LONDON, UK — Swiss workers could soon be making the highest minimum wage in the world if a national vote Sunday goes their way.
Labor unions have been campaigning for months to win public backing for a minimum hourly wage of 22 Swiss francs, or nearly $25.
The Swiss government and business leaders have warned that the initiative would destroy jobs, hurt lower skilled employees and make it harder for young people and others to enter the workforce.
“The proposed statutory minimum wage would be the highest in the world, by some margin,” the Swiss economics ministry said in a statement. “Consequently, those who would suffer most from the initiative are those it is supposed to benefit.”
Switzerland is a wealthy country, enjoying above average rates of growth and employment and relatively short working hours. The average household has net disposable income of about $30,000, compared with the average of $23,000 in the OECD, a group of 34 of the world’s strongest economies.
But OECD figures also show a considerable gap between rich and poor — the top 20% of the population earn nearly five times as much as the bottom 20% — and anger at growing inequality has been increasing.
Unlike many advanced economies, Switzerland does not have a statutory national minimum wage. Pay is set in negotiations between companies and individuals, or with employee representatives — sometimes across industrial sectors.
Based on a World Bank conversion rate, 22 francs per hour would be equivalent to roughly $17.60 in the United States once the difference in cost of living is taken into account. That would put Switzerland comfortably at the top of the international minimum wage league.
Only Germany would come close to paying similar rates. Europe’s biggest economy will introduce a national minimum wage next year for the first time, at 8.50 euros an hour. That’s worth about $15 in the U.S.
Swiss unions say it’s a disgrace that 330,000 mainly young workers and women in one of the world’s richest countries don’t earn enough to support a decent quality of life.
Backing the initiative would mean raising the wages of about one in every 10 workers by an average of 15%. That would add 1.6 billion francs, or about 0.3% of GDP, to the country’s total wage bill — a price campaigners say Switzerland can afford. Germany’s new minimum wage will mean increases for 16% of workers.
Switzerland’s constitution allows popular initiatives to be put to a national vote four times a year, provided the organizers gather 100,000 signatures in support. In order to force a change in the law, the initiative needs to be approved by a majority of the electorate and the country’s 26 cantons, or districts.
Recent opinion polls suggest the measure will be defeated. But Swiss voters have the capacity to spring a surprise, as they did in February by approving limits on immigration despite warnings of damage to relations with the European Union and business.
A popular initiative to give shareholders more control of executive pay won clear backing from voters in March 2013, although a more radical attempt to cap top salaries at 12 times the lowest paid employee’s was rejected by a big margin in November.
By Mark Thompson
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