BERN, Switzerland — More than three-fourths of Swiss voters recently rejected a plan to create the world’s highest minimum wage.
While supporters of the plan stated it would reduce income inequality, business leaders argued against it, stating that it would make Switzerland less competitive with other nations and thus would lead to higher unemployment.
The Swiss Trade Union Federation gathered enough signatures to put the referendum on the ballot in 2012. The Federation argued that a nationwide salary of 22 Swiss francs an hour—or $25 an hour—is necessary to keep employees earning minimum wage from falling into poverty.
According to the Organization of Economic Cooperation and Development, the highest minimum wage globally is Luxembourg at $10.66 an hour, which was adjusted in consideration of spending power. Following Luxembourg is France at $10.60, Australia at $10.21, Belgium at $9.97 and the Netherlands at $9.48. The U.S., adjusted at $7.11 from the $7.25 rate, was tenth on the list.
“My understanding is that the Swiss minimum wage would have worked out to about $14 in terms of spending power, which I think puts the high costs in perspective,” said John Heilprin, the chief correspondent for the Associated Press in Switzerland.
Switzerland is home to Geneva, one of the most expensive cities in the world
“You can spend $7 for a Starbuck’s grande latte,” Heilprin said. “You can spend more for a deluxe burger at McDonald’s.”
At a news conference in the Swiss capital, members of the Federation Council of seven ministers, including the president of Switzerland, confirmed the vote results.
“A fixed salary has never been a good way to fight the problem,” said Johann Schneider-Ammann, the Economy Minister. “If the initiative had been accepted, it would have led to workplace losses, especially in rural areas where less qualified people have a harder time finding jobs. The best remedy against poverty is work.”
A tally by Swiss TV showed that the referendum had only 23.7 percent of votes in favor of raising the wage. While Switzerland has no minimum wage, the median hourly wage is around 33 francs an hour.
Other referendums voters made a decision on including a ‘controversial’ request by the Swiss military to spend 3.1 billion francs, or $3.5 billion, for Saab’s new Gripen fighter jets, which was narrowly defeated with 53.4 percent of the vote against the purchase.
However, there were some legislative victories. Voters approved an initiative to amend the nation’s constitution by imposing a lifetime ban on convicted pedophiles working with children.
“The vote sent a clear message of concern about protecting children against sexual abuse,” said Justice Minister Simonetta Sommaruga.
The final reform, passed by voters, was a medical reform measure that would provide constitutional support for more family doctors in rural areas.