Swiss set to vote on world's highest minimum wage

Swiss set to vote on world's highest minimum wage
By Chris Harris with REUTERS
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Switzerland will go to the polls on Sunday (May 18) over whether to introduce the world’s highest minimum wage.

The government, business leaders and 64% of voters, according to one opinion poll, are against the proposal.

Could there be an EU-wide minimum wage?

It’s very unlikely, according to Ilaria Maselli, an economic researcher at The Center for European Policy Studies. She said the number of countries in the EU, and the fact that a minimum wage is such a sensitive issue, made it an outside shot.

France has pushed for an EU-wide minimum wage, specific to each country. It claims the posted worker directive allows firms to send employees to another EU country, on a temporary basis, but at a lower cost. It says because labour costs are higher in France, this creates an unfair advantage.

But Maselli said a minimum wage would make Europe’s labour force less flexible, which is undesirable during economic crises.

She added: “In the US I’d be in favour of a minimum wage because there is stronger inequality, there.

“But in Europe the social situation is different, the unions are stronger and the spending on social policies is higher.”

It would see a minimum wage of €18.23 an hour introduced.

Despite opposition to it, there is little certainty about the outcome of Sunday’s referendum.

Switzerland’s direct democracy has allowed its citizens to vote on a number of issues, including immigration and executive pay.

They unexpectedly voted in February to curb immigration from the European Union – Switzerland’s biggest trading partner, with which it now shares free movement of labour – ignoring warnings from business that such a move would hurt the economy.

“I’m feeling uneasy about the upcoming vote,” said Ralph Mueller, division head at electronic components maker Schurter.

“We would have to significantly raise the salaries in our factory in Mendrisio, where about 80 of our 100 workers commute from Italy, but we would also have to raise the wages of our higher-paid staff. It would cost about 250,000 francs (166,920 pounds) a year.”

The government, meanwhile, warned a minimum wage “would threaten jobs and make it even more difficult for little qualified staff and young people to find a first job”.

Economie Suisse, a federation of Swiss businesses, said it was a mistake that was not in the interest of employees it claims to help.

A spokesman told euronews: “The initiative pressurises primarily small businesses, artisans and peasants, and whole regions of Switzerland. People without special training or little qualifications, young people early in their careers and professional workers seeking to reintegrate, will be the big losers.”

But supporters say it would help smooth out salary inequalities and ensure a person working full time can live decently.

In 2012, according to the federal statistics office, 10 percent of full-time or equivalent Swiss jobs paid less than two-thirds of the median salary, with lower paid jobs found mainly in shops, hotels and personal services. Of 339,000 people on a low salary, two out of three were women.

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