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Minimum wage debate returns to Switzerland

Published on 18/06/2020

The country’s political left is not giving up on minimum wages, despite a defeat in a referendum a few years ago. Now, an alliance has launched popular initiatives demanding a statutory hourly wage of at least CHF23 ($24.25) in three major cities.

More than 17,000 full-time workers in the city of Zurich earn less than this, which works out at around CHF4,000 a month before deductions, said a group of trade unions, political parties and aid organisations on Tuesday.

This is far less than the average wage in Switzerland, which is around CHF6,500.

The main beneficiaries of a minimum wage in Zurich, nearby Winterthur and Kloten would be the working poor, who are currently only able to keep their heads above water by working several jobs, the alliance said. Two-thirds of those affected are women. 

The worst-paid professions include sales and courier services, it added. In Winterthur and around Zurich airport at Kloten, there’s a large low-wage sector, for example in cleaning staff.

High cost of living

Although Switzerland does not have a nationwide minimum wage, a handful of the country’s 26 cantons have either introduced one following popular votes (Neuchâtel, Jura and, soon, Ticino) or are set to vote on one (Geneva, Basel City). In Neuchâtel and Jura, for example, it is CHF20 an hour. The vote in Geneva and Basel City will be for a minimum wage of CHF23.

While this sounds a lot, the cost of living in Switzerland is also one of the highest in the world.

That said, a CHF20 minimum wage is still pretty much double those that exist in most other countries. An OECD study in 2018 calculated the real minimum wages among 32 countries. At the top were Australia ($13.90) and Luxembourg ($13.80), followed by France ($11.70), Ireland ($11.30) and New Zealand ($11.20).

In the United States, the federal minimum wage is $7.25 (CHF6.90), although many states also have minimum wage laws, with rates usually higher than the federal minimum wage. In Britain, the hourly national minimum wage rate depends on one’s age and whether one is an apprentice, but for a worker over 25, it is £8.72 (CHF10.45).

‘Decent rate of pay’

While campaigners have had successes at the cantonal level, at a federal level they’ve received less support. In 2014, just over three-quarters of voters rejected a world-record minimum wage of CHF22 per hour.

The country’s biggest trade union umbrella group had pushed the issue to a vote, arguing a nationwide limit would entitle everyone to a “decent rate of pay”. In the grander scheme of things, it said the change would help reduce poverty and fight wage dumping, where firms bring in workers from abroad and pay them less.

The government begged to differ, saying the alternative would have meant job losses. “Work is the best antidote to poverty,” said the economics minister at the time.