Swiss voters rejected the Minimum Wage Initiative that introduced highest minimum wage in the World

May 19, 2014 16:49 IST

Swiss voters rejected the Minimum Wage Initiative on 18 May 2014. The initiative was rejected by 77 percent of the Swiss voters.

The Minimum Wage Initiative, if passed, would have introduced highest minimum wage in the world at 25 US dollars for an hour (or 22 francs an hour). The Initiative was proposed by the Swiss Trade Unions backed by Socialist and Green parties in light of the growing income inequality in Switzerland.

The growing income inequality has become a major concern in the developed world. It has led to increasing demand for increasing the minimum wages for lower-income worker. For instance President Barack Obama proposed a minimum wage of 10.10 US dollars an hour for American workers. On the other hand, Germen Chancellor Angela Merkel pushed for a minimum wage of 11.64 US dollars an hour from 2017 onwards.

Currently Switzerland does not have a national wide minimum wage while France and Germany do have minimum wage. The pay in Swiss is determined by individual employment contracts or via collective bargaining agreements and industry-specific minimum wages.

The Federal Council (Swiss cabinet) and both houses of Parliament argued that the measure did not take into account regional and sector differences that might merit different pay. The setting of minimum wage at such a high wage would have made difficult for low and unskilled job seekers to find work.

Is this article important for exams ? Yes27 People Agreed
Read more Current Affairs on: world’s highest minimum wage , Switzerland , Swiss Union

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