Competition Commission Should Not Block Attempts To Improve Employment Conditions Of Domestic Workers

This was sent to TODAY and published on 10 October 2011.

We disagree with the Competition Commission of Singapore’s decision, “16 maid employment agencies fined for price fixing” (Oct 1), for a number of reasons.

The policy of excluding foreign domestic workers from the Employment Act and leaving their wages to the free market has led to low wages, with little improvement over the years, and poor working conditions.

Meanwhile, the Philippine government has mandated a minimum wage of US$400 (S$519) for its citizens going abroad. In Hong Kong, minimum wage laws mean that domestic workers earn at least S$595 a month. They are entitled to days off, public holidays, annual leave and maternity leave.

The National Wages Council also excludes domestic workers in its wage recommendations and has ignored calls to include them in its annual deliberations.

Without minimum wage laws or trade unions to improve the wages of migrant domestic workers, the CCS should refrain from blocking reasonable attempts to improve their employment terms.

In the first place, the market for domestic workers is distorted, with their salaries artificially depressed and their numbers here constricted.

For example, the imposition of a levy has significantly interfered with the operation of the market, resulting in extra costs to the employer with no benefit to workers. An initiative to increase their salaries would go some way to remedy this.

In addition, the requirement for FDWs in Singapore to pass entry tests and meet other eligibility criteria has erected barriers to entry, thereby restricting the numbers who are able to work here.

As such, industry attempts to correct these market distortions are prima facie not anti-competitive and should be allowed. The 16 agencies’ stated objective in discussing a salary increase was to attract more Indonesian domestic workers to Singapore rather than to limit their numbers.

There is evidence of prospective Indonesian workers preferring Hong Kong and Taiwan instead of Singapore because of the depressed salaries and less conducive working conditions here.

We contend that the CCS decision is driven primarily by what is good for employers. However, employers and FDWs are both paying clients of an employment agency; interests should not be disproportionately and unilaterally weighed toward the former.

Lastly, to subject domestic workers’ wages to the same treatment as goods and other services is to suggest that persons are to be treated and valued like commodities.

Welfare and wages for domestic workers, like any other employee in a workplace, should not be viewed similarly to how one would assess trade in coffee, gold or oil.