Business

Saturday 26 July 2014

Swiss voters reject world's highest minimum wage

* Latest in string of votes to address widening inequality * Would be world's highest minimum wage at $25 per hour * First projection shows 77 percent of voters against * Swiss will also vote on whether to buy Saab fighter jets

Published 18/05/2014|11:13

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HDR image, City of Basel, Switzerland
City of Basel, Switzerland

Swiss citizens rejected a proposal to introduce the world's highest minimum wage of $25 an hour in a vote on Sunday, according to first projections, bringing relief to business leaders worried the measure would have damaged the Swiss workplace.

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About 77pc 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 23pc were in favour.

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

Sunday's vote is the latest in a slew of initiatives being put to voters to try to address the widening income gap in the generally egalitarian country.

Economically liberal Switzerland does not currently have a nationwide minimum wage. Pay is determined by individual employment contracts or via collective bargaining agreements, some of which also set industry-specific minimum wages.

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.

Anger has grown over the wages of executives in Switzerland which have ballooned while those of low-income workers lag.

Supporters of the proposed minimum wage, which corresponds to a monthly paycheck of 4,000 francs, say it would help smooth out salary inequalities and ensure a person working full time can live decently.

But critics say the measure would hurt competitiveness and lead to job cuts harming precisely the low-income workers it is designed to help.

Voters overwhelmingly backed a referendum last year to give shareholders a binding say over executive pay, but turned down a proposal to cap the salaries of top executives at 12 times that of a company's lowest wage.

The Swiss also vote on Sunday on a controversial deal to spend $3.5bn buying 22 Gripen fighter jets from Swedish aerospace group Saab requiring spending cuts elsewhere, such as on education.

First projections showed voters remained divided over the purchase, with 51pc opposed and 49pc in favour.

Reuters

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