While Switzerland's booming economy has made the country synonymous with a superlative standard of living, the government estimates that approximately one worker in 10 struggles to pay rent, despite working full time.
Just as the issue has been fiercely debated in the United States, the Swiss go to the polls on Sunday to weigh in on a proposed solution: raising the national hourly minimum wage to 22 Swiss francs ($24.65).
If successful, it would become the world's highest minimum wage; more than double the euro 8.50 ($11.64) agreed to last month in Germany, which has the European Union's largest economy, or the $10.10 sought by US President Barack Obama.
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In Switzerland, one worker in 10 struggles to pay rent, despite working full time. The Swiss would go to the polls on Sunday to weigh in on a proposed solution — raising the national hourly minimum wage. If successful, it would become the world’s highest minimum wage. This is the third time the Swiss have been called upon in recent national referendums to decide the value of work
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The referendum is the latest twist on the global debate over the causes and extent of income inequality, what if anything should be done about it, and whether higher minimum wages ultimately help or hurt workers.
"It is a scandal that in our wealthy country, people are working full time and still can't live on their salary," said Daniel Lampart, an economist for the SGB/USS trade unions, which introduced the initiative with support from politicians on the left.
Gionatan De Vita, who quit a salaried position at Nestle to run his own Italian-style cafe on a winding side street down from Basel's landmark red sandstone gothic church, said he already could not afford to hire any full-time workers, even at a much lower salary than the amount proposed.
"I have three people who I pay at an hourly rate for flexible shifts of about three hours, plus I am here all day myself," De Vita said as he wiped down the counter of his bar. "There is no way I could afford to pay a monthly minimum wage of 4,000 francs," roughly the equivalent of 22 francs an hour.
While poverty here is a relative thing for most people, given the generous social welfare system that ensures a basic standard of living, this is the third time the Swiss have been called upon in recent national referendums to decide the value of work. In March 2013, voters supported a move to give shareholders a stronger say in executive pay, but in November they opposed an outright cap on the amount executive can earn. Many Swiss are clearly uncomfortable with yawning income disparities. Yet they are also uneasy with handing the government too much control over setting salaries, traditionally negotiated by companies and unions within each industry.
For a full-time worker, the proposed minimum wage would amount to nearly two-thirds of Switzerland's median salary in 2012, according to official numbers. Of the 339,000 people the federal statistics office estimates currently earn below the median salary, two out of three are women, most of them working in retail, hotels or personal services.
Recent surveys have suggested waning support for the measure, but the government was caught off guard in February when citizens unexpectedly voted to restrict the number of European Union citizens allowed to live and work in the country. Under Switzerland's system of direct democracy, anyone can propose an issue, and if it wins enough support, it is put to citizens for a vote.
Switzerland remains one of the most business-friendly countries in Europe, but the series of referendums focusing on economic issues in the last two years has rattled many executives. Some of the country's largest companies, which include Nestle and Swatch, say they fear that introducing a minimum wage could damage competitiveness.
Two-thirds of Swiss jobs are in small and midsize businesses. Owners of hotels, restaurants and retailers, especially in cities near the borders, are fearful that the proposal would force them to cut largely untrained cleaning and kitchen staff members, because they would otherwise be required to pay them salaries equivalent to that of receptionists or waiters with two to three years' vocational training.
They also argue that a minimum wage would have the opposite effect of that desired by the unions, by forcing more people into part-time jobs that would increase the country's unemployment rate, which stood at 3.2 per cent in April, according to government figures.
"The initiative would be a boomerang for Switzerland," said Marcel Schweizer, president of Gewerbeverband Basel-Stadt, a trade association in Basel representing small and midsize businesses. "Many branches would be forced to cut jobs that would become too expensive. The hardest hit would be poorly qualified workers."
The Association of Swiss Cleaning Companies, Allpura, issued a sharply worded statement in which it opposed the wage initiative because it "destroys jobs and weakens Switzerland's competitiveness." It said cleaners earn 18.50 to 26.50 francs an hour.
Tobias Straumann, a professor of economic history at the University of Zurich, said he did not believe that the initiative would pass, but he pointed out that the debate had already had an indirect influence on salaries in several industries in which wages were the lowest.
Lidl, a German-owned discount supermarket chain, raised its monthly base wage for workers in Switzerland to 4,000 francs at the start of the year.
© 2014 The New York Times News Service
