Photo: St. Pierre Cathedral overlooking the roofs in the center of Geneva, Switzerland. (2019)
While many of us are currently struggling to get by with minimum wage, workers in Geneva, Switzerland, are in for a serious increase in their pay packet. Voters in Geneva have backed a vote that will guarantee a $25 hourly minimum wage, making it the highest minimum wage in the world.
As a nation, Switzerland itself has no minimum wage laws, however, regions, known as cantons, are allowed to pass their own legislation on these matters.
Michel Charrat, president of the Groupement transfrontalier Européen, a worker's association, said in a statement that the vote:
"Has shown that a certain section of the Swiss population cannot live in Geneva."
The new law will be put into practice on the 1st of November and will affect around 6% of local workers, about 30,000 people.
Worker's unions are praising the Swiss democratic system that allows members of the public to advance laws and have them voted on in referenda. Several other cantons have already voted in similar wage laws, though Geneva due to its high living cost, is imposing the highest minimum wage.
Geneva State Counselor Mauro Poggia told CNN:
"This new minimum wage will apply to about 6% of the canton's workers as of November 1st. On 27 September, a new vote on this subject was finally accepted, for a salary of 23 Swiss Francs per hour, or slightly more than 4,000 Swiss Francs per month for an activity of 41 hours per week. Compared to other countries, given the strong social security coverage in Switzerland, the economic effects of Covid are currently being contained, even though job losses are already occurring in the sectors that have been directly affected, such as tourism, hotels and restaurants."
It is strongly suspected that the vote, passed by 58% of those that voted, was strongly impacted by the economic fallout caused by CoVid-19. While Switzerland is expected to have a smaller economic hit than other European countries, its economy is still expecting a fall of around 6% of GDP.
Michael Grampp, an economist in Switzerland, added:
"I think many people realized how many people are working in these sectors. It's not like everyone here is working for a bank or a chocolate factory. We also have a broad service sector that was hit hard due to the lockdown. It definitely helped push the vote towards almost 60%."
Whether other countries choose to increase their minimum wage, an economic policy generally thought to increase unemployment, while unemployment is rising, is still to be seen. Governments will be looking closely at the Geneva model to see what economic and social outcomes emerge from this new law.
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