The government has come out with a proposal by trade unions to introduce minimum salary standards across the country. Proponents have collected enough signatures to force a nationwide ballot on the issue.
Economics Minister Johann Schneider-Ammann said on Wednesday the cabinet agreed with supporters of the initiative that all jobs should to pay workers a decent living wage. However, he said the proposal would undermine a tried and tested way of setting salary levels.
The proposed minimum wage of SFr22 ($23.8) per hour on a nationwide basis would harm Switzerland’s competitive edge as it is among the highest anywhere, Schneider-Amman argued.
In fact, according to the State Secretariat for Economic Affairs, it would be the highest minimum wage among all member countries of the Organisation for Economic Co-operation and Development (OECD).
“Our prosperity is largely based on the institutionalised cooperation between representatives of employers and labour. Flexibility in wage setting is crucial for industrial relations,” he told a news conference.
Schneider-Ammann said salaries had to adapt to productivity levels and market mechanisms largely without interference by the state.
The salary gap between top earners and low income employees is smaller in Switzerland than in many other countries, he asserted.
Referring to Switzerland’s comparatively low unemployment figures – currently 3.3 per cent – Schneider-Ammann praised the system which leaves salary levels up to individual sectors or companies as the “trump card of the Swiss economy”.
Jobs
He warned of possible job losses in sectors such as tourism and hospitality if the present system was made inflexible.
Certain regions, particularly those bordering other countries, risked being hit hard, he warned.
Schneider-Ammann said the system of collective labour contracts and additional measures was the one best suited to prevent unfair competition by companies trying to undercut agreed salary levels.
“Collective labour contracts and institutionalised cooperation between employers and employees are crucial for low and medium salaries,” he explained.
The secret of Switzerland’s good industrial relations is its system which allows for specific sectors, professions or regions to find their own solutions, enabling them to react with flexibility to market developments, he added.
Injustice
Enough signatures to call a nationwide vote were collected by trade unions, centre-left political parties as well as non-governmental organisations, and handed in a year ago.
The unions argue salaries have come under increasing pressure over the past few years while the cost of living in Switzerland has gone up. About 400,000 employees earn less than SFr4,000 ($4,300) a month, they say.
Trade union leaders have harshly criticised the widening gap between salaries at the top and at the bottom.
“Minimum wages are the best way to put an end to this injustice,” Paul Rechsteiner, president of the Trade Union Federation and senator for the Social Democratic Party, said when the signatures were handed over to the federal chancellery last January.
A date for the vote will be set by the cabinet once both houses of parliament have discussed the initiative.