Swiss Voters Reject World’s Highest Minimum Wage
In a referendum held yesterday, Swiss voters rejected what would have been the highest minimum wage in the world:
BERLIN — 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, as one of the world’s most prosperous countries and home to major international banks and hedge funds, as well as big chemical, pharmaceutical and machinery companies, might seem an unlikely venue for a debate on wage disparity. But unions argued that many people in the lowest-paying sectors of the economy struggled to make ends meet because their wages had not kept up with a cost of living among the highest in the world.
The vote on Sunday showed, however, that most Swiss do not view low wages as a problem, or at least not one that the government should be asked to fix.
“A fixed salary has never been a good way to fight the problem,” said Johann Schneider-Ammann, the economic minister. “If the initiative had been accepted, it would have led to workplace losses, especially in rural areas where less-qualified people have a harder time finding jobs. The best remedy against poverty is work.”
This just happened to be one of those times where popular will and economic sanity ended up coinciding. When matters like this have been placed before voters in the United States, they have generally passed quite comfortably notwithstanding decades of economic analysis demonstrating the deleterious impact of minimum wage laws on the employment of people at the lowest end of the economic spectrum. Indeed it’s worth noting that in the current debate over this issue in the United States many large retailers are supporting increases in the minimum wage in no small part because they are better situated to absorb the costs of such an increase, perhaps even without passing those costs on to consumers, than their smaller competitors. Obviously, the voters in Switzerland know something that Americans could stand to learn.