Swiss to vote on $25 an hour minimum wage

http://www.usatoday.com/story/news/world/2014/05/16/swiss-minimum-wage/9166687/

by jamesbritt • 12 years ago

78 112 12 years ago

joelgreen• 12 years ago

Sounds like a fast way to get rid of immigrants.

And in the process lower the standard of living of the rest. Or tank the tourism sector, since they might have trouble paying this wage to the low-skilled workers they need. If they don't have that trouble, then even immigrants don't care, most of which already earn well above the proposed minimum wage.

workhere-io2• 12 years ago

Before you compare it to American wages, keep in mind that Switzerland has one of the highest costs of living in the world. http://www.numbeo.com/cost-of-living/rankings_by_country.jsp

unreal37• 12 years ago

Before you dismiss it so fast, the question of how can a person live on $7.25 an hour still deserves some thought? $1,200 barely enough for rent, food and a bus pass.

Maybe $25 is too high, but $7.25 is low.

ryguytilidie• 12 years ago

He didn't dismiss anything. He simply provided a relevant comparison of income levels and cost of living.

workhere-io2• 12 years ago

I didn't dismiss anything, and I'm not saying $7.25 is okay. I'm merely saying that cost of living should be taken into consideration when comparing countries' minimum wages.

tn134• 12 years ago

Why do we think that all work should be sufficient for a person's rent food and bus pass ?

protomyth7• 12 years ago

$7.25 is fine for teenagers looking to pick up some experience and extra cash. The notion that the minimum wage is supposed to provide a living is a good way to remove young people from the job pool.

yummyfajitas2• 12 years ago

Yet somehow, billions of people worldwide live on far less than that number after adjusting for purchasing power. The average Bulgarian subsists on roughly a US minimum wage salary (after adjusting for purchasing power - before adjusting for PPP it's about half a min wage salary). The average Indian subsists on far less.

How do they do this?

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...

(Hint: roommates, cooking at home, long commutes or less desirable cities, giving up luxuries which are common in the US like a car.)

Note: don't say "cost of living". The numbers I cite adjust for that.

MisterBastahrd• 12 years ago

I had a conversation with someone tonight about just this topic. If it takes two full time jobs just to make ends meet, then you can't have a reasonable expectation of them learning a new skill to get a better job. Not only do they not have the time to learn whatever potentially lucrative skill people want to imagine up, but the fatigue from putting in that much time is probably reducing their ability to fully function at either job. Combine that with the fact that being responsible for two jobs limits promotion chances, and you've got people stuck in a perpetual cycle of poverty.

gilgoomesh• 12 years ago

According to Wolfram Alpha, Switzerland's cost of living is 1.535 times that of the U.S.

http://www.wolframalpha.com/input/?i=cost+of+living+switzerl...

This proposed Swiss minimum wage is therefore (roughly) equivalent to a minimum wage in the U.S. of $16.28 per hour (taxation differences and non living-expenses notwithstanding).

olalonde2• 12 years ago

Didn't the Swiss vote on basic income recently? Seems like it would be a much better alternative. Such a high minimum wage is likely to discriminate against the very poor by favouring automation and reducing demand for unskilled workers.

wigginus• 12 years ago

No, they haven't voted yet. There will be a vote, but the date of it is yet unclear.

Kiro• 12 years ago

Automation is never bad.

olalonde2• 12 years ago

Different schools of thoughts have differing opinions regarding that. As a libertarian, I'd argue that the free market is better than government at deciding what needs to be automated. Minimum wages effectively impose a tax on human labor which in turn artificially incentivizes automation. Basic income might suffer from the same problem to some degree (by disincentivizing people to do lower paid jobs) but at least, it would accomplish the stated goal of minimum wages (that is, helping the more needy).

saosebastiao2• 12 years ago

I love when people give us opportunities to empirically measure their bad theories.

octonion• 12 years ago

Those "bad theories" have led to a far higher quality of life than the US.

facepalm2• 12 years ago

Yeah because you can directly compare Switzerland and the US. Where does the high income of Swiss people come from? I don't think the same thing would be replicable for the US (for starters, the US is not a tiny neutral country surrounded by Alps).

saosebastiao2• 12 years ago

Switzerland, which doesn't even have a national minimum wage at all, grew to have a much higher quality of life by the mere presence of theories of the minimum wage. Did I understand that correctly?

UweSchmidt3• 12 years ago

It's difficult to empirically measure any theory if you come into it burdenen with ideology.

copx• 12 years ago

This is the key sentence in the article:

However, 90% of Swiss workers earn well above the proposed minimum and are already among the highest paid in the world.

BasDirks• 12 years ago

It's the key sentence from a US-centric point of view.

id• 12 years ago

This law aims at the 10% that don't earn well.

The US isn't a poor country either. In fact, Americans are also among the highest paid in the world [1]. It's just not evenly distributed.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_average_w...

cma• 12 years ago

Due to the marginal utility of money dropping rapidly as you get more, uneven distribution is much worse than it sounds.

room271• 12 years ago

It doesn't matter whether a country is rich or poor, but whether people are rich or poor. And the USA has a lot of poor people.

bayesianhorse9• 12 years ago

Which means about 10% earn less. Which is a big portion of the labor force that has to be paid more or let go. This is potentially a very big shock for the swiss economy.

andreasklinger2• 12 years ago

I think "lower salaries == more people employed" is an overly simplified model economists teach us to justify dropping wages.

Imho lower salaries doesn't create more jobs it just creates more desperate people willing to work for lower salaries because of its downward loop.

I know this opinion is not popular in the states. But this has nothing to do with socialism. Socialism is about common ownership, common management. Minimum salaries is about raising the middle class.

chongli2• 12 years ago

Paying people more means they'll have more money to spend which can create more jobs. There is no clear cut answer here. Anyone who claims they can predict exactly what will happen with any change to the minimum wage is either a liar or a fool.

mkhattab• 12 years ago

Let's say the Swiss set the minimum wage to $25/hr or even half that, $12/hr, what kind of ripple effect would we expect on other salary groups? Would they increase by the same proportion?

seanmcdirmid3• 12 years ago

The effective minimum wage (what you have to pay to attract workers) is already probably over $12/hr in Switzerland.

Everything is already expensive, so I would expect the ripple effects to be slight.

folli• 12 years ago

The vote is tomorrow and has almost no chance of getting passed.

http://www.gfsbern.ch/DesktopModules/EasyDNNNews/DocumentDow... [german, pdf]

brunnsbe2• 12 years ago

Switzerland's need to export stuff and to do business with the surrounding EU-countries is bigger than the EU-countries' need to do business with Switzerland. Putting a minimum wage this high will naturally impact the prices on goods leading to a shrinking export market. I wonder how they came up with $25/hr and not, let's say, $17,50/hr?

seanmcdirmid3• 12 years ago

Switzerland is already very expensive; a meal at McD's will run you at least 12 CHF. This rise in the minimum wage is not going to affect exports at all (which are all very high end...and how many bankers make minimum wage?); it will make some things slightly more expensive (on top of already being pretty expensive).

brunnsbe2• 12 years ago

Switzerland exports more than just bank services, e.g. grocery products like cheese and chocolate which are products produced with low wages. And yes it'expensive, I'm currently living in Gèneve and paying more than enough for my kebabs (it's cheaper to pay for the tram to Annemasse in France and have the kebab over there).

fla• 12 years ago

It is an honest question, and that's also the most controversial point. The initiants ask for a min wage of (raw) 4000 CHF per month which is approximately 3000 CHF net of taxes. Why this number ? People pretend that's what one need to live well. The reality is more complicated than that, as you may guess, the cost of living really depends on the region and on the industry sector. That's why opposants want to solve this problem with per industry sector conventions (ie: there is already a minim wage in the watch industry) rather than with a global try-fix-it-all law.

bayesianhorse9• 12 years ago

There seems to be a pattern here: Swiss referendums more often than not follow the opinion of the government. In cases where they don't, they seem to be quite problematical.

In the vote for "restrictions on EU immigrations" the swiss want to throw out immigrants. But not those they know personally. Or those on whom their economy depends. So basically the government has the choice between not implementing the proposal as intended, or to harm the economy badly. As far as I know, they haven't solved this Dilemma quite yet.

Maybe this "element of direct democracy" has less impact on the actual "democraticness" than some believe it has. At the very least it poses a serious risk for long term investors or entrepreneurs. Any harebrained idea that comes up in this process has a non-zero chance of being implemented just by the power of low participation or ambiguous opinions.

At best, governments already take the "pulse" of public and expert opinion when setting policy, making referendums futile or redundant.

algorias• 12 years ago

At best, governments already take the "pulse" of public and expert opinion when setting policy, making referendums futile or redundant.

So you're saying a referendum is futile because it forces the government to (preemptively) do what the people want? That's exactly it's purpose!

bayesianhorse9• 12 years ago

I have not said that, and you deliberately misunderstood me to make a point against practical democracy.

In any country with a practical, working, real-world democracy you can see the government mostly following opinion polls.

Finding out "what the people want" is extremely hard, at least if you aren't a populist politician or their adherents. The task doesn't get easier if you pose simple yes and no questions.

I think it is dangerous that people in western democracies increasingly equate referendums and votes with democracy, leaving out the conditions of the vote, the environment, the institutions and the state of the human rights.

mweibel• 12 years ago

Swiss referendums more often than not follow the opinion of the government.

This is an initiative, a referendum is something different.

In cases where they don't, they seem to be quite problematical.

Not always, just in the recent years there have been some problematic votes which were accepted due to (IMO) fear generated by certain parties. There have been, however, also problematic initiatives/referendums where the people followed the governments opinion.

At the very least it poses a serious risk for long term investors or entrepreneurs. Any harebrained idea that comes up in this process has a non-zero chance of being implemented just by the power of low participation or ambiguous opinions.

IMO you're a bit oversimplifying here. There are various hurdles to take when you want to vote on a certain thing. Whether things are accepted or declined depends on various things and can change because of some little thing in a week.

The serious risk blabla is always a thing which various parties bring up in various votes. It never has had a bit impact as of now.

In any other country laws are usually made by lobbyists. We have this problem here as well, but at least the public opinion is a bit harder to change in votes..

bayesianhorse9• 12 years ago

In any other country laws are usually made by lobbyists.

Isn't that a much bigger oversimplification, than just saying that entrepreneurs in Switzerland have seen serious risks in quite a few of these votes? Isn't it true that they fear for more of these bad ideas? Even if these ideas only have a slim chance of coming throuhg?

thecopy• 12 years ago

Government intervention in the free market is never a good thing. If i would have a citizenship i would have voted no.

bayesianhorse9• 12 years ago

I can see various situations where government intervention in free markets is most decidedly a good thing.

For example, food and health industry needs to be regulated. The incentives for self-regulation otherwise are so low, that lots of people die and suffer until the market reaches its supposed optimal equilibrium of high safety standards.

Antitrust regulation is an intervention in a free market, though one could argue that without antitrust regulation, there is no free market...

brazzy• 12 years ago

Google "market failure", little Randroid.

bmmayer1• 12 years ago

The actual dollar amount of the wage isn't the same as real income in terms of what goods and services you can buy relative to the wage, so sentences like this are useless: "would make mostly immigrants here in agriculture, housekeeping, and catering among the world's highest paid unskilled workforce." It's actually likely that the higher minimum wage will lower real incomes by driving up production costs.

Yrlec• 12 years ago

In Sweden there's no minimum wage at all. We let the market set it.

UweSchmidt3• 12 years ago

Nice.

However there is an implicit minimum wage linked to welfare. Any wage must be above what welfare pays or people might not bother working at all.

andreasklinger2• 12 years ago

Agree.

Welfare is basic an implicit minimum wage.

Also i personally believe that markets can only regulate themselves if all players start with the same conditions. Which they do more likely in sweden as they do in the states (eg. education, healthcare, middle class, etc)

hershel• 12 years ago

Do youmean that if someone doesn't want to work he can easily get welfare ?

mediascreen• 12 years ago

Well, we have extremely powerful unions that negotiate on the workers behalf and blockade companies that don't follow the collective agreements. We also have laws that let unions veto work visas for immigrants if they are not paid according to the collective agreements.

This makes the de facto minimum wage something that is negotiated between the main unions and a few large employers' federations.

hellbreakslose• 12 years ago

Fact here: If you convert $ to euros with the current rates, that makes minimum wage 4380 Euros a month.

I worked for a year in Switzerland and I am telling you, you can barely live with that kind of money. Everything is so expensive over there at least Zurich.

So yes expect a Swiss Tourist coming in the US buying everything and have a lot of funs, but in Switzerland with that wage he won't be saving anything.

whoismua• 12 years ago

and how much does a loaf of bread, gasoline, rent etc etc cost there? It's all relative

maccard• 12 years ago

cost of living is about 1.5 times higher than the US. Source is somewhere in this comment thread

crb002• 12 years ago

The effect is that lower skilled swiss citizens will emigrate now that they can no longer be employed in their home country. It is the wolf of eugenics under the sheep's clothing of leftist charity.

lauradhamilton• 12 years ago

$25 in Switzerland is gets you about what $12 in the US does. So this really isn't as high as it sounds.

Swiss to vote on $25 an hour minimum wage

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