Swiss rejects the minimum wage

 4

First, the Swiss wanted a minimum income (http://www.fivestarsandamoon.com/what-minimum-wage-this-country-wants-minimum-income/) now the unions have asked for a referendum to pass what could have been the highest minimum wage in the world at 4,000 Swiss Francs (S$5600).

They certainly have a taste for the extreme.

An overwhelming majority of the Swiss have voted against the minimum wage (http://www.bbc.com/news/business-27459178) for fear that this move would endanger small and medium businesses, which would lead to further job losses.

Swiss laws says that any issue can be put to referendum as long as it attains 100k signatures to do so. The swiss vote at least four times a year and some criticise they may suffer from referendum overdose.

It is wise that they voted against the minimum wage. As it is, 90% of Swiss workers earn more than the proposed minimum. And anyway, no responsible citizen could vote for a minimum wage at that sort of price!

However the unions were adamant – angry that the country does not have a minimum pay level whilst neighbouring France and Germany does. Arguing that surviving on less than 4,000 SF a month is not possible because rents, health insurance and food are “prohibitively expensive”.

It begs one to ask: Are the unions doing this merely as a show of force, or are they really concerned about the state of the economy? The results show that the Swiss people won’t tolerate Government intervention in a free-market economy.

Said President of the Swiss Business Federation, Ecnomiesuisse, “We were able to show the initiative hurts low-paid workers in particular”. If barriers to entry become too high for a business, then the business would simply not exist – labour would be laid off leaving people worse-off.

The pro/against minimum wage argument demonstrates clearly the need for a healthy three-party relationship between Government, Labour and Businesses – if they are constantly at odds, lobbing stone after stone at each other, how can a country progress?

Trying to decide if the minimum wage is too high or too low, is just like asking if a cup is half empty or half full – it depends on who’s perspective the opinion is solicited.

 

 

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About the author

Benjamin Chiang

Benjamin Chiang is an enthusiast of good advertising, deep thinking, labour issues and chocolate. He writes also at www.rangosteen.com and occasionally on Yahoo!

The views expressed are his own.

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