Introduction of Foreign Domestic Workers in South Korea: Is High Wage a Barrier?

This blog post explores the South Korean system for foreign domestic workers

Seoul's pilot program to introduce foreign domestic workers has recently gained attention, with both anticipation and concern emerging. As domestic workers from the Philippines arrive in South Korea, one key issue stands out: the high wage level. This blog post explores the South Korean system for foreign domestic workers, comparing it to other countries and examining the social implications of this wage disparity.

Seoul has initiated a pilot program to meet the growing demand for domestic labor by introducing foreign domestic workers. As part of this initiative, 100 domestic workers from the Philippines have recently arrived in South Korea, where they are expected to work eight hours a day, five days a week. However, the monthly wage for these workers is set at a significant 2.38 million KRW (approximately $1,800), which is over five times higher than what Filipino domestic workers earn in Singapore under similar conditions.

The primary reason for the high wage in South Korea is the application of the country's minimum wage, set at 9,860 KRW per hour. This rate is considerably higher compared to Hong Kong and Singapore. In Hong Kong, there is no minimum wage applied to foreign domestic workers, and in Singapore, wages are negotiated between the sending countries and the government, resulting in much lower pay levels.

Seoul Mayor Oh Se-hoon has pointed out that these high wages may prevent middle- and low-income families from being able to hire foreign domestic workers. In response, the Bank of Korea suggested a private contract model, which could circumvent the International Labour Organization (ILO) regulations. This model would allow foreign domestic workers to be classified as self-employed, rather than employees, thereby exempting them from the minimum wage requirements.

The introduction of foreign domestic workers in South Korea could offer a new solution to domestic labor needs, but the high wage levels present a significant barrier. How South Korea addresses this issue will determine whether more households can benefit from the program. Striking a balance between cost and efficiency will be crucial for the program's success.