Filipino workers participating in the foreign caregiver pilot program arrive at Incheon International Airport on Aug. 6 before boarding a bus. After receiving four weeks of specialized training, they will begin working on Sept. 3. Yonhap

The controversial pilot project for foreign caregivers is set to begin in Seoul on Sept. 3, and the debate over the service fees, specifically the wages for these domestic helpers, is intensifying.

Due to compliance with domestic laws such as the Minimum Wage Act, the service fees are set at 1.19 million won ($900) per month for four hours of work per day, and 2.38 million won for eight hours.

The hourly wage for foreign caregivers, which includes indirect costs like the four major insurance polices, is 13,700 won — slightly lower than the comprehensive public child care service (15,110 won) or the private domestic helper hourly wage (around 15,000 won).

Criticism has mounted, especially after it was revealed that nearly half (46.6 percent) of the households applying for the pilot project and a third (37.8 percent) of the selected households are located in four affluent districts south of the river, leading to accusations that the policy primarily benefits wealthy Gangnam parents.

Sarcastic comments about the foreign caregiver program are widespread on social media and online communities, with people asking, "Why should taxpayers support foreign caregivers only the wealthy can afford?" and "Even in Singapore, foreign domestic workers earn less than 1 million won, so why are we paying over 2 million won? Korea is being taken advantage of."

Beneficial for society as a whole?

The debate over the future direction of the policy is divided, with some criticizing it as a policy that only benefits a select few, while others argue that the wage levels should be lowered so that the middle class can also afford to use the service.

The government and ruling party are insisting on maintaining the exclusion from the minimum wage. Following Seoul Mayor Oh Se-hoon and President Yoon Suk Yeol, and ruling party lawmakers have also called for amendments to the system through differential application of the minimum wage.

However, Minister of Employment and Labor nominee Kim Moon-soo has expressed caution, stating that such measures would conflict with the Constitution, international standards and domestic laws.

While lower fees for foreign caregivers may seem appealing to users, would it be beneficial for society as a whole? Labor, welfare, economic and immigration experts are skeptical.

They collectively warn that focusing solely on the immediate benefits of lower costs could lead to significant long-term harm.

Employment and Labor Minister Lee Jung-sik, third from left, and Agriculture, Food and Rural Affairs Minister Song Mi-ryung, fourth from left, visit a farm in Chungju, South Chungcheong Province, Aug. 6 to inspect heat illness prevention measures amid the ongoing heatwave. They held a discussion with the farm owner and Cambodian foreign workers. In rural areas, where young labor is scarce, foreign workers are considered valuable human resources. Courtesy of Ministry of Employment and Labor

Concern 1: Risk of illegal immigration

The first concern experts raise is the potential for an increase in undocumented migrants. With many minimum wage jobs in rural areas and small manufacturing businesses already struggling to find workers, there is a high likelihood that workers will leave the caregiving sector if it becomes the only area where minimum wage is not applied.

As of the end of last year, there were approximately 420,000 undocumented migrants among the 2.5 million foreign residents in Korea, the highest number on record. This suggests that a significant portion of the economy, especially in "3D" (dirty, dangerous, and difficult) jobs, is reliant on this workforce.

Cho Hyuk-jin, a research fellow at the Korea Labor Institute, said, "Korea is not strict on penalizing both undocumented workers and the businesses that hire them," adding that the risk of workforce attrition is very high if the minimum wage is not applied.

While the foreign caregiver pilot project currently involves only 100 workers, a manageable number, if the project expands as planned to 1,200 workers by the first half of next year, managing the workforce could become problematic.

Chang Joo-young, a research fellow at the Migration Policy Research Institute, also expressed concern, noting, "There is already significant demand for undocumented foreign workers in places like factories and farms, so the likelihood of workers leaving caregiving jobs is high. Given the nature of caregiving work, any attrition could significantly impact the safety of the families and children involved."

The current pilot project involves oversight by an intermediary agency, but if the policy is modified to allow private contracts between households and workers in an effort to avoid applying the minimum wage, the responsibility for managing the workforce could fall on individual households.

Members of civic groups, including the Korean Women's Workers Association, hold signs reading "Stop Introducing Modern Slavery" during a public hearing on the foreign domestic worker pilot program hosted by the Ministry of Employment and Labor at the Royal Hotel in downtown Seoul, July 31 2023. (Photo by Korea Times Archives

Concern 2: Devaluation of care work

The second concern is the potential degradation of care work. If wages for foreign workers are lowered, it could lead to a decrease in wages for domestic care workers as well, causing even the existing workforce to leave.

A significant portion of domestic care workers are middle-aged or older women, with few young people or men entering the field, and the industry has long struggled with labor shortages. The reasons are clear: care work is not seen as a stable, well-paying job that is respected by society.

According to various studies, the average monthly wage for care workers is between 1.5 million won and 1.6 million won, and full-time jobs are rare even when minimum wage is paid.

Hong Seok-cheol, a professor of economics at Seoul National University who served as a standing member of the Presidential Committee on Ageing Society and Population Policy, said, "The biggest downside of not applying the minimum wage is that it could devalue the entire care market. To address the labor shortage in care, we need to enhance the value of care work, but this move could do the opposite."

He also questioned whether the gaps left by domestic workers exiting the field could be fully filled by foreign workers, emphasizing that the approach needs to consider the long-term impact on the entire market, not just the short-term cost reduction.

A group of Filipino workers joining the foreign caregiver pilot program arrive at Incheon International Airport on Aug. 6. Yonhap

Concern 3: Need for consensus on coexistence

Another concern is that reducing wages could make it more difficult to secure workers, as foreign domestic workers have many other options.

For example, the Philippines, a major source of care workers, sends around 170,000 women abroad each year to earn foreign currency, not only to nearby Southeast and South Asian countries but also to the U.S., Canada and Europe, where wage levels are higher.

An official involved in the policy implementation hinted that the issue Korea must consider is securing enough workers, noting that other advanced countries also face a shortage of care workers.

In Japan, for example, foreign caregivers are paid the same minimum wage as domestic workers. It was also reported that during negotiations, the Philippine government was firm on the issue of applying the minimum wage.

Professor Yoon Ja-young of Chungnam National University said, "Korea's Employment Permit System has been favored because it ensures the same minimum wage for both domestic and foreign workers and is strictly regulated. If wages are lowered, the incentive to work will decrease, making it difficult to set an appropriate wage level even if it falls below the minimum wage."

Hong also said, "There is no guarantee that lowering the price will ensure a supply of workers, given that many countries are competing for Filipino care workers."

Additionally, there is a need for social discussion about the societal and cultural changes that could result from a policy direction aimed at lowering prices to make the service more accessible to the middle class.

With approximately 1.35 million households with children under the age of 6, relying on foreign workers for part of child care instead of public or domestic workers could lead to tens of thousands of new immigrants, especially in the Seoul metropolitan area.

This raises the question of whether Korean society is prepared to coexist with these newcomers. Yoon said, "Until now, foreign workers have primarily worked in 'invisible' sectors like rural or undesirable jobs, but if they start providing face-to-face services in care work, social conflicts or discrimination could arise."

Kim Jin-seok, a professor of social welfare at Seoul Women's University, said, "While there is no fundamental reason to block the influx of foreign workers, there is concern about whether Korean society is equipped to effectively address potential discrimination and conflicts, especially given that issues related to the treatment of domestic care workers have not been addressed adequately."

This article from the Hankook Ilbo, a sister publication of The Korea Times, is translated by a generative AI and edited by The Korea Times.