Switzerland rejects world's highest minimum wage

A man arrives to casts his ballot during a referendum on May 18, 2014 in Bulle, western Switzerland The proposal "to protect equitable pay" was the most prominent of several referendums

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Swiss voters have overwhelmingly rejected a proposal to introduce what would have been the highest minimum wage in the world in a referendum.

Under the plan, employers would have had to pay workers a minimum 22 Swiss francs (about $25; £15; 18 euros) an hour.

Supporters said the move was necessary for people to live a decent life.

But critics argued that it would raise production costs and increase unemployment.

The minimum wage proposal was rejected by 76% of voters. Supporters had argued it would "protect equitable pay" but the Swiss Business Federation said it would harm low-paid workers in particular.

The issue was the most prominent of several referendums held on Sunday.

A man casts his ballot on May 18, 2014 in Bulle, western Switzerland, during a referendum on minimum wage Votes were held on a number of issues with the minimum wage attracting the most attention
A member of the Swiss UNIA workers union sets a ribbon around a petrol pump during a protest at a filling station Most of Switzerland's low-paid workers operate in the service industry
A campaign poster against the Swedish fighter jet Gripen is seen in Geneva (7 May 2014) Critics of the proposed $2.8bn purchase of the jets made by Saab say that it requires cost cuts in other key policy areas such as education

A controversial plan to buy 22 Swedish-made Gripen fighter jets for the Swiss Air Force was narrowly rejected by 53% of voters.

Meanwhile, 63% of voters backed a plan to impose a lifelong ban on convicted paedophiles working with children.

But it was the trade union-backed proposal to ensure that an annual salary was not less than £32,000 ($53,600) a year that provoked the most debate.

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Imogen Foulkes
Analysis: Imogen Foulkes, BBC News, Geneva

This was the third referendum on pay in Switzerland in the last 18 months, reflecting concern that the gap between rich and poor is growing here too.

Last February the Swiss backed restrictions on bosses' bonuses, but in November they rejected even stricter controls which would have limited top salaries to no more than 12 times that of the lowest paid.

The vote is a sign that Switzerland's long tradition of social partnership between business leaders and workers may be eroding: the bankruptcy of national airline Swissair over a decade ago, the disastrous losses suffered by the big Swiss banks in the subprime mortgage scandal, and the huge salaries and bonuses which continue to be paid in the banking and pharmaceutical industries have led many Swiss to lose trust in their business leaders.

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Unions argued that the measure was necessary because of the high living costs in big Swiss cities such as Geneva and Zurich.

The unions are angry that Switzerland - one of the richest countries in the world - does not have a minimum pay level while neighbouring France and Germany do.

Swiss monthly living costs

  • One-bed city centre flat: 1,800 francs
  • Utilities: 100-200 francs
  • Health insurance: 300-400 francs
  • Public transport: 50-70 francs
  • Restaurant meal for two: 100-150 francs

They argue that surviving on less than 4,000 francs a month is not possible because rents, health insurance and food are all prohibitively expensive.

The minimum wage in Germany will be 8.5 euros an hour from 2017.

A key element of the campaign in favour of a minimum wage was the argument that the Swiss welfare system was being forced to subsidise businesses which refuse to pay a living wage.

But business leaders and the government said low unemployment and high standards of living for the majority showed there was no need for change.

Small businesses, in particular Swiss farmers, were especially worried that being forced to pay their staff 4,000 francs a month would price their products out of the market.

Most of Switzerland's low-paid workers operate in the service industry, in hotels and restaurants, and the majority of them are women.

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