Why it’s so hard for Taiwan’s migrants to save money

Joe De La Rosa, 27, is a Filipino dreaming big in Taipei. Every day for six days a week, he wakes up at 4am, takes breakfast and then bikes to his factory. There he cuts plywood and works for 12 hours. The work is hard, but he said he did not mind.

"It's okay. I am making money and have a plan. After I finish this job, maybe I'll go to New Zealand," said De La Rosa, a graduate in airport customs who wants to open a restaurant once he is in New Zealand.

"I can cook, of course. Any culinary dish, I can make it good if I have jalapeños."

So far, though, saving up for his future has not seen any success: in the three months that he has been in Taiwan, De La Rosa has yet to put aside any part of his earnings for himself.

Each month on his 25,000 Taiwan dollar (US$822) salary, he pays out for room, plus a 1,800 Taiwan dollar service charge to his Taiwanese labour broker. By the time he completes his three-year contract in Taiwan, he will have paid about $60,000 Taiwan dollar only in service charges.

Back in the Philippines, a second broker had charged him a one-time placement fee of 85,000 Philippine pesos, or $1,946. To cover the charge, De La Rosa took loan from a local bank and is now repaying the loan while interest accumulates.

If his Taiwan contract is terminated prematurely, he will return home to the Philippines in debt – a prospect that would likely deter him from seeking recourse from abuse.

Trouble at Home?

Brokerage fees are at the heart of complaints from countries that Taiwan depends on for inexpensive labour.

Recently, Agusdin Sabiantoro, an official of Agency for the Placement and Protection of Indonesian Workers, called the brokerage charges exorbitant and exploitative. Indonesia would pull back its labourers from Taiwan starting in 2017.

But South East Asia Group, a brokerage firm based in Taipei, defended Taiwan's service charges as fair.

The real exploitation occurs in the migrant worker's home country when local brokers collect excessive placement fees, said Chih Ting-cheng, chief of the group's marketing division.

"We can't control the ecosystem in the home country. Brokers there sometimes charge workers far beyond what is lawful," Chih said.

Sometimes there is a local recruiter who gets workers in his hometown to sign up with a local broker, and he gets a big commission for that, he added.

South East Asia Group partners with foreign brokers to bring in labour, Chih said, adding that it does not receive a cut from the placement fee that foreign brokers charge.

"I can't guarantee how other (Taiwanese) brokers work with overseas partners, but the situation with us is that we collect our own charges and they collect theirs."

Trouble in Taiwan

Taiwan's Ministry of Labour has banned the country's brokers from charging a placement fee, but allows them to charge a service fee of up to 1,800 Taiwan dollar per month in a contract's first year, 1,700 Taiwan dollar in the second and 1,500 Taiwan dollar in the third.

Each migrant worker at South East Asia Group is charged the maximum amount allowable and pays 60,000 Taiwan dollar over three years, while the employer pays an additional 6,000 Taiwan dollar.

The payments go toward necessary services like interviewing workers about working conditions, running a 24-hour translation service and providing timely lectures on health issues, Chih said.

But Betty Chen, a member of the Taiwan International Workers' Association (TIWA), said many Taiwanese brokers tend to under-deliver services in order to maximize profits.

"Based on my understanding, their services are often perfunctory," Chen said.

"For example, brokers do need to interview workers about working conditions. They may be required to go every month, but they don't. Instead, every half year, they suddenly appear with six forms for workers to sign in a hurry."

Moreover, many of these "services" are ought to be provided by the employer and, therefore, the employers should shoulder the expenses. However, it is difficult to shift the brokers and the employers from the status quo into a more ethical model, Chen said.

For De La Rosa, the cost of coming to Taiwan seems high, though, for now, he is upbeat about his prospects. He said he was certain that he could make the system work for him.

"Next month or the month after that, I will save my money for me. My plan is big, very big. It's high living."

*US$1 = 30.41 Taiwan dollar

*Copyright: The China Post/Asia News Network