Demand for Indonesian maids likely to fall in Singapore after pay rise

The increase in minimum pay for maids from Indonesia from $500 to $550 applies to those coming to work here from January and those renewing their contracts next year.
The increase in minimum pay for maids from Indonesia from $500 to $550 applies to those coming to work here from January and those renewing their contracts next year.PHOTO: LIM YAOHUI FOR THE STRAITS TIMES

SINGAPORE - With the minimum pay for Indonesian maids set to rise from $500 to $550 in 2016, maid agencies in Singapore expect to see a fall in demand for them with the wage hike.

But they do not expect this to last for too long.

"After the second month, the market tends to adapt," said Mr Gary Chin, managing director of maid agency Nation Employment, citing the experience from a previous wage hike.

The previous increase was in September last year, when the minimum pay for Indonesian maids rose from $450 to $500.

The Indonesian Embassy announced the latest increase in a letter in October to Singapore maid agents. One of the reasons cited was to protect the income of Indonesian women who go abroad to work. Singapore agents have to abide by the minimum wage or risk being banned.

  • COMPARISON OF MINIMUM WAGES

  • Minimum monthly salary of domestic workers from three most popular countries

    INDONESIA

    From $550 starting in 2016

    THE PHILIPPINES

    From US$400 (S$570)

    MYANMAR

    From $450

    Seow Bei Yi

 

There are about 125,000 Indonesian maids here, making up around half the foreign domestic worker population.

The increase applies to domestic helpers coming to work here from January, and those renewing their contracts in 2016.

While demand may stabilise in the short term, in the longer term wage hikes may cause employers to look for maids from elsewhere, said Mr Benny Liew, director of Comfort Employment.

While Filipino maids were in great demand in the past for their command of English, they are less sought after now, partly because of their higher starting salaries of US$400 (S$570).

Ms Dione Yap, 43, who is self-employed, said salary was among her considerations when she hired a maid from Myanmar.

The pay for an experienced Myanmar maid is around $500, comparable to the basic pay for a fresh hire from Indonesia.

Sales executive Fiza Sulaiman, 32, said she already pays her Indonesian maid around $550 each month and does not think she will be affected much.

She added that the pay rise was good for maids who do not often get one from employers.

According to Mr Liew, the wage increase may also lead to more people renewing their maids' contracts - instead of terminating them for new hires - and conducting private negotiations to pay them less than the minimum wage.

The smaller maid agencies expect to be harder hit by the new minimum pay.

Ms Sa'diah Saidi, owner of SJ Global Employment, said most of the maids she places are from Indonesia but she may have to look to Myanmar or Cambodia if wages continue to rise.

Some agents in Indonesia have also stopped recruiting in the meantime until they are clear on the new regulations, so supply may shrink.

She added that if wages continue to increase, it may become a luxury for middle-income families to have a maid, even if they need one.

A version of this article appeared in the print edition of The Straits Times on November 12, 2015, with the headline 'Demand for Indonesian maids likely to fall after pay rise'. Print Edition | Subscribe