Low-paying jobs like waiting staff account for 10.5% of the working population (Keystone)
Voters in Switzerland have rejected plans for a nationwide minimum wage. At CHF22 ($25) an hour, the limit would have been the highest in the world.
Final results from Sunday's nationwide vote show it was opposed by 76.3% of votes cast.
The country’s biggest trade union umbrella group pushed the initiative to a vote, arguing a nationwide limit would entitle everyone to a “decent rate of pay”. In the grander scheme of things, they said the change would help reduce poverty and fight wage dumping, where firms bring in workers from abroad but pay them less.
The Trade Union Federation had the backing of the Social Democrats and the Greens. But opponents – most political parties, the government and the business community – argued it would be tantamount to state interference in a free market economy and could prove counterproductive, forcing firms to cut costs by killing some low paid jobs.
The country’s biggest trade union umbrella group pushed the initiative to a vote, arguing a nationwide limit would entitle everyone to a “decent rate of pay”. In the grander scheme of things, they said the change would help reduce poverty and fight wage dumping, where firms bring in workers from abroad but pay them less.
The Trade Union Federation had the backing of the Social Democrats and the Greens. But opponents – most political parties, the government and the business community – argued it would be tantamount to state interference in a free market economy and could prove counterproductive, forcing firms to cut costs by killing some low paid jobs.
After the vote, unions said they would continue to fight against low pay. The Trade Union Federation chief economist, Daniel Lampart, conceded that a large majority had come out against the minimum wage being enshrined in law. But that does not mean that the Swiss back wages that people are unable to live on, he said.
“People want collective bargaining agreements to guarantee good salaries,” he noted.
The Swiss Business Federation, economiesuisse, described the rejection of the initiative as a clear signal that the electorate wouldn’t tolerate government intervention in a free market economy.
Its president, Heinz Karrer, said: “In recent weeks we were able to show that the initiative hurts low-paid workers in particular.”
He added that the issue of minimum wages would be addressed in collective agreements in some regions and industries.
“People want collective bargaining agreements to guarantee good salaries,” he noted.
The Swiss Business Federation, economiesuisse, described the rejection of the initiative as a clear signal that the electorate wouldn’t tolerate government intervention in a free market economy.
Its president, Heinz Karrer, said: “In recent weeks we were able to show that the initiative hurts low-paid workers in particular.”
He added that the issue of minimum wages would be addressed in collective agreements in some regions and industries.
INTERACTIVE GRAPHIC
Vote results
Check the details of the four nationwide ballots on the updated graphic chart. It gives a breakdown from each of the 26 cantons and also shows the overall results. [.
Too high?
Under the initiative, someone on a minimum wage in Switzerland would have earned double the rate in Britain or the United States. Although high, the Swiss limit was set against the country’s high cost of living, where the median hourly wage is around CHF33.
Luxembourg currently has the top ‘real’ minimum wage at $10.70 an hour, when adjusted for purchasing power, and the Swiss wage would have been comfortably ahead of that at $14. (See infobox)
The minimum wage initiative was the third time in just under two years that Swiss voters have been called upon to decide how much – or how little – jobs should be worth. Last year voters approved a crackdown on pay packages for ‘fat cat’ top managers but rejected a move to cap executive salaries at 12 times that of the lowest paid employees.
The CHF22 an hour limit would have fallen in the current upward range for low-paying jobs, which account for about 10.5% of all jobs.
The Swiss Employers’ Association said in opposing a minimum wage they were not defending a policy of low pay rates, but believed pay policy should be “realistic and flexible”.
The rate proposed was too high, they said, even when the cost of living and median wage was taken into account.
They had warned a high, uniform rate could hurt low earners. Instead of rates being negotiated by social partners through collective bargaining agreements on the basis of local conditions and economics, companies would have to cut jobs to meet higher costs.
Fundamentally, they were against the idea of a nationwide minimum wage being set by the government “contrary to the principle of pay rates being set in accordance with market conditions”, and “incompatible with a liberal economic system”, Alexandre Plassard told swissinfo.ch ahead of the vote.
Luxembourg currently has the top ‘real’ minimum wage at $10.70 an hour, when adjusted for purchasing power, and the Swiss wage would have been comfortably ahead of that at $14. (See infobox)
The minimum wage initiative was the third time in just under two years that Swiss voters have been called upon to decide how much – or how little – jobs should be worth. Last year voters approved a crackdown on pay packages for ‘fat cat’ top managers but rejected a move to cap executive salaries at 12 times that of the lowest paid employees.
The CHF22 an hour limit would have fallen in the current upward range for low-paying jobs, which account for about 10.5% of all jobs.
The Swiss Employers’ Association said in opposing a minimum wage they were not defending a policy of low pay rates, but believed pay policy should be “realistic and flexible”.
The rate proposed was too high, they said, even when the cost of living and median wage was taken into account.
They had warned a high, uniform rate could hurt low earners. Instead of rates being negotiated by social partners through collective bargaining agreements on the basis of local conditions and economics, companies would have to cut jobs to meet higher costs.
Fundamentally, they were against the idea of a nationwide minimum wage being set by the government “contrary to the principle of pay rates being set in accordance with market conditions”, and “incompatible with a liberal economic system”, Alexandre Plassard told swissinfo.ch ahead of the vote.
Ironing out differences
The cost of living varies greatly from region to region, and the collective bargaining in place takes account of real conditions in different regions and industries, the employers association has said.
Unions however hoped the initiative would be a tool to put an end to pressure on pay rates in areas and economic sectors that rely on imported workers from other countries.
Switzerland is currently grappling with how to implement a rightwing move approved by voters in February to curb immigration from European Union countries.
Unions believed their initiative would have been “an effective tool” against firms wage dumping, because it would have required the government and cantons to promote collective agreements specifying the minimum rates of pay and to ensure its implementation, trade union spokesman Ewald Ackermann told swissinfo.ch.
It would have also covered those people who fall through the net. At present, only 49% of employees work under a collective agreement in Switzerland and only 80% of those have a collective agreement that sets minimum wage limits.
Unions however hoped the initiative would be a tool to put an end to pressure on pay rates in areas and economic sectors that rely on imported workers from other countries.
Switzerland is currently grappling with how to implement a rightwing move approved by voters in February to curb immigration from European Union countries.
Unions believed their initiative would have been “an effective tool” against firms wage dumping, because it would have required the government and cantons to promote collective agreements specifying the minimum rates of pay and to ensure its implementation, trade union spokesman Ewald Ackermann told swissinfo.ch.
It would have also covered those people who fall through the net. At present, only 49% of employees work under a collective agreement in Switzerland and only 80% of those have a collective agreement that sets minimum wage limits.
International comparison
The Organisation for Economic Co-operation and Development calculates the real minimum wages in 2013 among 26 member countries, adjusting them for purchasing power parity.
The top five rates were Luxembourg ($10.70), followed by France ($10.60), Australia ($10.20), Belgium ($10) and the Netherlands ($9.5).
When adjusted by currency rates, Australia came top with $15.20, followed by Luxembourg, France, Belgium and Ireland.
(Source: OECD 2014)
The top five rates were Luxembourg ($10.70), followed by France ($10.60), Australia ($10.20), Belgium ($10) and the Netherlands ($9.5).
When adjusted by currency rates, Australia came top with $15.20, followed by Luxembourg, France, Belgium and Ireland.
(Source: OECD 2014)
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