The Indonesian government does not regard remittances from foreign guest workers as a principal strategy for economic growth and development, unlike the Philippines, where workers are trained in skills that are in demand overseas. On a visit to Hong Kong in April 2017, Indonesian President Joko Widodo asserted that foreign workers are an interim labour policy as the government gives precedence to training programs to developing worker’s skills for domestic use so that Indonesians will not have to travel overseas to obtain decent wage jobs.
The reliance on labour migration between Indonesia and the Philippines is striking. In 2011, nearly 10.5 million Filipinos were working overseas in a range of occupations, and nearly half were expected to return on the completion of their contracts. In 2013, remittances accounted for $24 billion, 12.65 percent of the country’s GDP. In 2018, about one in three foreign Filipino workers had more advanced skills, from communications, education, business services, to medicine (Philippine Statistics Authority 2017). In 2015, about 4.9 million Indonesians were working abroad, accounting for $7.35 billion in remittances. According to the International Labour Organization, 75 percent were women domestic workers (World Bank 2018).
In Indonesia, one in three workers are in unskilled occupations, though workers employed abroad are trained in a range of skills, from domestic services, communications, education, business services, to medicine. No specific timetable is planned to end foreign labour migration and Widodo does not foresee an end to Indonesian guest workers anytime soon. On a visit to Hong Kong in April 2017, Widodo, compared the treatment of Indonesian guest workers favourably compared to the more oppressive treatment workers experienced in the Gulf States:
And we hope that while we improve and upgrade the qualities and skills of our workers and their professional training, we will head in that direction. Once investments in Indonesia have grown and our economy has grown further, then we won’t need to have our workers overseas. […] I observe that they receive salaries that are pretty good, compared to other countries. I think this is very important. I believe many are happy to be working in Hong Kong (Siu 30 April 2017).
Speaking directly on the migration of young women traveling overseas as domestic labourers, Widodo’s goal does not account for the disjuncture between skills and wages, between the imperial centre and the periphery. While his main goal is to address pervasive poverty and inequality at home, and, the divergence in wages in Indonesia and destination countries for migrant labourers. It is estimated by the World Bank that Indonesian workers can make six times as much in the Arab Gulf or Singapore, Hong Kong, Taipei, and other major financial hubs in East Asia. Even though Indonesian workers may acquire equivalent skills, higher wage jobs in the Global North will always increase the supply of Indonesians seeking jobs overseas. Notwithstanding President Widodo’s rhetoric about reducing poverty and inequality, Indonesia occupies a subordinate position in the global capitalist economy which renders the benefit of the development of skills and training less consequential as global demand for low-cost manufacturing products and services define the specific position of Indonesia in Southeast Asia and the world economy. Indonesia’s competitive advantage is derived from maintaining a surplus of low-waged labourers, from which international finance capital can extract surplus value.
Hong Kong: Nodal Centre of Social Reproduction
As a former British colony, Hong Kong is pivotal to European imperialism and offers far higher wages. Consequently, Indonesian women are leaving villages for Hong Kong for high-wage jobs that are nearly three times that trained office workers can earn in Jakarta. Teresa Liu Tsui-lan of the Technic Employment Service Centre in Hong Kong, a home care consultancy in Hong Kong providing services for 70,000 families, estimates that the city’s more than 1500 employment agencies for domestic agencies seeking to fill the growing demand for maids and home services, maintains that the far higher wages are the major draw rather than a shortage of skills of Indonesian workers (TECHNIC Employment Service Centre Ltd. 2018). “The demand to work abroad will not stop. Many people are still jobless in Indonesia and it’s not so easy to find a job there. The salary there is still low. For an office worker with trained computer skills, an Indonesian could earn US$192 a month. That’s compared to US$555 a month for a maid in Hong Kong (Siu 30 April 2018).”
Thus, as the Indonesian Migrant Workers Union and other advocacy organizations for foreign workers claim, overseas labour migration is principally a result of the lack of decent waged jobs and will continue to grow as the discrepancy between wages in Indonesia and as demand for workers in Hong Kong, Singapore and beyond continues to grow. However, even as wages may be far higher in Hong Kong, Indonesian foreign worker advocacy groups have determined that migrant workers are poorly paid, amounting to what the Hong Kong Coalition of Indonesian Migrant Workers Organization call a system of “systemic extortion (KOTKIHO 2018).”
Indonesian Domestic Labourers in Hong Kong
On a typical summer Sunday afternoon in Hong Kong, the public spaces are teeming with thousands of young women in their twenties dressed in hijabs eating their boxed lunch in groups of ten or more. In Victoria Park, Causeway Bay, or Mong Kok districts, the presence of young women from 18 to 25 is ubiquitous. Mong Kok, in downtown Hong Kong, is a major destination appealing to shoppers of all economic classes, from high end fashion brand outlets to thousands of cramped stalls rented in commercial buildings to small shopkeepers and venders peddling low-cost apparel, sundries, and cheap generic electronic gadgets to young women from the Philippines and Indonesia at a fraction of the price fetched at the international brand showrooms.
Outside, women gather on sidewalks, outdoor flights of stairs, public walkways, and concrete public spaces typically used by office workers going out for a smoke during weekdays. Who are these young women? Are these young women on all-inclusive tours which include packing their own lunches and dining outdoors during rainy season?
Who are the employers of domestic workers? Given the large size of Hong Kong’s population of domestic workers it stands to reason that the employers are far larger than a small fraction of the city’s population. The popular notion of an exploiting class of one-percent against all other workers is not an accurate depiction of the class structure of Hong Kong and other major financial centres. While inequality is growing in Hong Kong between the upper class and low-income working class, a significant share of the city’s middle-income population are employers who exploit domestic workers the Philippines and Indonesia.
Hong Kong and major global cities have large managerial classes employed in the finance, banking, insurance, real estate, and education sectors who are engage in professional services essential for expanding capitalist profits. Political economists Gerard Duménil and Domenic Lévy examine the critical role of managers as accountants and actuaries, bankers, financiers, lawyers, advertising, and other professional positions (Duménil & Lévy). While the economic and social benefit of these jobs are questionable, they have high rates of compensate that grant high levels of disposable income for personal services like domestic work. This managerial class could not function without transportation, food services, personal care and domestic labourers who provide services that we require in everyday life. Political economists regard these services we require for daily life as social reproduction, as they are necessary for human beings to subsist. In most instances, these services are provided within the family, and in contemporary capitalism, mostly by women: child care, cooking, cleaning, personal care. Sociologist Saskia Sassen observes that in neoliberal capitalism, and especially in financial centres likes London, New York, Tokyo, and Hong Kong, low-wage migrant labourers ever more engaged in this essential work for social reproduction (Sassen 2001).
Gender oppression must be understood as prevailing both within nation states and between countries. While the subordination of women is pervasive within capitalist societies it is manifested and expressed in different ways across national boundaries. Indonesians now comprise a majority of Hong Kong’s expansive domestics workers providing child care, cleaning, and cooking services for a large and growing share of the financial centre’s labour force. Now, more than 500,000 women workers are employed in this industry, and projections are that the number of domestic workers will grow to 600,000 by 2030. They now represent a larger share than Filipino workers.
In addition, to the Philippines and Indonesia, there are domestic workers from Sri Lanka, Thailand, Myanmar, Bangladesh, Madagascar and Cambodia. There are some 370,000 domestic helpers in Hong Kong registered with agencies authorized by the city. Officially, then, domestic workers compromise 5 percent of the city’s population. However, according to labour market experts, if those domestic workers who are not registered with official agencies are included, the number exceeds 500,000, or around 8 percent of Hong Kong’s population of about 7.5 million. Officially, about one of every 2.5 families with children in Hong Kong utilize domestic helpers.
Data source: Association of Hong Kong Agencies for Migrant Workers Limited Available at: http://ahka.org/statistic-of-foreign-domestic-helpers.html
Wages and Conditions of Hong Kong Domestic Workers
The minimum wage for Filipino and Indonesian domestic workers in HK $4,410 per month (or about $562 a month). Though this is a low wage for survival in Hong Kong, considering the high cost of living, it is about three times higher than wages for domestic workers in Indonesian cities (Hong Kong Minimum Allowable Wage 2018). Hong Kong authorities require all foreign domestic workers to have decent accommodations within the homes of employers. However, the high cost of living in Hong Kong means that foreign domestic workers cannot afford to live independently and may not have adequate living arrangements. As a result, domestic helpers are subject to various types of abuse by some employers, and some have been compelled to work far longer hours than stipulated by government employment guidelines. Despite continual efforts to improve conditions, violations continue unabated. Thus, a 2007 an ILO sponsored report on Indonesian domestics working in Hong Kong stated:
Underpayment is not the only type of violation of workers’ rights. Abuses are numerous and include violations in the type of work migrants are legally allowed to do, violations in the required weekly rest hours, and violations in allowing the legally mandated days off and holiday time. There is also systematic verbal and physical violence directed toward migrant domestic workers.
The dreadful work and living conditions for some domestic helpers was brought to the public’s attention by organizers this month revealed that a number of employers provided kitchens, store rooms and toilets as accommodations. In addition, many workers were forced to work from 12 to 15 hours a day. In June, the Asian Immigrants’ Coordinating Body (AICB) launched a campaign to demand that the Hong Kong government legislate improved treatment for domestic workers, including demands for shorter work days, higher wages, decent accommodations, and places to stay during their day off. The organizers are canvassing the parks of Hong Kong on Sundays to sign up 10 percent of the city’s foreign domestic servants (Siu 10 June 2018).
It is illegal for Hong Kong’s labour contractors to charge high fees to domestic workers seeking employment. However, a research study conducted by the Federation of Asian Domestic Workers Union (FADWU) from July 2017 to March 2018 found that up to 10 percent of agencies charged from anywhere from eight to twenty times the legal limit for job placements: HK $3500 to HK $10,000 (equivalent from UD $450 to as much as $1150.
Examining the sphere of social reproduction, it is now unavoidable to ignore the global division of labour, and specifically the significance of women and gendered work. We must recognize that conditions of women in the Global South are far more oppressive than in the Global North. Employed in the sphere of social reproduction, migrant workers are not filling manufacturing, public and social service jobs carried out by workers in the imperialist core but are actively recruited by capitalists and managers to work in the sphere of social reproduction. In the past, in the US and West, only the very rich were able to afford services within the household. Women continue to perform this uncompensated work today. However, the share of middle- and upper-income professional workers whose labour is valued and compensated at a far higher rate, using labourers in the sphere of social reproduction within and outside the household has considerably expanded in the neoliberal era since the 1990s.
Note on the Organic Composition of Capital and Social Reproduction of Labor under Neoliberalism
In the manufacturing process, Karl Marx views capitalists endlessly searching for increasing profitability through reducing the organic composition of capital to minimize the workers’ share of production by replacing living labour with dead labour, by introducing new technology; as is demonstrated through growing levels of automation, and robotics and artificial intelligence. However, surplus value is only derived through human labor. The unbounded growth of automation and new technology, relentlessly reduces the rate of profit, directed from the extraction of surplus labour from workers, and thus necessitates monopoly capital to consistently seek the transfer of surplus value from low-waged labour outside the imperialist core. New technology has its limits and as labour exploitation in the capitalist core, ceteris paribus, surplus value also declines. This process drives monopoly capital to seek profits overseas.
In Marx’s Capital, the General Law of Capitalist Production is first and foremost applied to the sphere of production. But, in the sphere of social reproduction of domestic and household work, where the capacity to apply new technology is highly circumscribed, the organic composition does not have the equivalent capacity to decline, even if new advances have to some extent reduced the organic composition of labour. Consequently, demand for domestic services, child care, food services, transportation workers has always been higher in the major financial centres of the imperialist core: New York, London, Tokyo, Hong Kong, Singapore, and elsewhere. And as a result of the difficulty in recruiting labour in the imperialist core, demand for low-waged labour from the periphery has grown exponentially, especially with expanding financialization of capital and the capacity of firms to extract surplus value from these services.
September 10, 2018
Duménil, G. & Lévy, D. (2018) Managerial Capitalism: Ownership, Management, and the Coming New Mode of Production. London: Pluto