This page has been archived and commenting is disabled.
Are The Swiss Going Crazy? $25 Minimum Wage Referendum In May
Submitted by Pater Tenebrarum of Acting-Man blog,
Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea.
Let us look at the economic side of things first: for one thing, the law of supply and demand is not magically suspended when it comes to the price of labor. Price it too high, and not the entire supply will be taken up. Rising unemployment inevitably results.
However, there is also a different way of formulating the argument: the price of labor must not exceed what the market can bear. In order to understand what this actually means, imagine just for the sake of argument a world without money. Such a world is not realistic of course, as without money prices the modern economy could not exist. However, what we want to get at is this: workers can ultimately only be paid with what is actually produced.
As Mises has pointed out, most so-called pro-labor legislation was only introduced after enough capital per worker was invested to make the payment of higher wages possible – usually, the market had already adjusted wages accordingly.
However, unskilled labor increasingly gets priced out of the market anyway, which is where the ethical argument comes in. If a worker cannot produce more than X amount of goods or services, it is not possible to pay him X+Y for his work. Under minimum wage legislation he is condemned to remain unemployed, even if he is willing to work for less.
In Switzerland, the unions have recently managed to get the demand for minimum wage legislation on one of the quarterly referendums in the country. An interesting point has been brought up by one of the opponents in the course of the debate, but first a little background information:
“Jasmin Eicher has already axed her sole full-time employee to keep afloat her shop selling cards, candles and paper in a Zurich suburb. If Switzerland approves what would be the world’s highest minimum wage, she says the only option would be to close her door.
The Swiss will vote in a national referendum May 18 on whether to create a minimum wage of 22 francs ($25) per hour, or 4,000 francs a month. While about 90 percent of workers in Switzerland already earn more than that, employers say setting Switzerland’s first national wage floor would push up salaries throughout the economy. When adjusted for currency and purchasing power, it would be the highest minimum in the world.
“We couldn’t pay it,” said Eicher, standing behind the counter in her shop in Schlieren. The employee she let go earned 3,500 francs a month. Now she’s by herself, working 10 hours a day, six days a week, and her hopes of hiring a cheaper helper would be dashed if the proposal passed.
“Of course I understand about people not earning enough, but not everyone is worth 4,000 francs. Here in Switzerland we’re already so well-off,” she said.
The chief backers of the proposal are Switzerland’s biggest trade unions, which argue that pay levels need to reflect the country’s prices – among the world’s highest.”
[…]
George Sheldon, professor of economics at the University of Basel, said the Swiss proposal would be counterproductive.
“Unemployment among the unskilled is increasing,” he said in a phone interview. “The solution to their problem can’t be to make them more expensive.”
(emphasis added)
So, 90% of all employees are already paid more than the proposed minimum wage. It turns out that virtually all the biggest companies pay salaries above what would be the world's highest minimum wage – but that is not the main problem.
Who Would Lose Out?
The point we actually wanted to get at is touched upon in the following excerpts:
“Despite being home to multinational corporations such as KitKat-candy-maker Nestle SA and drugmaker Novartis AG, Switzerland gets two-thirds of its employment from small and medium-sized enterprises.
The Association of Swiss Cleaning Companies, Allpura, opposes the minimum wage, saying it would lead to job cuts and worse working conditions. It says employees in the sector earn between 18.50 francs and 26.50 francs per hour.
Big companies including Nestle, Novartis and Swatch Group AG are against the measure too, saying it will hurt the economy.
“State intervention in the liberal economic system also goes against the market economy principles of our society that have been so successful to date,” Novartis spokesman Dermot Doherty said via e-mail.
At Nestle, the wages of all Swiss employees are above the proposed minimum, spokesman Philippe Aeschlimann said. “A higher cost of labor would however affect companies in our supply chain and our Swiss customers,” he said via e-mail.
[…]
“A minimum wage won’t stop poverty,” Economy Minister Johann Schneider-Ammann said at a press conference in Bern in February. “This new system could be counterproductive.”
According to Boris Zuercher, head of the Employment Directorate at the State Secretariat for Economic Affairs, the uniform wage would get passed on to consumers in the form of higher prices and will ultimately result in job losses among low-wage earners. Workers earning between 4,000 and 6,000 francs a month — 40 percent of the full-time workforce — will seek higher pay too, he said.
“The main criticism is that it’s an enormously high minimum wage — it would be the highest internationally,” Zuercher said, speaking by phone from Bern. “It’s not a question of Novartis or UBS not being able to afford to pay 4,000 francs, but some little company in a remote valley.”
By contrast, the Swiss Federation of Labor Unions says a minimum wage wouldn’t lead to higher unemployment because it would mostly affect domestically-oriented sectors where outsourcing isn’t possible.”
(emphasis added)
The first salient point is the fact that once this new minimum wage law is introduced, upward pressure on all wages would likely ensue. Note in this context that Switzerland is awash in newly created deposit money due to the ministrations of the SNB, which is manipulating the Swiss franc's exchange rate (a few charts on Swiss monetary inflation over recent years can be seen in our article 'How Safe is the Swiss Franc?'. The article is slightly dated, but it still serves to illustrate the point). So there is no brake on prices and wages due to a lack of money supply inflation – rather the opposite. Naturally, wages would not be the only thing rising under these circumstances – prices would be adjusted accordingly, and in the end the purchasing power of the higher wages would not be greater than before.
The second important point is the one about which enterprises would suffer the most on account of such legislation. When the union official cynically comments that 'only businesses that cannot be outsourced will be hit' (i.e., those who cannot vote with their feet and simply flee), he forgets to mention that small and medium-sized companies as a rule cannot 'outsource' their operations either, almost regardless of what they are producing. We felt reminded of something a friend of ours mentioned to us recently: “The problem of today's form of capitalism is that there are not enough capitalists:”
Indeed, an individual entrepreneur running a small business has a very difficult life already, as every new imposition is much harder to overcome for a small business than it is for a large corporation. This is also why we often find that big corporations don't resist new regulations: they reckon they are likely to keep competition from upstarts at bay. It is laudable that several big Swiss corporations are evidently not following this trend.
If Swiss voters agree to introducing a new minimum wage law, they would end up doing incalculable damage to Switzerland's entrepreneurial culture. At the moment, Switzerland is still one of the freest economies in the world. It has been extremely successful so far and its achievements would clearly be put at risk. Hopefully Switzerland's voters won't be swayed by union's arguments.
- 22953 reads
- Printer-friendly version
- Send to friend
- advertisements -


You are talking sense. Only the proper level of taxation "quite steeply" required a more precise definition of the acceptable level.
Well, one issue with your argument is that if you don't impose your lofty labor standards on the rest of the world via tariffs many businesses will simply switch to foreign sweatshop labor. Sure, we all get our cut, but the Chinese kids don't. If you really want equality, be prepared for a massive drop in your standard of living.
The crony corporatists have certainly set us up for a disaster down the road, but right now they are bribing us heavily via dollar hegemony, massive demand pull-forwards, and looting of pension funds. If you think THIS is bad, just you wait.
Well, overall price levels are about double over there so it's really more of a $12.50 minimum wage proposal which isn't all that different from what many are calling for here. Oddly enough beer is cheaper in Switzerland than in the U.S. so any negative consequences should be easier to deal with.
I know there are solid arguments against minimum wages in general, but the article seems a bit overly sensational without the cost of living context.
I call BS on this puff piece.
What the Swiss are doing - via *shock-horror* referendum - is introducing a "Social Wage".
It's pure propaganda hype to twist it all via Mises ideology into a "minimum wage" issue, it is much more profound than that and relates to the Social Credit movement and a number of other ideas to essentially by-pass the economic tyranny of the Rothschilds & Co,
Never mind ZH, just bash unions and ignore such as: http://rt.com/news/swiss-adult-minimum-wage-794/
How about some actual research via:
https://www.google.com.au/search?sourceid=navclient&hl=en-GB&ie=UTF-8&rlz=1T4GGLL_enAU399AU399&q=switzerland+social+wage
The von Mises prophets of doom were screaming when the UK introduced a minimum wage, that it would destroy its competitiveness. It has proved absolute nonsense. It is the von Mises types, calling for open borders and mass immigration, and diversity BS that took the $25 an hour jobs and shipped them to China to be done for 25 cents an hour. So when the career prospects, by such with their 'magnamity', are destroyed, then their great solution is for everyone to compete on the Chinese Communists' terms.
Fuck that.
MOAR goobermint tampering to drive inflation - because deflation is here and there's fuck all these lumps can do about it.
The more price fixing comes into play, the more the black market takes over.
These lazy greedy socialist slobs are not stupid. They know this will happen. This type of legislation wipes out small businesses over night and leaves large corporate running all.
NASTY FUCKERS!!!!!!!!!!!
Please back your barely literate rant with some evidence.
I never cease to be amazed by how many ZHers are knee-jerk reactionaries of profound ignorance about the labels they toss around.
"Rising Sun"!! More like "Setting Sun".
Back in the 19th and 20th Centuries, a lot more people knew about such ideologies as socialism - even in the US - but now too many are too brainwashed to really think about anything.
The Swiss have been doing very well over several hundred years without the advice of a Peter Tenebrarum and chances are they don't need it now
fucking cancerous Marxist scum are a gigantic malignant tumor killing this world.
Otherwise known as McDonalds, who barely pay the minimum wage.
Nobody puts a gun to your head and forces you to either work or eat there.
Here, state thugs to put a gun to the heads of people voluntaryli agreeing on some salary for some work (in this case, very poor quality work, by a kid just out of school or completely unqualified worker).
McDonalds, Walmart, et al, are the State.
Minimum wage jobs are not meant to be life sustaining ... they should be entry level jobs that help the untrained learn to showup on time and do their tasks. It is only now in our gutted globalist economy that the jobe that they would move up to have been removed to China and Co. There is no place for the minimally competent to go anymore. A"living wage" will not be a living wage for long prices will rise and the buying power will decline to the level it was before. All you are doing is putting more water in the bathtub .... everything just floats higher. The downside is that a sudden increase in Minimum wage will initially cause firings and automation will replace those positoons so they will not be available when the buying power of the new wage is the same as the old. Net result less jobs ... moar gummint dependence .... moar socialism and crony capitalism
My father was on a minimum wage, or minimal for its time, during the early 1970s. During that time he could afford a bungalow to house his family without my mother having to go out to work. You people should recognize that what may be considered common sense today has been achieved by slow boiling us lobsters for the past forty years.
I'm sorry but what I see today is a fucking Extreme Capitalistic worldwide pandemia problem.
going crazy? no! more like setting an example.
Did you know the swiss have the highest labor participation rate in the world? yeap, ... 80%. america you ask? a measly 60%.
did you know that the swiss have one of the highest external debts per capita? yeap, way above america even. yet even though america's debt has inflated harder than if it had 6 prostitutes on it, the swiss debt is in check, inflating at a level that any american pharmaceutical company would be lobbying to prescribe viagra for-in this case thats a good thing.
the reason why the swiss debt is in check is because of the labor participation rate. in america there are far too many leeches on the system, however thats not the matter in switzerland. so now, when the swiss raise their minimum wage, what do you think is going to happen to their labor participation rate? its obviously going to increase.
if uncle sam raised the minimum wage above what could be leeched, then you'd see less leeches and more contributors.
'its obviously going to increase.'
What?
Who's going to pay this much for a cleaner, or a fresh out of school kid? They'll have to work for free... ekhm I mean "do an internship" before getting or not getting a job later. These 10% of jobs that are now paying less will simply shut down, or shrink dramatically.
This country won't crash and burn form one bad law, but it's going to be severe detriment.
A $25 an hour minimum wage is actually not such a bad idea if you want to have an electorate which doesn´t vote for parties that want to increase taxes for those who are well-off or rich.
Historically, it has been easier for extreme leftist parties to get substantial support among the public at large in poor countries in Latin America, for instance, than in Switzerland. Upper middle-class and upper-class people in Switzerland probably got a better understanding of that problem than in most other countries although it is the trade unions that have called for this referendum.
I agree that an economy with a $25 an hour minimum wage can not absorb unskilled labour to the same extent as for instance an economy with a $7.25 minimum wage. If you got a $25 minimum wage you can´t increase the labour supply without increasing the unemployment figures. Therefore, a society with a $25 minimum wage will have a strong incentive to eliminate the excessive supply of labour if you want to keep taxes low or don´t want starve people to death.
Of course there will fewer maids in Switzerland with a $25 minimum wage. People will not hire people for cleaning their houses or mowing their lawns. Instead they will buy food that can be prepared in microwave owens and buy robotic lawnmowers and vacuum cleaners. The result will be improved productivity and a reduced for a risk creating an electorate that will vote for increased taxes for affluent and rich people. Replacing manual labour with machines has also been the general method for improving the standard of living for the general public ever since the introduction of the steam engine in the 18th century.
I guess that people outside Switzerland are less inclined to realize the potential risk to affluent and rich people which a large share of poor people among the constituents actually means. In countries where even poor people vote for conservative parties, such as the US, there are are also less incentives for the upper classes to limit the number of the lower class people. But that doesn´t mean that a poor electorate may cause problems for them in the future, provided that the US is still a democracy then.
My assessment is that those who control the American government, the Congress, the big media, the most important super pacs and the most important lobby organizations know what they are doing. They think that their power will not be affected by an increasing number of poor people. If somebody will pay a price for an increased number of poor people it will be other people. And I suspect that they know what they are doing. If somebody will pay a price it will be other rich and affluent people. Or perhaps they think that the price associated with changing the composition of the electorate will be worth it. Also keep in mind that power associated with non-profit legal entities may not be affected legislation that targets affluent people. In some cases political turmoil, such as in Russia in 1917, can also decades later produce a very favourable outcome for a group of people that has been able to retain a significant influence over the secret police ever since the revolution took place.
The reason why an increased number of poor people is considered as a greater element of risk in Switzerland is probably the way the Swiss democracy works. It is not just a very limited portion of the upper-middle classes and the upper classes in Switzerland that exerts some political influence. You got the same tendency in Switzerland as in the US, but it is less pronounced. The perceived potential threat from a growing group of poor voters that could be more inclined to vote for socialist politicians like Francois Hollande or Francois Mitterand or even communist parties is probably more obvious in Switzerland since communist parties could get about 20 % of the votes in general elections in neighbouring Italy and France in the 1970s.
However, I still suspect that the $25 an hour minimum wage proposition will not be supported by a majority of the Swiss voters. But I think that the support for this proposition will be stronger in Switzerland than it would have been in almost every, or every, other country in the world.
How are you eliminating poor electorate by creating unemployment?
If this guys work is worth 20$/hr and minimum wage is 25$/hr = he's now unemployed. Those worth more, aready are earning more (after all there is competition in labor market! especially in Switzerland with 2/3 gdp in medium and small companies).
If 20 bucks per hour isn't going to feed, clothe and house him then all he's going to do is work his guts out while starving to death anyway. You recognize the need to spend the necessary money for fuel, oil and tyres for your car. Why short-change the worker? In times of high unemployment, why would you bother hiring the guy who is only worth 20 bucks per hour? Reading CVs too hard for you? Who is going to provide more jobs for the rest of the community - the $800 per week worker or the $1000 per week worker?
Peterus:
My comments:
Let me quote myself.
“Therefore, a society with a $25 minimum wage will have a strong incentive to eliminate the excessive supply of labour if you want to keep taxes low [...].”
Didn´t you read that? Or is the problem that you just can´t get that into your head? In a market economy there is something called supply and demand. Without excessive supply of labour, high minimum wages does not result in unemployment. In 1968, the unemployment in the US was about half compared to current figures despite a minimum wage that was about 50 % higher adjusted for inflation.
Also keep in mind what the article said:
“So, 90% of all employees are already paid more than the proposed minimum wage.”
According to the article it also seems as if some people in the cleaning sector make more than $25 an hour. According to The Association of Swiss Cleaning Companies, Allpura, employees in the sector earn between 18.50 francs and 26.50 francs per hour, i. e. $21-$30 an hour. So $25 an hour in Switzerland would not be such a dramatic change.
Adjusted for purchasing power, I reckon that $25 an hour equals about $15-$20 an hour in the US.
My impression is that current wages for unskilled labour in Switzerland reduce the risk for significant support for leftist parties that want to increase taxes for those who are well-off. High wages for unskilled labour means that there is less risk for drastically increased taxes in Switzerland. Switzerland has for decades had drastically lower taxes than other European countries.
$100/hr would make everyone more wealthy.
Pretty cool that the people actually can decide on anything in that country.
Still, would be much better if they didn't impose this (idiocy) country-wise, just on some cantons. Than if some cantons passed it, we could have a good view of how it goes with a counterexamples so close to see. Now if they vote it in, it will be hard to see the detrimental effects on this still pretty well run country. Comparion will be imposible. Statist will just say that minimum wage is awesome and all the downfall was because of troubles in UE and inhibited trade or whetever else.
In a closed economy, the minimum wage is almost irrelevant. The minimum wage is for those with no leverage. Everyone else will demand a proportionate pay rise to compensate - one-off inflation but debt is diluted ( so bankers will want to increase interest rates on all the old loans ). In fact, some members of TPTB may actually wish for a higher minimum wage purely to bury the effect of their pathetic lending practices over the last two decades.
The real trouble starts when you trade with an external country that still pays its people two dollars per day. At that point you have to ask your self, what end result do you desire? The external country takes all your jobs, eventually inflates and one day they earn your wages while your country has no jobs, no manufacturing infrastructure and no know-how? Or would you prefer local workers to be earnin $1.99 per day? And if you want your locals earning $1.99 per day, where are they going to live? In $500 grand houses? How? You want your locals to compete with cheap foreigners, you have to crash debt AND the price of local real estate. And all your real estate tycoons will suddenly be renting out houses for 50 cents per week instead of $400 per week. Decisions, decisions ...
Switzerland is no longer nuetral btw. The IRS knows it...The NWO knows it.
While it IS a dumb referendum, the demand is not far-fetched. If you try to survive with 4k CHF a month here, you won't get very far (ca. 15% taxes, ~250-400 CHF MANDITORY health care costs/month, average rent for a 2 bedroom aprtmnt in a city < 1-1.5 k, and quite high food costs (at least double to neighouring F or D)... etc etc. Try to feed a small family, and you're in real trouble - you'll either need government assistence of some sort, financial help form wealthy parents, or have a working partner to make it through the month. THAT is also a reality in this expensive, high price country; not for the 1, 10 or 30%, but for the bottom ~40%.
Minimum wage is just a ploy to pretend to the masses that there is some help for them.
In the UK there is a minimum wage but employers get round it, I saw on a forum that a person worked for many hours a day but they didn't pay for the travelling costs between jobs which was necessary part of it. End result they got the equivalent of less than £1/hour when minimum wage is £6.31!!!
Add in zero hour contracts where a debt slave is obliged to work ONLY for them and be available at short notice, you truly have slaves!
Then make the form of work itself a choice independent of accepting work - for the same job. That would play the incentives against circumvention by the employer.
Zero-hour contracts and other types of bad-faith work offers by employers would drop like a rock, given that they rely on desperation.
Interesting allegory... what this will do is reverse diversity in the workforce and maybe return SUZ to an entirely homogeneous society. Will a hiring manager rather give a now high paying job to someone that looks like him/her, or would he/she rather give it to a person from a different tribe? Some groups will take this new law in the shorts.
I would prefer a MAXIMUM WAGE.
The current system is wildly distorted towards manipulation and cronyism - totally directed at asset prices and supporting the status quo wealthy. Therefore, there is no moral high ground to spout Austrian economists, WalMart bashers, etc. to deny minimum wage earners the same right to suck on the teat of crony Govt.
This could work out well for the US, if Swiss companies react by building plants in low-cost regions, no wait, illegals would get those jobs, too. Thanks, Congress.
I hope it works out well for them. If it doesn't, we can copy them!
I understand the arguments against "minimum wage" and they are very logical and powerful.
But one very important issue that many "abolish min wage" people decline to debate is: when there is no minimum wage, wages drift down to levels which the market can bear. This is fine for employers and wage levels cease to be a drag on employment. However, very often this low level is not enough for many workers to live on, skilled or not.
What is society to do? Why yes, governments then introduce welfare systems which, in one way or another, subsidise the worker's income so s/he can live at a pre-defined minimum standard decided by the State. This can be seen as "indirect corporate welfare" paid for by the taxpayer.
This specific topic has been debated weeks/months ago in other articles, without resolution.
As I try to explain many times, the free market minimum wage is a bowl of rice per day and a bed on the factory floor. Many people don't believe me because they haven't seen it in their backyard but many years ago my boss of the time bought a new "productivity enhancing" machine which he had seen demonstrated in a foreign country in a factory full of illegal immigrants that ...
What I try to explain - the best you can hope for - is that in order to capture market share, one capitalist will underpay his workers in order to pass on the savings to his customers. Now what does the other capitalist do? HE DECLARES THAT HIS WORKERS ARE NOW TOO EXPENSIVE AND ARE NO LONGER WORTH THE HIGHER WAGES THAT THEY WERE EARNING BEFORE, EVEN THOUGH THEY PRODUCE THE SAME AMOUNT AS BEFORE. And so the wages spiral down to zero and at every step the capitalists insist there is no better way - "I can only sell this product for 5, 4, 3, 2, 1 dollar and therefore the workers are only worth 50, 40, 30, 20, 10 dollars..." The best my opponents can say in return is that if the other company pays higher wages then the good workers will quit and work for the company paying the better wages. Yeah, how well does that work in the real world? It does happen, but when was the last time you quit your job? Think again about minimum wage work in a high unemployment environment. What happens when both companies use machinery that allows one man do the job of ten? Can the better workers make the machine let one man do the job of 20?
And when a company lowers wages and passes on the savings to its customers, do you really win? I've already explained that here somewhere while referencing, of all things, Peter Schiff's "15 for 15" campaign where he asserts that a $15 per hour minimum wage for Walmart workers (effectively 100% pay rise) could be paid for with a 15% increase in Walmart prices. Or said in reverse, your Walmart prices are 15% cheaper due to Walmart minimum wage workers copping a 50% pay cut. Who shops at Walmart? Minimum wage workers. Would you really be upset about a 15% increase in costs in your business if your customers' wages doubled?
When I was on minimum wages, my expenses were $20 per week less than my earnings. For a $20 pay cut, I had NO savings and NO discretionary spending. For an extra $20 per week ( $40 "profit" instead of $20 "profit" ), my discretionary spending power DOUBLED although it would cost my employer an extra 7%. Is that really going to send companies bankrupt? I don't see it. "Oh but prices are more expensive so people buy less." Excuse me, but we're talking about increasing the minimum wage. The wages increase proportionately more than the amount by which the prices increase. People are still richer.
So why not just pay everyone $1000 per hour? Why not? My ancestors paid off a house in 25 years with one wage. Now people pay off a house in 40 years with two wages. What happened to all our technological innovation? Everything else got cheaper, why not houses? Who says we can't survive on a ten hour working week? What happened to all that extra productivity due to technology gains? You won't know if you don't try. I have no doubt that at a certain point diminishing returns will set in and you won't be able to keep increasing the minimum wage forever, but who says that point is where the minimum wage is now? The price of oil? Yes, it could well be that any more consumption will result in too much demand for oil and upset the whole apple cart. Well, in that case show us the evidence and be honest about it. Then perhaps we can set about working less and consuming less instead of working our guts out and getting absolutely fuck all in return.
"As I try to explain many times, the free market minimum wage is a bowl of rice per day and a bed on the factory floor."
The free market minimum wage is whatever people will agree to work for to get their foot in the door. Your free market wage is just as artificial as a government mandated minimum wage.
"Think again about minimum wage work in a high unemployment environment."
Think about the law of supply and demand. Why is the unemployment rate high in the first place? Government intervention in the market place. In the deep 1921 recession, the government did not intervene and the economy rebounded sharply after a sharp drop. Today, we have the government suppressing the rebound, by not allowing the excesses of the boom to be eliminated.
Re "The free market minimum wage is whatever people will agree to work for to get their foot in the door. " :
20 - something years ago I was 200th in line with 300 other people applying for one of twelve minimum wage jobs. What is the free-market wage? How hungry are you? Where is the opt-out alternative? Perhaps with free, fertile land and water, people would have the option to opt-out and, maybe, they would have some kind of leverage in wage negotiations. Perhaps the real problem is that so few people know enough about capital acquisition and loans.
But the problem you guys have is that you believe the LIE of the free-will negotiated price of labour. Take away the threat of starvation and we might have a place to start talks.
"So why not just pay everyone $1000 per hour? Why not? My ancestors paid off a house in 25 years with one wage."
If everyone made $1,000 an hour, what would a gallon of gasoline cost? In Zimbabwe they have a billion dollar bill in local currency. The people are still poor.
Most households are not one wage earner, now. Household income is higher with two working, so home prices have risen to match that of two wage earner households.
In 1963 the minimum wage was 1.35. Now it is 7.25, Several times higher.
If the FED was not destroying the value of the money, the minimum wage would still be 1.35. A candy bar would be a nickel. A coke for a dime.
""Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea.""
Oh yes there is Dumb-Ass It's called: Keeping Up With Inflation!
Give me "0" inflation and "0" deflation, and I'll give you "0" minimum wage increase! Is it our fault inflation shot up 500% since Tricky Nixon unpegged USD from gold? But you have a HUUUGE problem with minimum wage keeping up with it, right?
Man ZeroHedge is REALLY busting out the neo-feudalist, neo-liberal, neo-conservative articles this Good Friday! Guess we have to join that Jesus guy in getting nailed to the cross or something.
Minimum wage keeping up with what? "0"
Jesus was a dyed in the wool socialist, he was an illegal immigrant, he was brown skinned and his father deserted the boy's mother before they got married, so that little J could be brought up in a single parent home. Plus he had a mexican name. No wonder conservatives identify with him so closely (sic).
Perhaps every last Swiss citizen is now needed to work at the refineries producing 4 nine gold for China?
Alasdair Macleod's Swiss refinery sources states that Switzerland is sending China 20 metric tons a day of fresh kilo gold bars!
http://www.silverdoctors.com/alasdair-macleod-loss-of-confidence-in-the-...
Back in 93(?) I was listening to npr and they were talking about a proposed hike in the minimum wage or a buck or so. The CEOs from 500 of the top public companies had lobbyed the government to block it, stating that their companies would be devastated by the extra cost. That year those same CEOs accepted an average $1000 per hour pay raise. Which would obviously have easily paid for all of the minimum wage hikes and more. More people with more money in their pockets equates to an economy where more money is spent. By giving it instead to the execs the impact on the economy was essentially zero. If the swiss would instead vote as to whether the minimum wage hike should come directly from the pockets of the execs there would be no negatives, only positives to that move.
Personally I think it is an interesting experiment. Either it will set a precedent in other countries or it will have a small failure rate. 90% already make over this wage. So it will effect only about 10% of present workers of which the 90% can likely absorb without any serious consequences.
Capitalism is allowed to operate freely here WITHOUT big government that is so prevelent in most other western world countries. As Tyler was mentioning earlier, he doesn't know who the swiss prime minister is and neither do I without googling it. That is the role government should be in most countries. However it is not. The swiss do not have a large military budget, they don't have a nanny state, they don't have all these unfunded obligations and they are no where near as corrupt as other western governments. No one hinges on the swiss central banks statements even though they have all that capital there and the government makes it a point to not interfere.
The swiss are very smart people. They are multi lingual and work hard with all the countries around them. They encourage low taxes and there are no free loaders. They have no agenda other than to make their own country a great place to live. It seems to work doesn't it.
You are way too smart for zh, mister
Edit- if i may ask a question ma, do you see a looming dollar depreciation over the possibility of a russia-china tag team with oil sales/purchases?
"90% already make over this wage. So it will effect only about 10% of present workers of which the 90% can likely absorb without any serious consequences."
Nothing happens in a vacuum.
Obama created 442 tax initiatives. Each on their own "can likely absorb without any serious consequences."
Once the ball starts rolling, it doesn't stop. There will be consequences and they will be more serious that people want to imagine. Someone will be harmed, then the claim will be that problem has to be fixed for those people. Then fixing that problem will cause another problem that has to be fixed.
As Bill Clinton famously said, "we need a benefit." The list of needed benefits is endless, once the ball starts rolling in that direction.
Smart move.
It's called expendable money, ensuring money circulates within the ENTIRE popuplace which is why we have "money", the symbol of all symbols.
But I quess most Americans can't wrap their heads around this. If you look at India, Bangldesh, Pakistan etc. where slave labor isn't doing so great for the greater "economy" much less for the entire population who for the most part are treading water on a buck or so a day.
SO trying the opposite, trying something differend yes, why not...?
Raising minumum wage has been tried and tried again and again. Yet we still have unemployed poor. Minimum wage does one thing and that is it outlaws work for those who cannot make minimum wage or above. You cannot have money circulatin if you do not have any money.
you do know that when people make more money...they tend to spend that money in stores? you know that creates cashflow to small businesses, and more jobs?
you do know that when people make more money...they tend to spend that money in stores? you know that creates cashflow to small businesses, and more jobs?
Raising min wage does not increase the amount of money in circulation or increase the velocity of money. There is no causation or even correlation for that matter.
Not only will this reduce the number of people companies are willing to employ at the entry level, it will also make it more difficult for companies to pay appropriately higher wages for higher skilled jobs and employ as many of higher skilled employees, too.
This may be an effort to compress all wages to a single wage level.
I've already explained this twice in this thread. The minimum wage means pay rises also go to your customers. How do you go broke with richer customers?
"...Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea..."
wrong asshole - there are economic, political, and ethical reasons to support it, not the least of which is that your bankster friends are ripping off with their economic rents the middle and lower classes .
you, pater, are a total cunt, and fuel the desire of some, for an eternal burning hell to house scumbags like you. how much more income inequality until you ziocon freaks are finally satisfied? i know the answer and it is total slavery.
It's not a wage problem. It's a tax inflation and consumer 'necessities' problem.
In the 50's, a family of 4 could live on an average single earners wages, including a home and car payments. Eventually, they may save enough for a television and enter lower middle class nirvana.
Now, let us increase taxes, Fed, state and local, excise, gas, property, etc. and combine the expenditure of what are now considered necessities like cable /sat. tv, internet connections, cell phone costs, air conditioning (yes, it's not free) vastly increased insurance driven medical care and huge college tuition costs of 60 years later and we can see the technological and comfort gains are having a difficult time surviving on wages from a shrinking employment pool and debt from an artificially priced credit expansion.
Outsourcing manufacturing combined with higher degree inflation is setting a ceiling to employment prospects of the uninitiated and the dubious lettered alike.
Most of the loss of purchasing power can be laid at the doorstep of gov./Fed policy but a good portion must allotted to consumers themselves for diverting productive capital into convenience.
Anyone have a 10 year old with a cellphone bill?
The Golden Age of America lasting from 1946 to 1973 was an historical abberation, hardly the norm...
Did you think that the world would never rebuild post WWII?
"By contrast, the Swiss Federation of Labor Unions says a minimum wage wouldn’t lead to higher unemployment because it would mostly affect domestically-oriented sectors where outsourcing isn’t possible.”
The lack of an ability to outsource, won't stop a business from laying people off.
Minimum wage is a law that makes work illegal. If you cannot make at or above minimum wage you are outlawed from working.
No, it disincentivizes slavery and other bad work practices.
Sorry the 13th amendment abolished slavery. Learn your history. Please explain how minimum wage makes it easier for people to work.
How much would you like your customers to earn? Who pays your customers?
This is a perfect example of the right ultra conservative mindset. Typical of ZH for giving only one side of the story. $25 dollars over in Swissland is about like $12 here in the states. If we had a $12-15 dollar minimum wage perhaps some people would find it useful to work. But then again, maybe walmart would have to take a profits cut, and jesus christ the stock price might fall from 75 to 58!
I read ZH for the news which doesnt get reported on CNBC, but I can assure you, that every body here that has a knee jerk reaction towards socialist countries like France would have more money in their pockets as a french citizen.
Some of you inbred rural gun nuts should get out of the national forest some time
Move to France then.
dont get me wrong, France has a ton of problems. But the US has turned into one of the worst places to live in the developed world. And people on ZH are even more knowledgeable then most of the sheep in this world are still calling Obama a socialist!?? this guy is far from a socialist, his healthcare is a insurance companies wet dream to robs us even more....and people are calling him a socialist. Lol I knew u would be voting me down :) hope ur insurance premium doubled on you this year