Early projections show Swiss reject world’s highest minimum wage

ZURICH — Swiss citizens rejected a proposal to introduce the world’s highest minimum wage of at least 22 Swiss francs (S$31) an hour in a vote yesterday, early projections showed, bringing relief to business leaders worried that the measure would damage the Swiss workplace.

About 77 per cent of voters in the wealthy nation dismissed the proposal made by Swiss union SGB and backed by the Socialist and Green parties, a national projection for Swiss SRF television showed, while 23 per cent were in favour. The proposal corresponded to a monthly paycheque of 4,000 francs.

The referendum is the latest twist on the global debate over the causes and extent of income inequality, what if anything should be done about it, and whether higher minimum wages help or hurt workers.

“It is a clear vote by the people, a vote of trust in the economy,” the director of the Swiss trades association, Mr Hans-Ulrich Bigler, told Swiss television yesterday.

“Generally in Switzerland, people don’t like the state to regulate too much,” said Mr Andreas Ladner, professor of public administration at the University of Lausanne.

Economically liberal Switzerland does not have a nationwide minimum wage, but the median hourly wage is about 33 francs an hour.

Supporters of the proposed minimum wage said it would help smooth out salary inequalities and ensure a person working full time can live decently. Trade unions backed it as a way of fighting poverty in a country that, by some measures, features the world’s highest prices and most expensive cities.

However, critics said the measure would hurt competitiveness and lead to job cuts, harming the low-income workers it is designed to help. Many small- and medium-sized businesses, which generate two-thirds of employment, cannot afford to pay employees more, the government said.

Swiss voters have frequently supported free enterprise: In 2001 they backed a constitutional limit on federal government debt, while in 2012 they voted down a proposal for six weeks of paid vacation.

However, popular votes have thrown up surprises before, most recently in February when the Swiss unexpectedly voted by a razor-thin majority to curb immigration from the European Union, ignoring warnings from business that such a move would hurt the economy.

While poverty in Switzerland is a relative thing for most people, given the generous social welfare system that ensures a basic standard of living, this is the third time Swiss nationals have been called upon in recent national referendums to decide the value of work.

In March 2013, voters supported a move to give shareholders a stronger say in executive pay, but in November they opposed an outright cap on the amount executive can earn.

Anger has grown over the widening income gap in the generally egalitarian country, where the wages of executives have ballooned while those of low-income workers lag.

Yet, many Swiss are also uneasy with handing the government too much control over setting salaries, traditionally negotiated by companies and unions within each industry.

Under Switzerland’s system of direct democracy, a plebiscite on almost any topic can be called by collecting 100,000 signatures from the country’s eight million people. Plebiscites are legally binding, giving the government little or no choice but to implement the will of the people. AGENCIES