Trapped in a vicious cycle

By Duncan Wan


370,000 migrant workers. 98.9 billion dollars. This is how much they contribute to the Hong Kong economy. They are the very reason why many Hong Kong locals can go to work, dramatically increasing the labour force and family income. However, this benefit does not apply to everyone. These strong migrant workers are seen as inferior, second-class citizens, and are often disrespected and taken advantage of–especially when it comes to money. Why is this, what consequences do migrant workers face, and what can be done to help?


Many of these migrant workers come from rural areas in the Philippines or Indonesia. The cost of living in their hometowns are extremely low compared to Hong Kong, which is why a monthly salary of 4630 HKD is exceedingly attractive as it can comfortably support their families financially. However, many migrant workers simply don’t have money to pay for agency fees. As a result, roughly 50% of migrant workers end up borrowing money to get to Hong Kong. On top of that, they are charged with absurdly high agency fees which are actually illegal.


The Hong Kong law states that agencies are not allowed to charge fees higher than 10% of their first month’s salary. However, this is often disregarded and many are charged up to 25 times that amount. That equates to 11575 HKD, a huge amount to migrant workers. But even with this money, they feel the necessity to support their families back in their hometown, some with up to 5 children. This makes it difficult for them as they are unable to stay financially stable.


My own auntie had to give her agency around 2500 HKD each month for half a year. When a family’s domestic helper heard, she replied saying how that was already considered low as she had to repay her agency a portion of her monthly salary for 8 months! My auntie had come to Hong Kong with debt. Her father had gotten sick and she had to borrow money in order to pay for the treatment. She was about to borrow money from a loan company to settle that debt, but it would be hard for her to repay her new debt as she still had to pay back the agency and had 2 children back in Indonesia to support. Fortunately, my parents were willing to help her out and gave her a loan with no interest and a low monthly repayment. However, it is not always a happy ending for all. Some migrant workers can spend up to years repaying all their debt because they continue to take loans to pay for hefty agency fees, debt that they already had before working, and for their family.


With little to none financial literacy education, many migrant workers feel hopeless and often turn to brutal loan sharks and companies who exploit them by charging extremely high-interest rates as they know migrant workers can’t borrow money from local banks where interest rates are much lower. However, this is just a temporary bandage on their problem, and they’ll soon be in much more debt than they were before. This is a vicious cycle that explains why a staggering 90 - 97% of migrant workers have some level of debt, causing them to stress out and constantly receive threats and phone calls from loan sharks to pay them back.


Now, take some time and put yourself in their situation. You left your small quiet town and 3 kids 2 months ago and came to Hong Kong where you’re surrounded by gigantic skyscrapers: nothing like your home. You borrowed 6000 HKD to come here, and only get to keep 1500 HKD for the first 5 months. You take care of your employer’s two kids, while you constantly worry about your own. Your kids need money for school, your mom was brought to the hospital, and you’re informed she is in need of an expensive surgery. You are sent a bill you know you can’t pay. Your employer treats you fine, but does not give you the money your mother needs. You have no choice but to borrow money from loan sharks. However, two months later, you simply do not have enough money to pay off your debt, and you constantly receive hostile phone calls, demanding you pay them back immediately. You spend your nights continuously scared of what they could do to you and your loved ones. Your employer receives a phone call from the loan sharks as well, telling them how much debt you are in and tells them they know where your employer lives. They are extremely frightened and angered and you are immediately fired.


The consequences of the scenario above could have been avoided if agencies followed laws and regulations, if the Hong Kong government much strongly reinforced the rules, if loan sharks didn’t take advantage of your situation and lack of knowledge and if your employer had cared enough to help you find guidance in the first place. Of course, not all migrant workers are affected as much. However, most are taken advantage of by agencies and are underappreciated in Hong Kong society.


So, what can be done to help migrant workers? You can introduce them to organizations such as Enrich, which “empower migrant workers to invest in themselves through financial and empowerment education”. They have made a huge impact on migrant workers in Hong Kong by teaching them ways to tackle financial obstacles, and empowering them to invest and prepare for the unpredictable future. Many of their participants have successfully gotten rid of their debt and learned investment techniques, how to better track personal finance, and how to start businesses.


From the outside, Hong Kong may have a stellar reputation as a global financial hub and a strong, wealthy economy. However, what many are not aware of is that migrant workers who are underappreciated, exploited, and vulnerable are the building blocks of Hong Kong’s success. This ugly side is not something we can be proud of, as Hong Kong citizens are benefitting while migrant workers, a major contributor to Hong Kong’s prosperity, are often forgotten and disrespected. As a community, we all must work together to improve migrant workers’ rights, give them more support, and acknowledge the vital role they play.


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