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Sensible people, the Swiss

Swiss voters reject plan to establish world’s highest minimum wage

Swiss voters have rejected a proposal to create what would have been the world’s highest minimum wage after siding with the government and business leaders in a referendum.

That should read “…after siding with the government, business leaders, and those Swiss people who could least afford to be unemployed.”

The plan, which would have pushed up the basic annual salary for a 35-hour week to £27,000, was rejected by 75% of voters. It would have required employers to pay workers a minimum of 22 Swiss francs (£14.66) an hour.

Government ministers opposed the proposal, made by the Swiss Federation of Trade Unions and supported by the Socialist and Green parties, arguing that it would put smaller companies out of business.

Fortunately for some of the poorest Swiss people, their so-called protectors overreached themselves.

12 comments to Sensible people, the Swiss

  • Nick (Blame The French) Gray

    Is it also true that Germany has no minimum wage level? If so, why isn’t this heard about more often?

  • Vinegar Joe

    If £14.66 is good, why not just jack it up to £100.00? Surely that would be better?


  • Paul Marks

    Nick – Germany is introducing one.

    The SPD (the German Labour party) had the worst election results for decades – therefore they control the government.

    No that is not one of my many typing errors – it is the way the German political system works.

    Both German liberal parties (who disagree on the E.U. – the “Alternative for Germany” being the good liberal party, from my point of view) both got just under 5% of the vote.

    Therefore (under the German system) they get no seats in the German Parliament – none.

    The “conservatives” (the CDU and the Bavarian CSU) got just under half the total vote – therefore (under the German system) they get just under half the seats in Parliament.

    Spot a problem?

    The various leftist parties in Germany (SPD, the “reformed” Communists, the Greens – and so on) get just over half the seats in Parliament (even though they got far less votes).

    So to govern the CDU/CSU had to make a deal with either the SPD or the Greens (who, contrary to the Economist magazine, are even worse than the SPD).

    Short version – on everything from the minimum wage to government spending, Germany is now buggered.

    Germany has done well up to now – but now the nuclear power stations are being closed and the minimum wage law is coming (and lots of other stuff).

    The SPD (who, I repeat, had the worst election results for decades) now control Germany.

  • Paul Marks

    On Natalie’s post.

    Yes more than 76% of the Swiss seem to understand that a wage is a price (the price of work).

    If the prices of goods and services are set by the state (not by supply and demand) then one gets economic chaos.

    Want a shortage of goods?

    Then introduce maximum prices below the market price (as in Venezuela).

    Want more unemployment?

    Then introduce a minimum wage above the market wage (the wage determined by supply and demand for the various sorts of labour).

    Now if someone could please explain this basic stuff (which can be understood by any low skilled worker – for example ME)to Mr David Cameron – first class degree in PPE from Oxford.

    If a minimum wage is below the level of the market wage (i.e. supply and demand) then it is irrelevant (as people will be paid the money whether or not the “minimum wage law” exists), and if it is above the level of market wages then then the minimum wage law is harmful (as it will increase unemployment).

    Anybody should be able to understand this.

    However, all the major political (and so on) people in Britain claim they do not understand this at all.

    To them passing a new regulation means that people will be paid more (for doing the same job).

    And some people wonder why I have grown more bad tempered as I have got older…..

    Decades living in a country that is either ruled by morons, or by liars (people who pretend not to understand what they really do understand) has been very irritating.

  • Snorri Godhi

    Actually the Swiss Socialist Party is in the Swiss government (Federal Council). Perhaps somebody more familiar with Swiss politics can explain how a party can oppose government policy and still stay in government?

  • AndrewWS

    @SG: The Federal Council is the Swiss collective head of state (i.e. government) and contains representatives of all the major parties according to a long-established formula.

    It really says something about Switzerland that, not only have they rejected the minimum wage, but also, the Swiss People’s Party, usually regarded as comparable to Ukip, dominates the parliament, and the country has next to no social welfare provision; people take it as read that they have to insure against such calamities as illness and unemployment.

  • Snorri Godhi

    Andrew: i was aware of that, but i am still puzzled as to how the collective head of state/government can express an opinion different from that of one of its constituent parts, without requiring that that constituent part tones it down if it wants to stay in government.
    I suppose this also happens if/when there is a referendum concerning the EU, and all other parties side against the Swiss People’s Party.

    The Swiss achievement is even more impressive if we keep in mind that there are so many immigrants btw.

  • Snorri Godhi

    And some people wonder why I have grown more bad tempered as I have got older…

    Paul: i also thought that there were good reasons for my short temper; but then i cut down on carbohydrates.

  • Mr Ed

    It is a good thing that the Athenian (?) system of executing those whose legislative proposals failed does not hold sway in Switzerland. However, the fanatics will return again and again to seek to implement a minimum wage in Switzerland, like the waves of Red Chinese in the Korean War, the battle plan being that the enemy runs out of ammo first.

  • A Swiss

    The Swiss parliament consists actually of two chambers. The Nationalrat (NR / House of Commons) and the Ständerat (SR / Senate).

    The later is controlled by the FDP (originally classical liberal) and CVP (originally catholic) although by now they only get about a third of the popular vote. These two parties resemble the bourgeois establishment. The SVP controls only about 25 % of the NR.

    The seven members (ministers) of the Bundesrat (BR / national Government) are actually voted in after each national election by the joint assembly (SR + NR). And of course there is a lot of horse trading going on between the so called “coalition of common sense” (FDP, CVP, SP, and now (and for now) also BDP – a SVP splitter fraction). By the way a a Bundesrat (eg a member of the BR) cannot be sacked by the parliament till after the next election. But the Swiss government is week by constitutional design anyway.

    Note that members of the cantonal governments are elected by popular vote via absolute majority in the 1st and the relative one in the second round.

    On the other side you need only 50,000 valid signature to call a (national) referendum on a law. And of course you can demand a change of constitution with 100,000 valid signatures. In comparison (and if I remember correctly) there are about 5+ million voters in Switzerland. However, the national parliament cannot be forced to abide by the Swiss constitution, only the cantons and communities are.

    This way Switzerland has floating coalitions of minorities depending on the law / subject debated. There is no true majority – people define themselves as member of a specific, quite often local, minority group. But everybody considers himself very much Swiss under any circumstances (particularly abroad).
    This is way a party can be in government but in opposition at the same time. And this is also the reason why compromise is the Swiss way of doing things because otherwise you risk a referendum. And of course it definitely now part of the mentality as well. In combination with our true federalism this is the reason why different populations can successfully live in one country. Though in fairness there is the army (so people get to now the “others”, at least up to a point) and the federal subsidies probably help too…

    Therefore judges cannot make to much politics, however the “mandatory law of nations” argument is wheeled out quite regularly in Switzerland to protect criminals by the “liberals”. Hence, this is the reason why another initiative passed this weekend that bans convicted pedophiles to ever work again with children.

    There have been way too many pedophiles and rapists been released by “liberal” judges and psychiatrists for being safe that were not in the last few years.

    And finally a few little historical titbits for your readers: To date, Switzerland is the only country where a liberal revolution of the 1840s has been successful (after a civilised 6 week civil war in 1847). Its original and today’s modern constitutions is actually modeled after the US one. They are sister republics, though one of the two countries is probably a bit less degenerated…

  • A Swiss

    @ AndrewWS

    I think you are not quite correctly informed. Switzerland spends the 3rd highest rate on welfare as a percentage of GDP of all OECD countries. Though this figure includes state AND private spending.

    By law you are actually obliged to buy a private company health insurance (Krankenkasse). Low income persons get grants and about 50 % of the running costs of hospitals are paid by the tax payer. Additionally you get grants if you are in a (usually local or regional state) retirement or nursing home and you have run out of funds (Hilflosenentschädigung).

    Employer and employee contributions (about 5 – 6 % each) cover for basic state pensions (AHV) (heavily skewed towards the low income pensioners), basic disability (IV), unemployment (ALV), accidents at work and elsewhere (BU and NBU) and an administrative fee.
    The accident insurance for the (small) first and second sectors of the economy is administrated by the quango (“Anstalt”) SUVA this is due to that they also do rehabilitation. For the third sector it is usually a private company.
    Note that the by western standards Switzerland’s low social security contributions makes it feasible to employ “low productivity” staff. Hence the low unemployment rate in Switzerland.
    AHV and IV are additionally financed with other taxes (VAT – officially only temporally, alcohol, tobbaco, etc.).

    Plus of course there is a mandatory private pension contribution for both parties.

    There is a 13 week maternity leave for woman and if do your mandatory military service after base training you get 80 % of your salary as well (which in the later case I consider only fair) (EO).

    Normal welfare (after unemployment benefits have run out) and additional grants if your pension / disability benefit is below a (relatively low) threshold is paid with local tax (and dispensed by local government).

    If you get pregnant as a teenager your parents get the child benefits (about CHF 200 to 350 / month per child depending on your canton – note at Swiss price levels) – that is all. I wonder why only 0.4 % of female teenagers in Switzerland get pregnant?

    Air Rescue are charities (REGA / Red Cross and TCS, an automobile club) or private (Air Glacier on behalf of REGA) and not subsidised by the state.

    And the Swiss definitely don’t mind to subsidise public transport and farming.

    The water works are under local and the electricity companies under cantonal control and ownership. Additionally the three layers of the state control and own the public transport system, although some local and regional bus services are run by private companies on behalf of the responsible governments.

    Nearly every canton has its own bank (Kantonalbank) and the federal state owns the Swiss Post and still controls Swisscom (telecommunication). Not that the federal government actually likes the later fact very much (ordnungspolitischer Sündenfall).

    However, state companies are generally run like a “normal” company though with a social bent.

    Still the fiscal quote is only 27 and the state quote is only 35 % of GDP, respectively.

    I know I have now destroyed quite a few illusions but I still hope this helps.

  • @A Swiss: no illusions destroyed here. I don’t think anyone objects too much to Swiss-style government subsidies, provided that all this is accompanied by a powerful work ethic (which the Swiss people seem to possess to a higher degree than most European countries).