Swiss city goes off the deep end on minimum wage

Most of you are likely familiar with the city of Geneva, Switzerland. It’s famous for being the home of the United Nations and some of the world’s most lucrative (and secretive) banks, as well as the birthplace of the Geneva Convention. One other fact is that it’s among the most expensive places to live on the planet. As a result, it’s rather hard to get along there if you’re not part of the fabulously wealthy set. But now they’ve come up with a solution to that issue and it’s one that was probably predictable given Switzerland’s socialist leanings. They’re going to raise the minimum wage.

Big deal, right? I mean, we have people constantly pushing to raise the minimum wage here in the United States. But Geneva doesn’t do things in half measures. The new minimum wage there is going to work out to $53,000 per year. Seriously. If you go to a burger shop in Geneva and order some fries, the person making them will be earning more than the median family income in America. (NY Post)

One of the world’s richest cities is instituting a minimum wage which proponents say is only relatively sumptuous.

Geneva, which by most metrics ranks in the top five for the globe’s priciest places to live, has approved a minimum wage which would be considered lavish elsewhere but is intended to just get food on the table for its poorest workers.

The Swiss city voted in a two-thirds majority Sunday to introduce a minimum wage of 23 Swiss francs ($25) an hour for a 41-hour workweek, CNBC reported. That adds up to somewhere in the range of $4,100 a month, or $53,300 annually, making it the highest minimum wage ever.

The city attempted to pass other versions of this law twice, back in 2011 and 2014, but referendums to put the measure in place failed with the voters each time. But as with so many other things in the world these days, the arrival of the novel coronavirus has changed everything. More people were out of work as many businesses closed down and even their generous social safety net programs could not cope. A recent report indicates that thousands of people have been standing in line since before dawn to get free meals at food banks.

The new measure still had opponents, however. And they cited some fairly basic reasons that this isn’t a good idea. First of all, the employers who are still in business can’t simply absorb these massively increased labor costs. They’re going to have to raise prices on virtually everything. And much as we’ve seen in the restaurant industry here in the United States, many of them will also have to lay some people off or cut their hours to make up the difference.

Taking those facts into account, let’s see if we can’t figure out what the government of Geneva is about to do. In a city that’s already too expensive for working-class people to live in and with rising unemployment, they’re about to put even more people out of work while raising the cost of living for everyone even higher. The new minimum wage will no doubt be a boon to those who manage to hang onto their jobs, so that part is great. But for all of the people who were already out of work and all the newly furloughed workers about to join them, it’s going to cost even more money that they don’t have to simply survive in the city.

There was an alternative to this plan under consideration up until now. Geneva hosts approximately 200,000 “cross-border workers” who primarily commute back and forth from France. (The minimum wage in France is less than half of what it’s about to be in Geneva.) If they had closed the borders to such workers, more employment opportunities would have immediately appeared for the city’s residents. Then they could have probably afforded to leave the minimum wage where it was and control the prices.

So why didn’t they go that route? Because the cross-border workers have a union and they fought the border closure idea, claiming that it would have “jeopardized the free movement of nearly 200,000 people.” If that story sounds familiar, it’s because it shares a number of similarities with the Fight for Fifteen movement among labor unions in the United States. I guess some things really are universal, huh?