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

Related Stories

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.

line break
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.

line break

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.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    EUROZONE MANUFACTURING 10:10:
    Flags

    News from the Eurozone is no better, alas. Manufacturing growth slowed to a 13-month low in August, as the PMI reading dipped to 50.7 - down from 51.8 in July. New orders dwindled and factories suffered amid rising tensions between the EU and Russia over Ukraine.

     
  2.  
    HEADLINES
    • UK manufacturing growth slows
    • Fund manager abandons HSBC over fines
    • Mortgage approvals fall in UK
     
  3.  
    UK MANUFACTURING 09:56:

    The UK's manufacturing industry grew at the slowest rate in 14 months in August, following a drop in new orders. The Manufacturing Purchasing Managers' Index, or PMI, fell to 52.5, the lowest since June last year. A reading above 50 indicates growth.

     
  4.  
    WOODFORD ABANDONS HSBC 09:39:
    HSBC

    Neil Woodford, one of the UK's most well-known fund managers, has sold his stake in HSBC. "I am worried that the ongoing investigation into the historic manipulation of Libor and foreign exchange markets could expose HSBC to significant financial penalties," he said on his website. Mr Woodford had 2.68% of his fund's assets invested in HSBC, a package worth £64m at the time of sale.

     
  5.  
    UK MORTGAGES 09:33:

    The Bank of England says British mortgage approvals fell slightly in July compared with the previous month, to 66,569. In January, the measure reached 76,000, but has been wavering as the housing market shows some signs of cooling.

     
  6.  
    MARKET REPORT 09:26:

    The major European stock markets have had a muted start this morning.

    • The FTSE 100 is down 0.12% at 6811.88
    • The Dax is up 0.02% at 9472.17
    • The Cac 40 is down 0.12% at 4375.75

    BAE Systems is the biggest winner in London, up almost 3%, while Morrison Supermarkets has dropped 2.25%.

     
  7.  
    ISLAND FLING 09:11:
    Apia

    Some conferences are more appealing than others. The third UN Conference on Small Island Developing States begins in Apia, Samoa today. Some 50 countries are invited, and the agenda covers a wide-range of topics, including sustainable energy, water and sanitation, and biodiversity.

     
  8.  
    Via Twitter Jamie McGeever, chief markets correspondent for Europe, Reuters

    tweets: "Italian manufacturing sector contracts for first time in over a year. PMI falls to 49.8 in Aug from 51.9 in July, expected 50.8."

     
  9.  
    PERFORM BUYOUT 08:50:

    Perform Group, which owns the Omnisport sport news agency, rose 26% to 256.7 pence in London after Access Industries Group said it would buy the company. It already owns 42.5%.

     
  10.  
    SAMSUNG EXPANDS 08:35:
    Samsung

    South Korean giant Samsung Group is to become even bigger, Bloomberg reports, after merging its shipbuilding and engineering units. Shares in both firms rose as a result of the announcement.

     
  11.  
    ECUADOR'S BITCOIN 08:19:

    Ecuador says its new digital currency will begin circulating in December. The electronic money will be the first backed by a central bank, and will work alongside the country's current currency - the US dollar. The president says it will help poorer people gain access to banking.

     
  12.  
    MICROSOFT ULTIMATUM 08:06:
    Microsoft China

    The clock is ticking for Microsoft in China. Competition authorities have given the firm 20 days to reply to questions over the compatibility of some of its software, Reuters reports. Microsoft is one of several foreign companies that have come under scrutiny in the country in recent weeks.

     
  13.  
    PUTIN SEEKS PARTITION 07:51:
    Putin

    The Financial Times leads with Vladimir Putin's call for talks on "statehood" for south-east Ukraine. The paper calls it a provocative comment, which will heighten fears that Moscow is seeking partition for Ukraine. The Daily Telegraph says David Cameron and Barack Obama are to respond to the Russian president by urging NATO allies to increase defence spending. In a leader article the paper also recommends fresh sanctions.

     
  14.  
    BERKELEY PERFORMANCE 07:37:

    Berkeley Group, the home builder, is having its annual meeting today. The firm is "well positioned to continue to invest in the business and deliver returns to shareholders. Earnings this year are anticipated to be in line with current market expectations," chairman Tony Pidgley will say.

     
  15.  
    KIER CONTRACT 07:23:

    Kier Group, the builder, says it is the preferred bidder to design and build a new £50m residential tower in London. The company says it will "design and construct 224 luxury apartments arranged in four blocks".

     
  16.  
    GOING SOUTH 07:11:
    St Andrews

    The Guardian reports that Scotland's top universities are bracing themselves for a "brain drain" of their most talented scientists if there's a "yes" vote for independence. The paper says senior figures believe Scotland's best known universities would lose access to billions of pounds of funding - the subjects most at risk are said to include advanced computing and genetic research. However a source close to the Scottish government says the concerns are misplaced and research funding will be maintained.

     
  17.  
    CUBAN IMPORTS 06:57:

    New rules are coming into force in Cuba, limiting the amount of goods people can take into the country in their luggage. For example, Cubans will be allowed only 10 kilos of detergent rather than 40, 24 bras rather than 48, and just two flat screen televisions. Many Cubans see the new restrictions as throttling one of the few sources of high-quality consumer goods.

     
  18.  
    RAC LISTING 06:47: Radio 5 live
    RAC rescue vehicle

    Holly Cook, of Morningstar, was on 5 live too, talking about the car breakdown specialists RAC, who are said to be considering a stock market flotation. How come? It shows "more confidence in the market" and may be seen as a good investment as its business is easily understood, she says.

     
  19.  
    FINANCE LITERACY 06:41: Radio 5 live

    Tracey Bleakley adds that the first rule of money management is "knowing the difference between something you need and something you want." Think about that in the lunch queue.

     
  20.  
    FINANCE LITERACY 06:35: Radio 5 live
    Classroom

    Tracey Bleakley, chief executive of the Personal Finance Education Group is talking about the government's new plan to provide education on financial planning. "We've all got to talk about it," she says, adding that children could educate their parents. That way people can see through "the marketing" that lots of debt is a good idea.

     
  21.  
    TESCO PERFORMANCE 06:30: Radio 5 live

    Tesco is struggling to compete with the likes of Aldi and Lidl because the smaller supermarkets stock fewer lines and focus on keeping prices low. "Tesco are giving people far too many reasons to go elsewhere," Steve Dresser, retail analyst, tells Wake up to Money.

     
  22.  
    TESCO'S NEXT MOVE 06:27: BBC Radio 4

    Tesco's new boss, Dave Lewis, starts work today at the beleaguered supermarket chain, and Holly Cook, of the investment site Morningstar, tells Today that his first move may be to slash prices. Tesco, she says, "used to be a value proposition," but is now "not that much cheaper" than its rivals.

     
  23.  
    EU REVOLT 06:20:
    Cameron

    In its main front page story, the Independent says David Cameron is facing a damaging new revolt over Europe. It says up to 100 Conservative MPs are planning to defy him by declaring that they'll vote to leave the EU - regardless of what concessions he wins for Britain.

     
  24.  
    NETWORK RAIL 06:17: Radio 5 live

    Philip Haigh, railway writer, is still on Wake up to Money. Why is Network Rail in £33bn of debt? It's been spending lots of late, he says. Railway stations, for example, have never looked better. "You just have to look at King's Cross and see what they've done there," he says.

     
  25.  
    BORIS TAKES OFF 06:14:

    Boris's comments come as we await news on whether the Airports Commission will put his favoured plan for a Thames estuary airport back onto its shortlist of options. Incidentally, Mr Johnson is seeking nomination as the Conservative parliamentary candidate in Uxbridge and South Ruislip - where Heathrow expansion is widely opposed.

     
  26.  
    BORIS TAKES OFF 06:07:
    Plane over Heathrow

    The Telegraph carries a piece by the Mayor of London, Boris Johnson, in which he warns that expanding Heathrow, and ditching his plan for a new airport in the Thames estuary, would be a "disaster". But Mr Johnson, who has previously called for the closure of Heathrow, now suggests it could remain open as a secondary airport.

     
  27.  
    NETWORK RAIL 06:03: Radio 5 live

    Philip Haigh, railway writer, is on Wake up to Money, talking about Network Rail's move to the government's balance sheet. On the one hand, he says, it means the state-owned company can borrow more cheaply from the government, but the government will also be able to appoint directors and intervene in things like executive pay.

     
  28.  
    06:01: Howard Mustoe Business reporter

    Morning! Get in touch via email bizlivepage@bbc.co.uk or via Twitter @BBCBusiness

     
  29.  
    06:00: Joe Miller Business Reporter

    Good morning. It's a good day for current account holders - particularly those who have experienced the maddening misfortune of being charged for going overdrawn by a few pennies. Banks will now have to give customers until 2pm to cover funds before slapping on a levy. Stay tuned for reaction to that news, and the rest of the business headlines.

     

Features

  • Polish and British flags alongside British roadsideWar debt

    Does the UK still feel a sense of obligation towards Poles?


  • Alana Saarinen at pianoMum Dad and Mum

    The girl who has three biological parents


  • Islamic State fighters parade in Raqqa, Syria (30 June 2014)Who backs IS?

    Where Islamic State finds support to become a formidable force


  • Spanish volunteer Rafa Munoz Perez practising with a rifle in Donetsk, 7 August Motley crew

    The Europeans who pitch up in Ukraine to join the fight


From BBC Capital

Programmes

  • Volcanic eruptionThe Travel Show Watch

    Uncovering the secrets of the Icelandic island buried by a volcanic eruption

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.