Constituting Co-Ethnic Exploitation: The Economic and Cultural Meanings of Cash-in-Hand Jobs for Ethnic Chinese Migrants in Australia

Abstract

This article asks two questions: for immigrants, how is an exploitative labor market constituted, and how do immigrant employees and employers understand exploitation involving co-ethnics? Taking ethnic Chinese immigrants (PRC-Chinese, Taiwanese, Hong Kongese) as an example, this article examines employer hiring strategies, employee economic rationales, cultural perceptions, and the work experiences of ethnic Chinese migrant workers who find work in the informal sector in Australia. This article argues that language barriers, relatively higher earnings than home countries, the flexibility of cash-in-hand jobs, and the low expectation that job-seekers have of co-ethnic employers increase the willingness of ethnic Chinese migrants to work in the cash economy. On the other hand, employers look for an ‘obedient’ employee and create the image of a ‘good boss’ to decrease the expression of hostile emotions from their employees. Considering how economic factors and mutual cultural perceptions are embedded and reflected in the informal labor market, this article concludes that co-ethnic exploitation is formulated and justified by both employers and employees in Australia.

Keywords

Australia cash-in-hand jobs co-ethnic exploitation culture ethnic Chinese

Introduction

In discussions of immigration and immigrant assimilation, the contemporary literature focuses on how shared language and common ethnic and cultural backgrounds help in job-search processes and lower the costs of immigration (Bankston, 2014; Gold, 2005; Haug, 2008). In Australia, there are many PRC-Chinese, Hong Kongese, and Taiwanese who are in the country for study or work.¹ Owing to their language (Mandarin) and similar cultural background (Chinese culture), PRC-Chinese, Taiwanese, and Hong Kongese immigrants in Australia might share a similar identity under the larger ‘pan-Chinese’ umbrella (Ong, 1999; Yeh, 2000). For example, in Australia, because it is difficult for temporary migrants to get a job in the formal economy, many students and Working Holiday Visa holders search for ‘cash-in-hand’ jobs provided by either PRC-Chinese, Taiwanese, or Hong Kongese employers through pan-Chinese websites such as backpackers.com ,² tigtag,³ or Sydney Today.⁴

In Australia, however, there seems to be a consensus that ethnic Chinese (Hua-Ren) bosses are exploitative and always offer salaries lower than the legal minimum. As ethnic Chinese say: ‘Hua-Ren bosses exploit Hua-Ren employees’. Indeed, feeling exploited is subjective, yet exploitation can be estimated by several indicators such as whether the exchange of labor is equal or involves coercion (Marx, 1961 [1894]). Taking ethnic Chinese migrants in the cash economy as an example, this article will address two different understandings of exploitation: objective economic conditions and subjective feeling.⁵ The former is a Marxist category that refers to unequal extraction of surplus value, i.e. when the price paid for labor power is below the value of commodities produced. Exploitation applies to wage labor in general, but this article highlights that in a capitalist society wage labor is enforced by the threat of starvation, so that migrant workers have no other choice than to accept jobs with wages below the Australian national minimum standard ($17.29 per hour).⁶ These jobs are generally paid in cash, lack any insurance or superannuation,⁷ and provide no holiday or overtime pay. On the other hand, exploitation as a subjective phenomenon is an affective response to substandard wages and conditions of employment. It is culturally embedded because the norms and values that influence how employers and employees view their relationship are culturally defined along many axes but especially according to how co-ethnics should treat one another.

This article takes cash-in-hand jobs rather than the formal economy as my research topic because it is a market that lacks labor regulations and can better reveal the economic rationale and cultural perceptions of both employers and employees. The article first discusses ethnic perceptions of cash-in-hand jobs and then discusses the idea of exploitation, and what roles it plays in ethnicity and immigration. In the findings and discussions section, economic considerations and cultural expectations will be analyzed for both employers and employees.

The article will show that the language barrier, relatively higher pay in Australia than in their home countries, the flexibility of cash-in-hand jobs, and the low expectations that job-seekers have of co-ethnic employers increase their willingness to accept cash-in-hand employment. In other words, employees consider taking cash-in-hand jobs as ‘voluntary actions’. At the same time, employers understand co-ethnic employees’ situations (need for work, lack of English proficiency, etc.) and know there will always be ethnic Chinese (whether students or backpackers) who will be willing to work for them. By creating the image of a ‘good boss’, employers can also significantly decrease worker expressions of hostility and, in some instances, can even make them tolerate low wages, long working hours, and other situations they know to be exploitative. This mutual understanding constitutes and justifies an exploitative cash economy labor market between ethnic Chinese employers and employees in Australia.

Theoretical Background

Ethnic Perceptions of Cash-in-Hand Jobs in Australia

Views of ethnicity and ethnic identities in the sociological literature can be broadly divided into two categories. On the one hand, scholars like Weber (1968 [1922]: 385, 389) focus on the essential characteristics of ethnicity and a set of subjective ‘beliefs’, collective understandings of a common ancestry and shared culture. On the other hand, another category of ethnicity derives from the work of social anthropologists such as Fredrik Barth (1969) and Thomas Hylland Eriksen (2010), who theorize that ethnic divisions are about maintaining boundaries irrespective of cultural differences. They emphasize the subjective side of ethnicity and propose that only through subjects can objective indicators such as language and culture have meaning.

Barth (1969) extends the idea of ethnic identity from a singular focus on cultural content to an exploration of ethnic boundaries, and highlights how boundaries are maintained between ethnic groups even when their cultures are similar. Barth (1994: 30) recognizes, however, that culture is in flux, is contradictory and incoherent. Cultural items may vary with time and place, and boundaries may contain fluctuating cultural contents such as history, language, and economic practices. These features cause Barth to focus more on subjective aspects of culture such as individual experiences and cognitions rather than on objective indicators.

The ‘perception’ and ‘cognition’ process is important because it provides us with another way of thinking and explaining intergroup relations and boundaries. Brubaker and his colleagues (2004) also highlight the importance of culture on people’s subjective side. They claim that we need to examine ethnic issues from a cognitive aspect. In the article ‘Ethnicity as Cognition’, they think the focus should not be limited only to social categorization or how to classify social actors but should also include ‘how actors see the social world and interpret social experiences’ (Brubaker et al., 2004: 77).

This article explores how ethnic Chinese employers and employees see their co-ethnics in the cash economy. When people make a decision about whether to take a cash-in-hand job, they consider many economic factors as well as ethnic and cultural issues. Their economic considerations are intertwined with the cultural perceptions of their co-ethnics (employers and employees). It is difficult to say whether the unregulated exploitation that immigrants experience in this market results from informality or the co-ethnic ties that predominate. Nevertheless, it is reasonable to say that cash-in-hand jobs allow more room for the cultural influence of ethnicity, especially in an immigration context.

The nature of the cash economy, however, depends upon place, time, and social context. The definitions of cash-in-hand jobs in one country may not be applied to other countries because national legislation and enforcement vary considerably from one country to another. On their website the Australia Taxation Office (undated) defines cash-in-hand jobs as those ‘paying wages by cash and not withholding any tax and superannuation’. Thus, for employees, there is no insurance or other compensation. For employers, by paying cash they can evade taxes in which income-producing activities are concealed and not represented through normal accounting conventions. Braithwaite et al. (2008: 63) also find that the cash-in-hand job is not only widespread and visible in Australia but surprisingly tolerated.

Australians do not necessarily associate cash-in-hand jobs with ‘illegal work’ such as drug trafficking or prostitution, and people who accept cash-in-hand jobs do not necessarily expect to have the same working conditions and salaries as similar legal jobs. In her report, Arbes (2012) differentiates people who travel to Australia for a cash-in-hand job and those who ‘fall into’ the cash economy. Her subjects have come to Australia from China, Thailand, India, Korea, and Malaysia ‘on student, holiday or tourist visas’ (p. 3). Her sample is made up of migrants with substantive visas (i.e. with the legal status to work). In this sense, the subjects Arbes writes about are different from (undocumented) migrants in other contexts who need to develop survival strategies in order not to be sent back home. This is why her subjects, who perform underground jobs, have few concerns about being caught because they believe ‘the worst thing that could happen is to be sent home’ (Arbes, 2012: 16). Similarly, employers perceive little risk of getting caught because there is minimal government enforcement of policy in this area. Thus, non-regulation enhances a strong culture of ‘off the books’ activity in Australia. Furthermore, its normality drives more individuals into the cash economy and encourages existing underground participants to work more extensively there (Carter, 1984).

Under the increasingly ubiquitous pressure of neoliberalism and de-regulation, Australian governments have little control over cash-in-hand labor. Scholars concur that Australia has shifted toward a neoliberal policy paradigm. Regardless if the Liberal or Labor Party is in power, neoliberalism is the reigning ideology, which comes along with social inequalities and uncertain lives, especially for immigrants (Cahill, 2007; Quiggin, 1999; Stratton, 2011). For example, in a report on visa policy change ( CRIEnglish.com , 2 July 2015), Williams (2015) says that the government has changed its immigration policy and extended more Working Holiday Visas to young Chinese. Even though Australia has institutions such as the Fair Work Ombudsman and relevant labor unions, such institutions seldom actively intervene in or launch an investigation of cash-in-hand jobs unless workers register a complaint. Without sound labor inspection mechanisms and sufficient information, many workers accept their plight or assume that the state will not enforce labor laws. As a result, cash-in-hand workers infrequently lodge complaints against employers (fieldnotes, 7 May 2015).

To understand the motivations and reasons why people provide or take cash-in-hand jobs, Arbes (2012: 17–28) distinguishes several sub-categories of employers and employees who participate in that labor market. For example, she distinguishes between groups of heroes, everymen, and victims.⁸ Basically, the benefits of providing/accepting cash-in-hand jobs (more money in the pocket) are weighed against the probabilities of being caught and punished.

Arbes, however, does not consider that while migrant workers often expect to find legal jobs before coming to Australia, they frequently find they have no other choices than to accept cash-in-hand jobs. If a labor market limits the opportunities for immigrants to find jobs or if they have extra time, immigrants may be encouraged to take cash-in-hand jobs to earn extra money. Another reason for taking cash-in-hand jobs is that with little confidence in their English language abilities, ethnic Chinese migrants feel more comfortable working in a Chinese restaurant, for instance, and getting paid in cash.⁹ The narratives of my respondents demonstrate that most did not feel their English was good enough to qualify them for better jobs. In this regard, ethnic Chinese migrant workers do not have options but have to join the cash-in-hand labor market and can anticipate being exploited because they already know that available jobs entail substandard conditions (including salary and working hours).

Furthermore, neither Arbes nor others write much about the subjective feelings of people who undertake cash-in-hand jobs and how they understand exploitation. This article finds that the threshold conditions for joining the cash economy that ethnic Chinese migrants face take into consideration economic conditions and cultural perceptions. In general, ethnic Chinese migrant workers do not see the cash-in-hand job as an illegal activity, but still they acknowledge it is a lower paid job and admit that they are exploited. Because of the cultural understandings of their co-ethnic employers, they are willing to take a cash-in-hand job. Additionally, they temper hostile feelings toward their employers. At the same time, ethnic Chinese employers understand co-ethnic employees’ situations (need for work, lack of English proficiency, etc.) and assume that these employees will be hard-working and accept low-wage jobs. These mutual understandings constitute an exploitative situation, but employees find them tolerable in Australia.

Exploitation and Co-Ethnic Exploitation

Literature on exploitation starts with Marx (1961 [1894]). Marx distinguishes between necessary labor and surplus labor: the former is needed for worker’s own subsistence, whereas the latter is labor expended above socially necessary labor and generates surplus value. In Marx’s analysis, exploitation is the extraction of surplus labor, and those who own the means of production can extract surplus value from the working class. In other words, exploitation always involves an ‘unequal’ exchange of labor and is usually understood to require coercion.

Although exploitation can occur in all modes of production, what is unique about capitalism is that the capitalist mode of production is ‘masked’ (Boltanski and Chiapello, 2005; Burawoy, 1979; Shaikh, 1997). In a capitalist society, labor is paid for and regulated according to a contract negotiated between two seemingly equal and voluntary parties. If we look behind the seemingly equal relationship, however, we find ‘a world of hierarchy and inequality, of orders and obedience, of bosses and subordinates’ (Shaikh, 1997: 70).

This article argues that exploitation may not always involve unequal exchange and coercion as Marx (1961 [1894]) suggests, nor does it necessarily imply a false consciousness that exploitation brings (or is disguised as) mutual benefit (Eyerman, 1981; Roemer, 1982). Coercion, in this article, is closer to Wertheimer’s (1987) idea that options are illegitimately narrowed. In his book Exploitation, Wertheimer (1996) maintains that exploitation happens when one person pays a non-standard market price in a transaction. In the cash economy, employers are engaged in obviously illegal exploitation since they pay their employees lower than the legal standard.

The literature of industrial relations deals with interactions among employers, workers, and the state (Dunlop, 1993; Jessop, 2002; Roemer, 1982), but such literature seldom examines exploitation between employers and employees along ethnic lines, especially how people subjectively view it through an ethnic lens. Ethnicity matters here because by examining how ethnic stereotypes are perpetuated, we can better understand how exploitative treatment of co-ethnics is justified and even taken for granted. On the other hand, we can also see how some employers try to create the image of a good employer and how it is sustained and accepted by employees.

Scholars have discussed the effects of ethnic networks and the ethnic enclave economy that lead to the exploitation of co-ethnic employees (Bonacich, 1973; Cranford, 2005; Den Butter et al., 2007; Di Falco and Bulte, 2011; Kwong, 1987; Sanders and Nee, 1987; Zhou, 1992). For example, ethnic Chinese networks may not reduce the cost of finding jobs in Australia. Instead, they become a tool by which employers can hire workers who they presume will work hard and accept lower salaries. Most of these studies start from an economic perspective, arguing that to minimize labor costs employers use ethnic networks to ‘exploit’ their co-ethnics. Few studies, however, have systematically examined whether and to what extent cultural factors influence co-ethnic exploitation in the cash-in-hand labor market. For example, how do they subjectively understand the exploitation from their co-ethnics? What constitutes a situation that makes a worker more exploitable? Here, cultural factors make themselves felt. Economic logic does not fully explain why people tolerate the exploitation. By exploring people’s subjective feelings when they provide or take cash-in-hand jobs, we can better understand the cultural basis of co-ethnic exploitation.

Ethnic Chinese migrants present a case that confirms Goodin’s (1985: 37) argument that exploitation is ‘a kind of abuse or taking advantage of the vulnerability of others’. Because ethnic Chinese migrants have few choices but to rely on co-ethnic networks – co-ethnic employment agencies or online job search websites, for example – they need to know about the job content, salaries, and, most importantly, the cultural characteristics of their co-ethnics (whether employers or employees). Exploitation is expected and understood from their cultural sense of each other. As I will show, ethnic Chinese employers hire co-ethnic workers with the specific understanding that they may be more willing to take cash-in-hand jobs than other ethnic groups.

In sum, this article touches upon these themes by focusing on the trajectories and experiences of how people undertake cash-in-hand jobs. The article will focus on the rational considerations of both employers and employees as well as their cultural expectations of one another to illustrate how cash-in-hand jobs become ‘normal’ as well as how ethnic Chinese migrants consent to exploitative arrangements.

Method and Data

Because of a lack of statistical data on much of immigrants’ working experiences and their subjective feelings, the data for this article were collected through qualitative fieldwork, which I carried out in Sydney, Australia. The fieldwork involved participant observations and in-depth interviews that investigated migrant job-search and work experiences. Australia is a country where ethnic Chinese immigrants work in a variety of industries and have established various communities.

Inspired by Burawoy (1979) and Ribas (2012), who conduct participant observation in the workplace, starting in August 2014 I worked in two places, a pan-Chinese restaurant and a pan-Chinese supermarket, as a waiter and as a storeman, respectively. I chose these two places as my main field sites because they each had a large number of PRC-Chinese, Taiwanese, and Hong Kongese employers and employees. As well, they were workplaces in which the predominant language was Mandarin. I could thus explore whether ability to speak English proved a limit on employees’ chances of finding a job.

In addition, I sought other opportunities to understand ethnic Chinese job-search processes and working experiences. I have been a member of the Taiwanese Working Holiday Youth, T-WHY, and am responsible for translating policies and legal regulations regarding fair work. I also help Taiwanese backpackers cope with unfair treatment in the workplace and assist them in contacting relevant authorities such as the Fair Work Ombudsman and unions. Starting in February 2015, I had casual jobs unloading containers and house-cleaning, and had a chance to socialize after work with other ethnic Chinese migrants, both employers and employees. A prolonged and deep immersion through participant observation in different activities made it possible to examine how employers and employees think about cash-in-hand jobs, how they perceive one another, and how they constitute a labor market based on co-ethnic exploitation.

I conducted semi-structured interviews with 27 ethnic Chinese respondents. In this article, I have used pseudonyms to maintain respondent confidentiality and anonymity. My interviewees included students and backpackers who were staying in Australia temporarily (mostly employees) and permanent residents and Australian citizens (mostly employers). The main focus of the interviews with employees was on their migration and job-search trajectories, working conditions, and their thoughts and perceptions on working in the cash economy. In contrast, I asked ethnic Chinese employers about their strategies for and opinions of hiring co-ethnics for cash-in-hand jobs.

In sum, this article sought three types of information during the interviews. First, I asked my respondents about their experiences looking for jobs after migrating to Australia; second, I examined their opinions of their ethnic Chinese employers/employees; third, I asked what working in the cash economy and exploitation meant to them and what motivated them to work there.

Findings and Discussions

Economic Logic: A Despotic Labor Market

Employees

For ethnic Chinese migrants who are working in a cash economy, there are several economic considerations. Their first concern, undoubtedly, is the language barrier. It is not surprising that English proficiency directly determines whether migrants can get a proper job or not. When I asked my interviewees to self-evaluate their English proficiency, only a few said they were confident of their English. Most employee interviewees expressed that they would like to find a legal job and work for Australian employers. Some of them also tried to apply for legal jobs but were unsuccessful. Due to their limited English proficiency and the urgent need for a job, however, they had to compromise. In some pan-Chinese job-search websites such as backpackers.com , job advertisements will indicate whether positions are ‘black market jobs’ (cash-in-hand jobs) or ‘white jobs’ (legal jobs with insurance and superannuation). Even though migrant workers know that they should ‘never look for jobs offered by Hua-Ren! They only give you shitty pay’ (fieldnotes, 1 September 2014), nevertheless, there are still many PRC-Chinese, Taiwanese, and Hong Kongese who use these pan-Chinese networks to find jobs because ‘it’s hard to find a proper job unless your English is like a native speaker’s’ (interview with James, Sydney, 4 December 2014). Another 24-year-old Taiwanese backpacker, Lily, shared her experience:

My English is very poor. It certainly limits my chances of finding a proper job. When I first arrived in Australia, I tried to find a job with legal pay. Then, after one week, two weeks passed, I realized I had to give up this goal and take those shitty jobs offered by ethnic Chinese employers. What else can I do? Return to Taiwan? Or keep spending money? I can’t just wait!

Second, compared to China, Taiwan, or Hong Kong, people can earn more in Australia. The relatively high wage compensates for the risks of holding a cash-in-hand job. Peggy, a 28-year-old Taiwanese backpacker, said: ‘I have compared all the living costs and wages I can earn here with the ones in Taiwan. In Sydney, even if you find a cash-in-hand job that pays you only $10 per hour, you can still save more money than in Taiwan’. Another Hong Kongese backpacker, Cecilia, also said: ‘If you work harder, if you do two or three jobs, you still can earn and save lots of money’. The idea of ‘still earning/saving more’ makes a cash-in-hand job not that difficult to accept.

Finally, for temporary migrants like students and backpackers, cash-in-hand jobs provide them with flexibility. They need not worry about paying taxes,¹⁰ and unburdened by legal regulations they can work many jobs. Furthermore, if they do not like a job, they can always leave.

For temporary migrants such as Chinese students and Taiwanese/Hong Kongese backpackers, given the limited time they stay in Australia, flexibility is particularly important. Here flexibility involves evading taxes, having control over time, and earning extra money. For example, my respondents can be broadly divided into two groups: the first group is PRC-Chinese students who come to Australia on student visas and who may take cash-in-hands jobs to earn extra money because the visas allow them to work only 20 hours per week. They have extra time after school and if they want to work longer and earn more money, they generally do not care much about their salaries. In contrast, Taiwanese and Hong Kongese backpackers on Working Holiday Visas work for fun,¹¹ to gain life experiences, and to support their day-to-day living costs. In this regard, people do not make ethical judgments about the proper pay and national minimum wage. These motivations and needs, to a certain extent, fit the flexibility of cash-in-hand jobs well and thus increase the willingness to accept a cash-in-hand job. According to one Chinese student, Adam:

If you want to get a legal job and work for Australian bosses, generally you will have to prepare your resume, and then go through interview processes, and then you may have to wait for another couple of weeks for results. However, working for ethnic Chinese (Hua-Ren) bosses is more flexible. You just go to their workplaces, restaurants, or supermarkets … wherever, if they are hiring people, they will ask you to work tomorrow or even immediately! That’s why now I can take three jobs on the same day when I don’t need to go to school. I am a cashier in the daytime, in the late evening I do house-cleaning, during weekends I help people move their households.

Adam’s answer shows that the flexibility of a cash-in-hand job contributes to an individual’s economic freedom in the labor market because he feels the decision to join the market is voluntary. It may be too facile, however, to jump to the conclusion that ethnic Chinese job-seekers are thus ‘willing to be exploited’ by their co-ethnics and think the wage paid is ‘fair’. It needs to be noted here that when ethnic Chinese employees accept cash-in-hand jobs they are not participating in what Burawoy (1979) describes as ‘manufacturing consent’. Burawoy (1979) mentions that management uses various strategies such as the piece-rate payment system, internal labor market, and collective bargaining between unions and management to create ‘voluntary servitude’ among workers. Such strategies help employers extract and ‘hide’ the surplus value created by workers. Ethnic Chinese migrant workers, however, already know (or can anticipate) the hourly rate before choosing to accept a job and its substandard conditions. The employers do not play tricks on employees nor create strategies to hide the surplus value. Instead, it is the characteristics of cash-in-hand jobs that make them attractive and the voluntary servitude of employees possible. Employees are aware the job is not as good as other legal jobs, though. They take those jobs partly because they lack language proficiency, partly because they pay better than in their home countries, and partly because of the flexibility of the jobs. Ethnic Chinese attribute working in the cash economy to their own decisions and do not feel strongly that they are being exploited.

Employers

The visa statuses of employees and relevant regulations not only determine the meaning of work to immigrants and the reasons to find an informal job, they also influence how employers select their employees. Even when jobs are paid in cash and without insurance, demand for them remains high.

Knowing the situations of ethnic Chinese students and backpackers, ethnic Chinese employers do not worry about finding people for work. For example, employers can take advantage of two aspects of their co-ethnic employees’ language barrier: Employers understand ethnic Chinese migrant workers cannot find other legal jobs because of a lack of English proficiency but are in need of jobs to cover their everyday expenditures including rent and meals. Hong Kongese employer Henry expressed this point directly: ‘Apparently, most ethnic Chinese job-seekers are not competitive. I mean, their English is not good, it’s thus impossible for them to find a job with a good rate’. Additionally, they are confident that they can offer jobs paying wages below the legal minimum because they believe a lack of English proficiency decreases their employees’ likelihood of resorting to authorities such as the Fair Work Ombudsman or labor unions.

In the cash economy in Australia, there are no regulations. Employers can keep wages low because there are always students and backpackers available to do the job whenever employers need them. They thus never worry about the supply of labor. A PRC-Chinese employer, Charlie, who is a boss of a delivery company, said this when interviewed:

Charlie:

I just go to those online job-finding websites, tigtag or Sydney Today, post the ad, mentioning the work starts from 8:30 am, to 8 … or 9 pm. I pay $130 per day, that’s it! If you work quickly, then you can get off work earlier. It’s all based on your ability.

Interviewer:

So aren’t you afraid of it becoming difficult to hire people …with this rate?

Charlie:

No! I never worry about that! (smile)

In addition, due to various economic considerations, temporary migrants find it easy to take cash-in-hand jobs, which then shapes the competition within the cash economy. In other words, people still have to compete for cash-in-hand jobs, even though they are lower paid and without insurance and superannuation. A Hong Kongese backpacker, Peter, shared his experience:

I saw a job ad on Sydney Today, unloading containers, $15 an hour. You know what? I called just two hours after the ad was posted, and the boss said they already found workers! Crazy! You have to be lucky and apply as soon as possible.

The phenomenon that employees have to compete for cash-in-hand jobs and a constant supply from a pool of temporary migrants constitutes a market rule that employers use to justify the wage they offer. Being asked if he knows the national minimum wage here in Australia is $17.29 per hour, Henry started to get a bit angry:

Yeah I know, so what? Don’t always tell me the law says this, says that. It’s a cash economy! The point is the market rules! Today the wage becomes $8 or $10 for its own reasons. I pay $8 per hour, and I can still find employees. What does this mean? This means there is no problem with this rate in this labor market! If you feel it’s wrong, fine, don’t take the job. Let me ask you a question: if today you were the boss, would you pay $17.29 per hour?

For employers like Henry, the low wage is seen as a result of a ‘consensus’ they share with their co-ethnic employees in the illegal cash-in-hand labor market. Because there are always students or backpackers ready to work (and even compete over a job) whenever employers need them, they justify the low wage as normal and the result of a voluntary exchange between employer and employee. In other words, they do not see their illegal treatment as co-ethnic exploitation.

Cultural Perceptions of Cash-in-Hand Jobs

Employees

It became clear from my interviews that ethnic Chinese employees do not have high expectations of their co-ethnic employers, even before coming to Australia. Within the cash-in-hand labor market in Australia, there seem to be established prices: waiter or cashier jobs generally get paid $8 to $10 per hour; other physical labor such as unloading containers, house-cleaning, or moving furniture is paid at around $15 per hour. The market rule, for job-seekers, has created a consensus that such wage levels are normal, although unfair. A 24-year-old Taiwanese backpacker, Lawrence, commented:

Hua-Ren bosses seldom pay over $15 per hour. If they do, then you have to be mentally prepared. They will ask you to do lots of work. These bosses know Chinese students and Taiwanese backpackers are eager to find a job, even though they pay $8, $9 per hour, they can still easily find people to do the job.

Associating lower pay, no insurance, and no overtime/holiday pay with jobs offered by ethnic Chinese employers, these employees do not have high expectations of co-ethnics. As opposed to ethnic network scholars, who tend to think co-ethnics in host countries reduce risks of immigration, my employee interviewees seldom think co-ethnic employers are good employers. But surprisingly, they do not get angry when I ask their opinions of co-ethnics who offer lower-paid jobs. According to a Chinese student, Sally:

In Australia, the Hua-Ren bosses are all the same. The chance of finding a good Hua-Ren boss is very low. When you realize all other Hua-Ren bosses are the same, you gradually get used to it and don’t have high expectation of them.

Sally’s response represents a typical cultural perception of ethnic Chinese bosses within the illegal labor market in Australia. When people find a job offered by co-ethnic bosses, they hardly expect them to be proper jobs. As a result, feelings of exploitation decrease. Workers already understand what the job content will be and expect a low salary. This cultural perception of co-ethnic Chinese employers reflects employee understandings of how the market works and the cultural characteristics of ethnic Chinese bosses. Workers attribute their exploitation, however, to a cultural characteristic (ethnic Chinese bosses are exploitative) and somehow temper hostile emotions toward co-ethnic employers because these exploitative conditions are ‘not surprising’. For example, according to a supermarket colleague, Abby, whose wage was $10 per hour: ‘Of course I admit my wage is relatively low, and sometimes I feel it’s unfair, but then, I also think, if today I were the boss, I might pay a similar rate … maybe $11 or at most $12 per hour’ (fieldnotes, 12 November 2014).

Thus, the ‘ethnic Chinese employer’ has become a concept rooted in the job-seeker’s mind. He characteristically does not offer legal jobs. When employees take cash-in-hand jobs offered by ethnic Chinese employers, they feel it is they who need to be responsible for the outcomes, whether good or bad. Commenting that ethnic Chinese migrants always find jobs working for co-ethnic employers, a 29-year old Hong Kongese backpacker, Kathy, who now works legally in a restaurant, said:

If today you come to Australia, but you still find those shitty jobs offered by Hua-Ren bosses, sorry, I can only say that you deserve it! There’s no empathy for you. You can’t complain about being exploited. I feel we … those who take cash-in-hand jobs, should also be responsible for it. You should have known that these Hua-Ren bosses are always stingy and demanding!

The consensus that ‘Hua-Ren bosses are exploitative’ creates a cultural stereotype that distinguishes ethnic Chinese bosses from other ethnic groups, even though exploitation may also happen among other ethnic groups. As some scholars suggest (Craciun, 2013; Lamont, 2000; Waters, 1990), people tend to ascribe cultural meanings and values to specific ethnicities. Ethnic Chinese migrants do not think co-ethnic employers will provide them with proper jobs. This ethnic element accompanies a passivity that does not expect legal wages or proper working conditions from co-ethnic employers because they attribute the exploitation of Hua-Ren bosses to a deeply-rooted cultural phenomenon that is almost impossible to eradicate. Because of their cultural understanding of co-ethnic employers, the willingness to take a cash-in-hand job is increased. The relevant conditions (lower wage, no insurance, no superannuation, and no overtime/holiday pay) are thus not surprising nor that hard to accept. As a result, the sense of being exploited is softened.

Employers

One cultural expectation of the cash economy is that ethnic Chinese employers believe those who take cash-in-hand job are more ‘obedient’. The rationale behind this is simple: job content and wage rates are either posted on job-search websites or become a ‘consensus’ among ethnic Chinese. If employees want legal pay or equivalent compensation, they will not accept the job or be hired.

The perception that ‘ethnic Chinese employees are obedient’ also comes from the employer stereotype of the ethnic Chinese work ethic and values (Harrell, 1985; Jaw et al., 2007). As Waldinger and Lichter (2003) point out, employers already have ‘a cognitive map that associates ethnic and national traits with the qualities that make for subordination’ (p. 40). Thus, employers do not need to develop control strategies in the workplace to limit employee resistance. When such stereotypes combine with the understanding that co-ethnic employees either have been unable to find a proper job or that they speak English poorly, employers can thus take advantage of their employees and strengthen their belief that they do not need to pay higher salaries or required benefits to recruit employees.¹²

Henry:

Well, I wouldn’t bother to hire a local Australian worker since I know if I do that, I have to pay them more, and they may complain if I don’t give them insurance or pay into their superannuation. I’d rather hire ethnic Chinese employees because, on the one hand, it’s easier to communicate; on the other hand, they are more obedient.

Interviewer:

What do you mean by ‘obedient’?

Henry:

They take whatever job I ask them to do, never complain about the hourly rate and other tax, insurance compensation.

Another PRC-Chinese employer, George, shared tips about how to pay his employees low wages and make them feel appreciated. Creating intrinsic rewards, such as providing sponsorship or job advancement, reduces the need for extrinsic rewards (wages and other benefits) (Herzberg, 1966).

It’s always easy to find Chinese people to work for you. If you treat them well, pay them on time, and if you can even provide them with job sponsorship,¹³ trust me, they would never report the low wage issue to the authorities.

From George’s interview we can see that some employers still try to create the image of a good employer. One reason is that employers care whether they can retain their ‘obedient workers’. The image created here is not economic-oriented or about paying higher salaries. Instead, it is about the way the employers treat their employees. In some cases, such an image does significantly decrease the expression of hostile emotions by employees towards their employer, and sometimes can even make employees tolerate situations they know to be exploitative, such as low wages and long working hours. My respondent Lily said she was worried that her stories would be brought to the attention of the authorities because she thought her boss was ‘a nice person’ and treated her well. She did not want to ‘get him in trouble with the authorities’. Other respondents echoed this sentiment, saying that in most cases, rather than falling out with their boss, they would prefer just to find another job. In a sense, such reactions also prove and strengthen employer perceptions that their co-ethnic employees are obedient.

Conclusion

This article examines how an exploitative cash-in-hand labor market is constructed in Australia and how ethnic Chinese migrants understand co-ethnic exploitation. In contrast to Arbes’ (2012) description of people who are working cash-in-hand jobs either ‘intentionally’ or because they have ‘fallen into’ the cash-in-hand labor market, this article examines what exploitation means to employers and employees. Additionally, it uncovers the economic considerations and cultural reasons why people provide or take cash-in-hand jobs in Australia.

It may not be too surprising that to maximize profits and minimize tax payments, employees are willing to take a cash-in-hand job to get extra money; employers also always want to hire low-paid workers. It may be too facile, however, to conclude that the informal labor market is based on a consensus between or the mutual economic freedom of employers and employees.

The aim of this article is to highlight how and why people provide or take cash-in-hand jobs and how employers and employees understand exploitation within the process. This article argues that co-ethnic exploitation is formulated and justified by both employees’ and employers’ economic considerations and mutual cultural expectations. The article illustrates that ethnic Chinese employees are willing to perform cash-in-hand jobs because they lack English proficiency, earn relatively higher pay than in their home countries, experience flexibility, and have low cultural expectations of co-ethnic employers. These economic and cultural factors increase their willingness to enter into the cash economy and temper subjective feelings of being exploited.

For employers, providing cash-in-hand jobs minimizes human resource costs, including insurance, taxes, and superannuation contributions. But at the same time, my interviews reveal that ethnic Chinese employers perceive potential employees through a cultural lens. That is, they understand the vulnerabilities of co-ethnic employees and assume they will be ‘obedient’ once they accept a job. On the other hand, even though they pay less, employers try to create the image of a good boss to decrease expressions of employee hostility.

As previously mentioned, under neoliberal forms of capitalism, the Australian government has issued more Working Holiday Visas to ethnic Chinese youth. Taking a hands-off approach to the economy, the state neither intervenes in the operations of the cash economy nor does it launch investigations until migrant workers register complaints. Lacking information, job-seekers may find they are increasingly vulnerable to the harshest aspects of the cash economy. Taking ethnic Chinese as an example, this article shows that both employers and employees foresee the risks and potential exploitation of cash-in-hand jobs. When illegal exploitation is interwoven with the vulnerability of job-seekers, employers and employees develop different interpretations to rationalize and justify Australia’s exploitative cash-in-hand labor market. As a result, exploitation is recognized but tolerated.

Footnotes

Acknowledgements

I would like to thank Professor David FitzGerald, Christena Turner, Jeff Haydu, Hilary Yerbury, and Katherine Whitworth for multiple readings of this paper. I also thank the editor and anonymous reviewers for their valuable comments and suggestions. Any shortcomings that remain are my sole responsibility.

Funding

This work was supported by the Australian Government Endeavour Research Fellowship.

Notes

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