Migrant Construction Workers Facing Pressure on Wages and Working Conditions

ILO/96/4

Press release | 06 March 1996

ILO/96/4

GENEVA (ILO News) - In spite of a continuing shortage of construction workers in parts of Asia and the Middle East, the growing number of migrants competing for jobs in those regions is pushing wages down and has led to a significant deterioration in working conditions, warns the International Labour Office in a new report Endnote1. Protective measures introduced by the Governments of labour-sending countries are in many cases ineffective, adds the report, and receiving countries often fail to give themselves the means to enforce their own labour laws, where migrants are concerned.

A meeting involving Government, employers and trade union representatives from over 30 countries** will be held at the ILO's Geneva Headquarters from 4 to 8 March to examine these and related issues and to discuss ways of promoting improved industrial relations and the application of international labour standards in the construction sector.

"Migrant workers have made an important contribution to the economies of the countries of immigration and, through their remittances, to their home countries. They too have generally benefited from the opportunity of working overseas", the report notes. "However, these positive factors are offset by two problems (...)". One is the rising "temptation to migrate illegally, with all the risk of exploitation that this involves. The other is that there has developed, even for legal migrants, a 'buyers' market' for labour, with attendant downward pressure on wages and conditions of work."

Middle East

Since the mid-1970's, the construction boom in the thinly-populated but oil-rich countries of the Middle-East has attracted hundreds of thousands of migrant workers from Asia. While activity has slowed down in recent years and some Governments in the region, facing rising unemployment, have encouraged employers to recruit locally, overall numbers do not appear to have changed significantly.

"With the notable exception of Bahrain," says the report," it does not appear that local workers will replace foreign construction workers in the Gulf in the foreseeable future.(...) Job opportunities for manual workers from overseas will therefore probably expand, in line with construction activity, well into the twenty-first century."

What has changed considerably in the Middle East over the years is the national origin of migrant workers. In the mid-1970's, countries of South Asia dominated the flow. Ten years later the majority of foreign workers came from the Republic of Korea, the Philippines, Thailand and Indonesia. But rapid growth in South-East Asia soon led to rising wages in those countries, making their workers less competitive in Middle-East markets. Today, while there still are large numbers of Filipinos and Thais, most immigrants in the region come once again from South Asia (India, Pakistan and Bangladesh).

As the pool of countries competing on the Middle Eastern labour market has increased, the competition among them, and among ever-growing numbers of recruiting agents, has steadily driven wages down. Available data shows that, in Bahrain, wages for construction workers fell by as much as one third between 1986 and 1989.

Wages, it has also become apparent, vary considerably according to the migrant's country of origin. "Workers from different countries have (or are perceived to have) different characteristics", the report points out, and "wages generally tend to reflect the level of wages and standard of living in the home country".

A survey Endnote2 of wages paid by Korean construction firms in the Middle-East in 1992 revealed, for example, that "Malaysians earn the most at US$ 536 per month, followed by Filipinos and Thais. At the bottom of the scale are Sri Lankans, at US$ 37.6 per month. Very low wages are also paid to Nepalese and Indonesian workers."

East Asia

The fastest developing region of the world today is East Asia. High rates of growth, accompanied by a sharp drop in fertility, have created labour shortages in several countries and territories including Hong Kong, Singapore, the Republic of Korea and Taiwan. The more mature economy of Japan has also experienced labour shortages.

Wages in East Asia are much higher: "the average monthly salary of a Bangladeshi construction worker in Japan is seven times that of a similar worker in the Middle-East."

"However", says the report, "wages and benefits are generally well below those paid to local workers (...)" and "the failure of many countries to recognize their dependence on foreign workers has led to many working illegally" and falling victim to abuse.

In Japan, for example, "there are reports of safety standards being ignored for illegal workers, of wages lower than the legal minimum wage or of employers withholding wages altogether." And though "legislation exists for the protection of foreign workers, whether they are legal or not (...) in practice, however, abuses are seldom reported, which makes implementation of legislation difficult." "Health care", the report continues, "is another pressing issue. Many migrant workers could not afford health insurance even if they applied for it."

"A notable problem in Hong Kong", where immigrants from mainland China constitute a high proportion of the construction workforce, "is that its safety record is poor by international standards". The figure for reportable accidents is "twice that of the United States, and 25 times worse than in Japan and Singapore."

Among Chinese workers in the Republic of Korea covered by a survey in 1993, "20 per cent had been injured at work and 76 per cent paid their own medical costs."

Western Europe

In the years following the oil crisis of 1973, construction in Western Europe "was badly hit by the recession and contractors shed labour on a massive scale." As demand later picked up in many countries, much of that labour was not re-employed. "Instead", says the report, "the practice of subcontracting labour increased dramatically."

This trend can, in particular, be observed in Germany which boasts the largest volume of construction in Europe accounting, in 1993, "for some 26 per cent of total construction output of the countries of the European Union." Germany today is the major recipient of migrants from Eastern Europe and has become the destination of choice of increasing numbers of construction workers from the lower-wage countries of the E.U., including Ireland, Portugal and the United Kingdom.

In the early 1990's, the majority of new construction workers from Eastern Europe entered Germany as "project-bound contractees" working for foreign enterprises - most of them Polish - active as subcontractors on the German market. "The German construction trade union estimated the total number of East European workers actually present in 1992 to be 500,000, with 150,000 in Berlin alone", claiming that this had "caused, or at least promoted, the illegal employment of foreigners on building sites."

"The German Government has recently taken a number of measures designed to combat negative effects of the project-bound employment schemes", notes the report. "As a result (...) there has been a substantial reduction in the employment of migrant workers from the East European countries in construction. The practice of employing them illegally also seems to have been drastically reduced."

PROTECTION FOR MIGRANT WORKERS

"In many labour-receiving countries legislation exists which could offer some protection, although it may have been devised for more general purposes. However it is not always enforced through an effective system of labour inspection", says the report.

The extent to which labour inspection services "could be used as an instrument for protecting the rights of migrant construction workers, and the obstacles to be overcome to achieve that goal, is a subject that deserves greater attention."

But, as the report also points out, "legal action is not an option for migrants who are working illegally." No solution to their plight is possible as long as governments remain "reluctant to openly recognize the need for migrant workers, even when labour shortages are apparent."

"Legalizing the flow of migrant workers", argues the report, "could bring benefits to the host economy, and facilitate protecting the rights of the migrant workers themselves."

The ILO has for many years attempted to protect the rights of migrant workers through the adoption and enforcement of international labour standards and especially of Conventions No 97 (1949) and No 143 (1975) which relate specifically to migrants. The basic principle enshrined in both Conventions is that of equality of treatment between local and migrant workers. "In addition, Convention No 97 focuses on the provision of assistance, information and protection for migrant workers, while Convention No 143 is concerned with the elimination of 'abusive conditions' - i.e. clandestine migration and the perpetrators of 'manpower trafficking'."

The problem is that few countries, to date, have acceded to these Conventions, and among those that have, figure none of the major labour-receiving countries covered by the report, "with the single exception of Malaysia, which has ratified Convention No 97."

Endnote1

Social and labour issues concerning migrant workers in the construction industry, Tripartite Meeting on Social and Labour Issues Concerning Migrant Workers in the Construction Industry, International Labour Office, Geneva 1995.

Endnote2

Survey conducted by the Overseas Construction Association of the Republic of Korea, 1994