Voters in Switzerland Reject Minimum Wage Over Concerns It Would Cripple Economy

May 21, 2014

Critics of the United States often say we should follow the progressive policies of European nations.  One progressive policy many European countries have is no minimum wage.  In addition, the progressive leaders of the European Union have not enacted an EU-wide minimum wage law.

Voters in Switzerland just rejected imposing a minimum wage law by “heck no” margins; 76% to 24%.   Opponents pointed out the union-backed Decent Salary Initiative would “destroy jobs, hurt lower skilled employees and make it harder for young people and others to enter the workforce.”  The government and business community warned a minimum wage would encourage businesses to shift operations to neighboring countries and would ultimately harm Switzerland’s competitiveness in the global marketplace.  Switzerland is one of the most prosperous countries in the world with one of Europe’ lowest unemployment rates at 3.2%.

Based on their resounding rejection of the proposal, Swiss voters heeded those warnings.

The Swiss Economy Minister Johann Schneider-Ammann declared the country had “dodged a bullet,” because introducing a minimum wage would have resulted in “layoffs” and made it “more difficult for people with few qualifications to find a job.”

The Swiss Business Federation, economiesuisse, said the results show the Swiss people will not tolerate government intervention in a free-market economy.  “Once again the Swiss people have rejected state intervention in salary issues. It seems that they feel that future wages and working conditions should be the subject of negotiation between employers and workers,” said federation president Heinz Karrerr.

A professor of politics at the University of Zurich noted that, “Switzerland, especially in popular votes, has never had a tradition of approving state intervention in the labour markets.  A majority of Swiss has always thought, and still seems to think, that liberal economic principles are the basis of their model of success.”

Other European countries without a minimum wage include Germany, Italy, Austria, Netherlands, Denmark, Norway, Sweden, Finland and Iceland. Interestingly, with the exception of Italy, those countries, like Switzeland, boast unemployment rates that are among the lowest in Europe.  And of 28 European Union countries, six of the seven member countries without a minimum wage hold spots in the ranking of the ten lowest unemployment rates.  However, like the United States, the minimum wage movement is trying to gain a foothold.  Germany is set to debate a minimum wage proposal this summer.