Vast Majority Of Swiss Reject $25 Minimum Wage In National Referendum

Tyler Durden's picture

If you want a country that respects free markets, believes in listening to the voice of the majority, and is against meddling in global affairs under the guise of "humanitarian, liberating, and democracy-spreading" intervention, move to Switzerland.

If you want a country controlled by a few academic central-planners with no real world experience, in which the executive usurps power issuing one executive order after another with zero checks and balances, and which will incite a global war if it must with the help of doctored YouTube clips in order to achieve its global national interest, then move... anywhere else.

Six months ago, it was this same Switzerland that, contrary to the prerogatives of the pervasive "fairness doctrine" taking the new socialist world by storm, rejected imposing limits on executive pay. Then mere hours ago, in a move that would give president Obama wealth redistribution nightmares for months, a whopping 77% of Swiss voters rejected an initiative for a national minimum wage of 22 francs, or just under $25, per hour, according to projection by Swiss television SRF. And confirming that when it comes to anti-socialism, Switzerland may well be the last bastion, not a single canton supported the measure.

How dare Switzerland not pretend supply and demand doesn't matter and one can circumvent the laws of common sense and enforce employment and wages by diktat? Simple: Government ministers have fought against the measure and insisted it will damage the economy, running small companies out of business and making it harder for young people to find employment. Perhaps it is time for these same minister to give the US government a few lessons.

"A minimum wage won’t stop poverty", Economic Minister Johann Schneider-Ammann told The Christian Science Monitor. “This system would be counterproductive.”

Switzerland currently has no minimum wage, but the median hourly wage is about 33 francs ($37) an hour.

AP has more from on location:

Initial results suggest that the Swiss have rejected a referendum proposal to create the world's highest minimum wage, an idea that government and business leaders criticized as likely to drive Switzerland's high costs even higher.


Swiss TV reported Sunday that 77% were rejecting the proposal to create a minimum wage of 22 Swiss francs ($24.70) per hour, based on unofficial vote tallies. Official results were expected later Sunday.


The proposal would have eclipsed the existing highest minimum wages in force elsewhere in Europe. Trade unions backed it as a way of fighting poverty in a country that, by some measures, features the world's highest prices and most expensive cities. But opinion polls indicated that most voters sided with government and business leaders, who argued it would cost jobs and erode economic competitiveness.

AP also adds the following tart pearl: "Referendums are a regular feature of democracy in Switzerland, which features a weak central government and strong state governments."

Meanwhile elsewhere, such as the Eurozone for example, merely hinting at a referendum is enough to get the abovementioned central-planners blow up your bond market and get your thrown out if not facing a firing squad (see G-Pap and Berlusconi).

So congratulations Switzerland for being one of the last bastions of democracy and having your voice heard, even if we, for one, wholeheartedly agree with your choice that free markets trump "fairness" and wealth redistribution every time.

* * *

For those wondering where we stand on this topic, here are excerpt from what we said in April in "Are The Swiss Going Crazy? $25 Minimum Wage Referendum In May."

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.


* * *


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.

They weren't.

... Meanwhile, elsewhere:

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Headbanger's picture

No surprise here.

The Swiss don't want a flood of immigrant labor into their country that such a high minimum wage would cause.


SwissCake's picture

I had bet on a 60/40, this result is a great success. Sweet.

Jack's Digestible Ideas's picture

Why Not?:


That reasoning works so well with American policy, how can those barbarians not understand?



Vampyroteuthis infernalis's picture

The Swiss have a long tradition of true democracy, NOT a puppet show like many other places. Swiss will conitnue to prosper while others will fail.

Slave's picture

The left sure was going bananas over the Swiss getting a $25/hour minimum wage this that the results are in, I can't find anybody in the MSM reporting on this.

SafelyGraze's picture

"when it comes to anti-socialism, Switzerland may well be the last bastion"

.. and that is why we must invade it

john skerry 

Ahmeexnal's picture

Swiss voters have issued a loud and clear statement to the socialist elites who want to enslave all humanity (while leaving a very few at the top):



socialism explained:  99.99% proletariat serfs,  0.01% politburo (political oligarchy and transnational megacorporations)

Chief Wonder Bread's picture

Me first thought upon reading that headline was, 'Gee, they must have an educational system that works!'

TahoeBilly2012's picture

Hilary will run on $100 per hour minimum wage, free bunnies for kids and more bombs for everyone else. She can show those greedy Swiss what a "sharing" America is all about. Share this bitches, boom!

James_Cole's picture

So congratulations Switzerland for being one of the last bastions of democracy and having your voice heard, even if we, for one, wholeheartedly agree with your choice that free markets trump "fairness" and wealth redistribution every time.

Switzerland is basically the exact opposite of a libertarian fantasy-land and a true democracy - yes. And xenophobic? Check. Probably a little more justified than most places though. 

Manthong's picture

It’s just a shame that they are not as adamant about rejecting their former tradition of neutrality (in banking).

SwissCake's picture

What do you want us to do, big markets threaten to retaliate economically and we have no allies left. Those markets are vital for our exports, they have all the leverage in the world. There was a time when Luxembourg and Austria had converging interests with us. On the substance, it is certainly a shame that those governments use force on the international stage to mask what are inefficiencies at home. This is a losing stance in the long run.

I am all about banking secrecy but let's save what we still can; banking secrecy domestically such that our government remains weak in regards us.

AvoidingTaxation's picture

De minimis. I would extend Bank Secrecy for eveybody, it is an important asylum aspect to have our own wealth (Gold/Work) stored in a secure place out of reach from predatory governments that think we are indentured slaves.

boogerbently's picture

That is why they want to "legislate it", here, NOT vote on it.

CrashisOptimistic's picture

I see.

Now we're supposed to believe the elites will count votes fairly.

jefferson32's picture

Unfortunately our central bank has become just as keynesian as the BoE or the Fed. The people were manipulated into accepting (in 2001) a modification of the constitution to remove the gold clause, following adhesion (in 1992) to the IMF (whose charter explicitely prohibits using gold to back one's money supply).

TBT or not TBT's picture

What constitutional workaround happened in 2001?

jefferson32's picture

There was a referendum to remove that clause (and sell 1/3 of national gold holdings). People were manipulated in believing gold is an anachronistic barbarous relic. Now there is a referendum initiative to reintroduce it.

Stackers's picture

Also a country where the government issues military grade assualt weapons to it's citizens

CPL's picture

Yes, but conscription is mandatory unlike most nations in Europe because the Swiss are firm believers that a person isn't a citizen until they contribute part of their lives to the common welfare of their country.  It's not a big place, it produces very little...except people.  So when you are a country as over populated as Switzerland if measuring the resource requirements contrary to it's output (which is banking...aka nothing of merit).  So instead you use the only resource anyone that can offer to sell from a government standpoint.

Warm bodies.  All to be deployed in numerous long term mercenary arrangements with other european states for hundreds of years.  Just think of it as a banking and pimping operation disguised as a country, because that's all it's ever been and all that government is built to accomodate. 

Kind of sad that people are proud of that and it comes with a terrible price because of it.


Game on...just a reminder there's no uhaul behind the hearse in those conditions.  Ever.

Stackers's picture

I would not mind 2 year mandatory conscription for a true national DEFENSE force like the Swiss have. The Swiss hired out as mercs in the middle ages, I'm not aware of them doing so in the last 200 years or so, besides the token Vatacan force that is the only one left since 1859 according to wiki. We are talking about recent history here.


You could easily make it where you could opt out, but then have opt out your voting privielges and access to social welfare programs for life.

rubiconsolutions's picture

"You could easily make it where you could opt out, but then have opt out your voting privielges and access to social welfare programs for life."

Perfect! Sign me up. I haven't voted since 1992 anyway. And as long as I can opt out of compulsory taxation to fund social welfare programs like Medicare, Social Security et al I'd be glad to opt out of receiving those benefits.

Conscription is slavery. Period. You can frame it anyway you want but mandatory service to an oligarchy and its military industrial complex to line their pockets while serving as cannon fodder is just another form of slavery. Screw the Swiss. Israel too and any other country that forces people to serve its military.

Cathartes Aura's picture

c'mon you downvoters, who guards the Vatican?

Once used to guard prominent Royal Courts, mercenaries hailing from Switzerland had a notorious reputation for fierce loyalty, optimal combating skills and unequalled discipline. While many Swiss Guards regiments existed in Europe since the mid-15th century, the Papal Order is the only one still in existence.

that's just a teaser link, I'm sure others here can contribute some red meat on this subject. . .

CheapBastard's picture

Headbanger: "The Swiss don't want a flood of immigrant labor into their country...."


Been to Geneva lately?

SwissCake's picture

Agreed, cosmopolitan shit over there (although not as acute as the Brussels shit).

I am not talking about the US/EU decent worker at Cargill and co, rather the cheap Arab/African welfare recipient.


Most of it due to our fucking generous asylum policy, and our former immigration policy whereby those folks flooded in the country in the 90's. Sad.

jefferson32's picture

Few Americans realize Switzerland and the US are sister republics. Our 1848 constitution was modeled against the US constitution. Only we didn't have a civil war, and thus the central government didn't grow as fast (but has been growing nevertheless, unfortunately). André de Gallatin, the US first treasury secretary, a personal friend of Jefferson, who helped write the US constitution, was from Geneva.

jefferson32's picture

There's something else: although democracy is no panacea, still, direct democracy in Switzerland forces people to reach consensus; when you have to reach a consensus about a proposed legislative disposition, ideologies cancel out, and only the perceived (and objective) effectiveness of the law/policy remains. Hence it is still a (relatively) classical liberal country.

PS: did you know Switzerland is the country with the most firearms per inhabitant? More than Yemen. More than Afghanistan. More than the USA.

jefferson32's picture

(oh, and the lowest crime rate in the world)

EDIT: erratum first post, it is Albert Gallatin.

VegasBob's picture

Also, Albert Gallatin was the 4th Secretary of the Treasury.  Alexander Hamilton was the 1st Secretary of the Treasury.

SwissCake's picture

Indeed, it seems the Holder's and the Obama's of the world don't give a shit.

"No such thing as too big to jail." - Sure, piece of shit, making domestic politics at the expense of CH banks. Won't even slide on the FATCA folder.

CheapBastard's picture

Another town that's nice in that part of the world is Lucca in Italy. Friendly people and it has not attracted the crowds of immigrants (Arabs/N Africans) some other places have. Sardinia (outside of their main city) is also nice in the smaller towns (like Norbello). I get to visit my sister when she works in these places as an archeologist. She said NEVER go near the larger EU cities where crime is out of sight now.  Even Perugia is a mess I read.

Her pay stinks but she leads a wonderful colorful life and travel all the time.

TheAnswerIs42's picture

Have been to Sardinia, the people out in the country are extremely nice. The place is awesome.

And then I think most people ARE extremely nice, especially if they have honest work for a living...

The thing with cities is, you get a large difference between the haves and have not.

There are way too many who think their shit does not smell.

That is not so apparent outside of the cities, no matter what country you live in.


Lynn Trainor's picture

I remember when Putin told Obama that socialism doesn't work.  How blind we are and how low we have sunk.

PontifexMaximus's picture

Geneva was voting today against financing parking lots on French territory (sic!!!), in order to give relieve to geneva roads, jammed by french commuters flooding into Geneva every day.

Urban Redneck's picture

Until they build more bridges to alleviate the bottleneck at pont du Mont Blanc... traffic will ALWAYS suck in Geneve.

Any other solution is bullshit.

SwissCake's picture

Openly assumed pro-EU authorities (state councillors). Enough of a fact to caracterize them - they're about cross-border cooperation.

Maryjane's picture

So when you are a country as over populated as Switzerland if measuring the resource requirements contrary to it's output (which is banking...aka nothing of merit).


This is by far the dumbest comment I've ever read on ZH.....

SwissCake's picture


Interactive map with results per canton, if interested.

Note Geneva; one of the most progressive as usual (French touch). I am considering moving to Zug or Schwytz. :)

CheapBastard's picture

My sister used to live in Locarno...nice place with an Swiss-italian bent on the lake ... but I wonder what it's like now?


Anyone vist there recently?

SwissCake's picture

Not lately unfortunately. Ticino is abs. beautiful (Lugano (L)).

The Ticinesi are really fed up with immigration though (flooded by the Lombardy).

jefferson32's picture

The Free State Project Europe (a copycat of the american Free State project), has chosen the canton of Ticino for people to relocate to!! Beautiful region indeed. Ticino is likely the canton that will secede first, if the SNB continues attacking the Swiss Franc, and whenever shit hits the fan. I live in the Sopraceneri, and I've never met people with such a sovereign spirit. They're unlikely to accept Bern's diktat for much longer. There's even a valley around here that has refused electricity (to safeguard the landscape), fought the federal government in court, and won.

SwissCake's picture

Cheers from Montreux, mate.

I can only understand your canton's frustration. Big fan of your right wing spirit. If you secede you may have what it takes to create sort of a Lichtenstein-bis with real immigration quotas.

Fucking black list from the Italian government by the way.

FreedomGuy's picture

I have a brother who is a chef is Switzerland. He loves it and is never coming back to the USA. He is coming up against the long arm of the  US tax laws in Switzerland. The United States unlike even the most socialist of Europeans follows you everywhere. I suggested that he find a way to renounce citizenship for his kids if not himself. The IRS will clearly remind you that you are in fact, property of the U.S. government...or subjects of the State.

Having said that, Switzerland is not a free market paradise. It is insanely expensive there. If you make $100k, US you are lower middle class. They have lots of protectionism for goods and services. It is also the playground for the richest people in the entire world. The lifestyle is a throwback to long traditons. Most towns are still small with separate local butchers, grocers, drug store, etc. They have some far more rational systems when they do collectivism. Their state retirement system has two parts. One part is like our Social Security system and is a flat contribution and redistributed. The larger part is a part invested and specifically owned by you. It is mandatory but you have a property right and it is quite good. Perhaps there are some Swiss citizens who will comment further.

While I am libertarian and opposed to all statism and collectivism I do recognize that many European countries much better and more practical models than what we attempt here in the "free" USA. However, they are also managing land areas and populations that are only the size of a single state in the USA.

Maryjane's picture

I am considering moving to Zug or Schwytz. :)


You won't gain anything by moving to Zug or Schwytz.

Atomizer's picture

In Obama's world, any new immigrant will create high crimes, develop new opportunities to build bridges, highways, and have six union members dig a hole, while twelve fill it.


At the end of the day, new slave taxes to cover loss on ponzi scheme pay-outs.

Bloody Muppet's picture

"The Swiss don't want a flood of immigrant labor into their country"


True, you can't go there without a contract to work. And, usually, once your contract is up your visa is too. They only have qualified immigrants there, rather than anyone with a pulse. 

Fuh Querada's picture

"qualified immigrants" are not what I have seen lounging around on the sidewalks in Swiss towns.

SwissCake's picture

True in the French part. Cosmopolitan in a pejorative way.

However keep in mind that those welfare recipients are de facto the most visible. Plenty of foreign qualified folks working while those pieces of shit touch their pension and enjoy asylum by hanging by the lake. In other words, non-representative sample.

Maryjane's picture

Useless brown parasites  everywhere now! It's a nightmare!