Swiss business leaders shocked by past popular votes to cap executive pay and curb immigration are wary of a May 18 referendum that could see Switzerland adopt the world’s highest minimum wage of nearly $25 an hour.
A recent opinion poll by gfs.bern found 64 percent of voters reject the proposal, made by the SGB union and supported by the Socialist and Green parties. But Switzerland’s system of direct democracy, with frequent popular votes on social, political or economic matters, has brought surprises before.
The Swiss unexpectedly voted in February to curb immigration from the European Union — Switzerland’s biggest trading partner, with which it now shares free movement of labor — ignoring warnings from business that such a move would hurt the economy.
“I’m feeling uneasy about the upcoming vote,” said Ralph Mueller, division head at electronic components maker Schurter.
“We would have to significantly raise the salaries in our factory in Mendrisio, where about 80 of our 100 workers commute from Italy, but we would also have to raise the wages of our higher-paid staff. It would cost about 250,000 francs a year.”
Swiss voters overwhelmingly rejected a proposal in November to cap the salaries of top executives at 12 times that of their company’s lowest earner, but they did back a plan last year to give company shareholders the final say on pay and incentives.
The State Secretariat for Economic Affairs (Seco) says the proposed minimum wage of 22 Swiss francs ($25.13) an hour would be the world’s highest even when adjusted for purchasing power in notoriously expensive Switzerland.
The economically liberal country 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.