with their employers, which has increased the demand for larger apartments or houses. This has, in turn, driven up the property prices of larger flats and houses, making it more expensive for local and foreign families to rent or buy larger homes.

Labor Exploitation:

The high demand for foreign domestic helpers has led to labor exploitation and the violation of human rights. The low wages and lack of legal protection have made FDHs vulnerable to abuse and exploitation by their employers. Steps need to be taken by the Hong Kong government and the FDH industry to protect the rights of FDHs and prevent labor exploitation.

Conclusion:

In conclusion, foreign domestic helpers play a vital role in the Hong Kong economy. The income earned by foreign domestic helpers boosts the disposable income of Hong Kong families, thereby increasing consumer spending. Additionally, FDHs contribute significantly to the GDP of Hong Kong and have created new job opportunities in the recruitment and training of domestic workers. However, the high demand for foreign domestic helpers has also led to negative consequences such as pressure on the housing market and labor exploitation. By addressing these challenges, the FDH industry can continue to contribute positively to the Hong Kong economy and improve the quality of life for all residents.