Koreans remain reluctant to hire foreign household workers despite gov't efforts

Economy

Published: 06 Apr. 2024, 07:00 Updated: 07 Apr. 2024, 14:03

Koreans remain reluctant to hire foreign household workers despite gov't efforts

Members of the Korean Public Service and Transport Workers’ Union protest the Bank of Korea (BOK) March report that proposed solutions aiming to lower the cost of domestic workers in front of the BOK office in central Seoul on March 13. [NEWS1]

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The Korean government is relaxing visa regulations for migrant household workers in an effort to address the country’s record low fertility rate and rapidly aging society. But many Koreans remain conservative about hiring them, citing high costs and language barriers.

Korea will accept one hundred domestic workers from the Philippines later this year for a six-month trial period. The employees will receive Korea's minimum wage of around 2 million won per month ($1,480), which surpasses the typical wages of their counterparts in Singapore and Hong Kong.

The government, economists and potential service users admit that foreign household workers could ease the shortage of caregivers, which has been pulling the working population away from the job market in order to care for children and parents.

But some Koreans remain concerned that the risk of hiring foreign workers, whose background might be hard to verify, is too high to justify their current cost.

“It would be a lot of financial burden if more than half of our monthly income was spent on a caregiver,” said a 34-year-old housewife and a mother of a five-year-old. “I would only consider hiring a migrant domestic worker if the expense is below 2 million won.”

“I personally think minimum wage should be only applied to Korean nationals,” said a 36-year-old working mother of a five-year-old.

Korea’s minimum wage jumped 18 percent over the past five years.

“I've felt its huge impacts on living expenses,” the mother said of that increase.

The median income for households in their 30s was 5.09 million won per month last year, according to the Bank of Korea (BOK).

Money is a bigger problem for elderly people who have to take care of not only themselves, but also their parents.

“It’s extremely hard for me to take care of my ill mother, as I myself am growing old,” said a 66-year-old homemaker whose mother lives in a nursing home. “My husband’s income significantly shrunk after he retired, but we have to take care of both sides of our parents.”

The average nursing fee for such facilities was 3.7 million won a month last year, up 50 percent from 2016, according to the BOK data.

Apart from the costs, potential employers are concerned about cultural differences and language barriers.

“I’m not willing to hire a foreign domestic worker,” said 31-year-old Kim Young-seo, a working mother of a 2 year-old. “If I need a nanny, I would rather pay more to hire a Korean nanny because I’m concerned about slow language development and the impacts of cultural differences the foreign nanny may have on my child.”

Others bristle at the fact that hiring household workers might involve inviting a foreigner to live in their home. In Hong Kong and Singapore, those who hire such employees are responsible for housing them.

“I personally don’t prefer a live-in domestic worker because living under the same roof is uncomfortable in an apartment,” said a 32-year-old banker on maternity leave. She said she will not consider a live-in nanny unless the person was an Anglo-Saxon who could help her children learn English.

These barriers could give Korean workers an a boost in the job market.

“Considering the advantage Korean household workers have over foreign counterparts in terms of language and culture, they will continue to receive a higher income, a trend that is already common,” said Lee Jeong-hwan, an associate professor at Hanyang University’s College of Economics and Finance.

“But an overall fall in payment for household workers from the influx of foreign workers could also push down Korean workers’ wages.”

The debate over the acceptance of migrant workers was ignited by a recent BOK report that made two proposals to address Korea’s shortage of caregivers.

The country faced a shortage of 190,000 care service providers in 2022, which is projected to jump by between 610,000 and 1.55 million by 2042, according to the BOK data. That would knock the country's GDP down by an estimated 2.1 to 3.6 percent.

One of the proposals was to allow households to directly hire foreign workers, which would not require employers to pay minimum wage.

The system, requiring the creation of a new visa, was adopted in Hong Kong in 1973, Singapore in 1978 and Taiwan in 1992 to pull more women into the workforce.

The monthly salary of migrant domestic workers in Hong Kong ranged between 770,000 won and 870,000 won in 2022. That is higher than the average income of nonprofessional workers in the Philippines that ranges between 290,000 won and 440,000 won. The average monthly salary in Singapore was 600,000 won in the same year.

Households that hire foreigners under the system are required to cover the cost of the workers’ housing, medical care and flights.

“I pay around $900 SGD ($670) to my foreign domestic worker every month,” said Iris Keum, a 31-year-old working mother raising a three-year-old daughter in Singapore.

Including other expenses, like taxes and food expenses, Keum pays around $1,500 Singapore dollars per month.

“You inevitably face an emergency when raising a kid, like when they suddenly get sick, which would affect the job of a parent. My husband and I hardly worry about such occasions thanks to our nanny, who has certainly significantly raised the quality of our lives.”

Keum’s nanny also covers household chores.

The BOK also proposed applying a differential minimum wage to the care service industry.

Both proposals drew strong backlash from civic activists, who condemned them as “racist and inhumane.”

“The proposal is racist and it aggravates the work environment of caregivers,” said members of labor unions, including the Korean Public Service and Transport Workers’ Union, in a protest on March 13.

The members argued that migrant household workers in Hong Kong face unequal treatment compared to other types of laborers and face discriminatory laws and policies.

The BOK acknowledged the potential side effects of its proposals.

“Allowing employers to directly hire foreign domestic workers would make management and supervision of their contracts difficult,” said Chae Min-sok, a lead writer of the BOK report.

“Applying differentiated minimum wage for household workers has also raised concerns for workers of other sectors that worry similar exceptions could be made in their industry.”

Some experts say an unsatisfactory work environment may aggravate the supply shortage.

“Applying a different minimum wage to caregivers could encourage the workers to shift to another industry,” said Chung Su-hwan, associate fellow at Korea Development Institute’s department of public finance and social policies.

“For the successful adoption of foreign domestic workers, financial conditions need to be met. Not applying minimum wage would make it less appealing for them to stay in the job, which could encourage them to shift to another field of work after entering Korea.”

BY JIN MIN-JI, SHIN HA-NEE [jin.minji@joongang.co.kr]