Survey uncovers exorbitant agent fees suffered by Bangladeshi workers

Posted by on August 29, 2013 in Articles, Facts, research, analysis

singdollar10k

By YC Loh

For Bangladeshis in their first job here, about  half paid more than S$7,000 to their agent. More than 70 percent paid over $5,000. By contrast, the majority (over 60%) of Indians paid less than $5,000 to their agent for their first job. These figures emerged from a survey recently conducted by TWC2.

The average for the 104 Bangladeshi workers in the first job is about $6,500. For Indians, their average is $4,500.

agentfee_n_salary_survey_2013july_dataThe simple survey (only three questions) of 301 workers aimed  to understand a bit more regarding workers’ remuneration. We asked them whether this was their first job here, what they paid to their agent for this job and how much they earned in the previous working month.

The dataset behind the bar graphs below can be seen by clicking the thumbnail at left.

A foreign worker is an everyday sight in Singapore. We can surmise that he is motivated to work here because he believes he can earn more here than back home. But just how much do most of these transient workers make, and are there any wage differentials between them? How much did he have to pay for a chance to work here?

The first striking observation is that workers of Indian nationality are in a better position relative to Bangladeshis — firstly because agent fees for Indians are much lower than for Bangladeshis in both the first job and subsequent jobs.

agentfee_n_salary_survey_2013july_1a

Things look slightly better for Bangladeshis in their second or subsequent jobs.  They paid an average of $3,900 to their agents. However, the Indians paid an average of $2,900 for their second and subsequent jobs, as indicated by the graph below:

agentfee_n_salary_survey_2013july_1b

Salary-wise, Indians were also more likely to be better paid than Bangladeshis in both their first and subsequent jobs, as the next two graphs show.

agentfee_n_salary_survey_2013july_2a

Why is this so? Some possibilities — which our survey did not delve into — include:

  • Indians are employed in a slightly different mix of occupations  e.g. cook vs construction worker
  • lower supply of Indians vs Bangladeshi for certain jobs,

In a separate set of interviews on a different day, workers were also asked why they chose to come to Singapore at all, considering that they faced huge fees and harsh conditions for a meagre salary. Meagre not only in terms of what is needed to live on in Singapore, but also in terms of how many months they’d need to work to earn back what they’ve paid in agent fees.

Interviews with workers on this issue yielded strikingly similar responses — the lack of jobs in their homeland had forced them to seek overseas employment. There is “nowhere (to) get money in Bangladesh”, laments Mohamed Evan, 24, who works in Singapore to “feed (his) family”. Many of the men, like Evan, are desperate for employment. The S$6,000 in agent fees for his first job was scraped together by loans from his relatives and the bank. Subsequently, his wages for the next two years were spent on repaying these loans.

Evan had believed that despite the considerable expenses, the money he could remit after two years would still be sufficient when converted from Singapore dollars into Bangladeshi Taka. But working in Singapore was more problematic than he had anticipated. Wages might be paid incompletely, sometimes not at all, or employers might deduct fees for expenses like food, lodging and medical checkups. Ultimately what money he remitted, even after conversion, was inadequate to meet his family’s needs, he said.

agentfee_n_salary_survey_2013july_2bOthers I spoke to are worse off; despite working for years, they remain in the red over their agent fees.

Fortunately for workers of both nationalities, things are much improved for their second or subsequent jobs. For one, agent fees are reduced drastically as evident from the above graphs.

The salaries of workers from both nationalities are also slighter better, especially for Bangladeshis.

A variety of factors influence this.

Checks with several workers revealed that

  • companies are more willing to hire experienced workers;
  • workers themselves might previously have taken courses to upgrade their skills, and thus their employability;
  • workers are also more knowledgeable about selecting agents (in contrast to their first job where they might pick the first agent they come across).

Finding a reliable agent is of major importance for workers. The difficult process of working in a foreign country is made more complicated by untrustworthy agents who distort facts to prospective transient workers. A job’s salary might be lower than stated, or the job might be different from what the worker had agreed to. For Mohamed Hakim, 29, this is a source of great distress. He has to sign papers every day which state that he has performed certain construction tasks for his employer, while in reality his work involves something else entirely. He is threatened with deportation if he refuses to sign these documents. Such exploitation is extremely harmful to Hakim — he will be unable to claim compensation for any injuries resulting from the work he actually does.

Evan (left) and Hakim

Evan (left) and Hakim

Sometimes, a job from an agent might not exist at all, causing a worker to pay an exorbitant fee for no purpose. “They ali baba talking (they are lying)”, says Hakim, bitterly. “They talk one, bring another one (They don’t mean what they say)”. He is here on his third job, but knows of friends who have been cheated by agents. “Before come [the agent says there is] so much job, but come already no job”. Hence, the choice of agents can make or break a worker.

When asked whether they would like more official regulation related to securing a job in Singapore, the workers were supportive. They cited direct contact with potential employers as a plus point by removing the need for an agent as a middleman. As Evan explained, it is hard to find a good agent — even recommendations from others are not always credible as agents have been known to pay for referrals. Additionally, commissions would contribute to higher costs.

The results of this survey can hopefully be built upon or lead to further inquiry with greater depth. For example, we might want to ask: Is there wage discrimination among nationalities and how do we address it? Another angle: How can we facilitate more direct hiring between employers and workers so as to reduce the frictional costs and hazards of misrepresentation created by agents?

 

TWC2 is an organization that is dedicated to assisting low-wage migrant workers when they are in difficulty. We are motivated by a sense of fairness and humanity, though our caseload often exceeds our
means.

Make a difference

help with your donation become a volunteer