No, Switzerland will not be enacting the world’s highest minimum wage
posted at 6:01 pm on May 19, 2014 by Erika Johnsen
Switzerland has consistently resisted some of the more blatantly progressive-populist-socialist impulses that have gripped many of their continental neighbors — joining the 28-members of the European Union and their unified currency system springs immediately to mind — and the Swiss once again just declined the growing trend to implement their own top-down minimum wage in a national referendum over the weekend.
Swiss voters resoundingly rejected on Sunday a proposed minimum wage that would have been the world’s highest, a move widely seen as reflecting an aversion to state intervention in the liberal economic policies that are the bedrock of Switzerland’s prosperity.
Trade unions had sought a minimum hourly wage of 22 Swiss francs, or $24.65, in what they said was an effort to ensure fair salaries for workers in the lowest-paid sectors, such as retailing and personal services. Switzerland has no national minimum wage.
The proposed rate — considerably higher than elsewhere in Europe and more than double the $10.10 President Obama has sought in the United States — found little support in a national referendum, with 76.3 percent opposed, according to initial results released by the government. …
“Switzerland, especially in popular votes, has never had a tradition of approving state intervention in the labor markets,” said Daniel Kubler, a professor of political science at the University of Zurich. “A majority of Swiss has always thought, and still seems to think, that liberal economic principles are the basis of their model of success.”
A lot of Switzerland’s industries already have individualized collective bargaining agreements with their respective workers, but Swiss Big Labor has been trying to argue that in a handful of job areas, wages haven’t kept up with high cost-of-living increases. Meanwhile, businesses have countered that the country’s relative labor freedom helps to maintain its economic dynamism, and that a national minimum wage would lead to job losses, especially among unskilled workers, while eroding competitiveness. Most Swiss voters evidently agreed, and clearly, Switzerland is doing something right compared to its neighbors:
The Swiss cabinet, known as the Federal Council, and both houses of Parliament urged voters to reject the measure, saying it didn’t take into account regional and sector differences that might merit different pay. They also said the minimum wage would make it more difficult for low- and unskilled job seekers to find work.
Business lobby Swissmem said state control of pay would be a “flawed experiment” with the potential to undermine collective wage agreements in place in most industry sectors. Opponents also said Switzerland’s employment system, which relies heavily on apprentice programs, would be undermined by the minimum wage. The youth unemployment rate in Switzerland is 3%, compared with 23.7% in the surrounding euro zone.