Swiss to vote themselves a pay raise : minimum salary? $50 000, page 1

Yay Switzerland.

Want a Raise? Vote on it! The Swiss do.

Switzerland is vote crazy. It has a referendum on most issues. There is a vote coming up that I’m sure will pass. This time around, the Swiss are going to vote themselves a big salary increase. As a result, Switzerland will have the highest minimum wage on the globe. That’s nice for the Swiss.

Being on the top of the list of minimum guaranteed income is a positive reflection on the Swiss economy. But it will also bring envy. It is an embarrassment of riches. I don’t think it will go unnoticed. The country is surrounded by economic problems, yet it's flourishing.

Switzerland has insured that its domestic companies are insulated from the economic chaos of its neighbors. It has achieved this with a currency peg. This appears to be a simple solution. So far, the peg is working. But there are consequences to this policy. In order to maintain an artificially low value for the Franc, the Swiss Central Bank (SNB) has had to absorb a huge chunk of official reserves, the bulk of which has been in Euros.

An argument has been put forward by the SNB, economists and bloggers, that there is no reason why the Swiss can’t continue to absorb foreign reserves. They argue that it doesn’t matter if it is E260b today, it would not matter if it were E500b in six months. I disagree. The SNB has investment restrictions. It only invests its Euro reserves in the debt obligations of France and Germany.

I doubt the Swiss can hold unlimited amounts of reserves without pressure on them to diversify those huge holdings to some of the governments (and the Supra-nationals).

But this kind of minimum salary is nothing in the grand scheme of things... what you REALLY need to look at is the BUYING POWER... And it's so expensive in Switzerland, $50k is equivalent to $20k in the US in buying power. Small houses go for $500k to $1M+ easy depending on the area. Everything is expensive.

I wonder for how long they gonna be able to pull that scheme...or how long before the hordes of barbarians are at their gates.

reply to post by Vitchilo

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Dear Vitchilo,

You're very probably correct in believing that foreign companies have left Switzerland. But back in 2006 they seemed to be be plentiful.
Foreign companies in Switzerland .pdf

Foreign companies have become a substantial part of the Swiss economy. Today, they account for almost ten percent of the Swiss GDP. Since 1995, they account for more than 20 percent of Switzerland’s GDP growth. While today foreign companies find conditions favorable in Switzerland – more than 1 000 companies
moved to Switzerland within the past two years – Switzerland cannot take this for granted.

But again, this was six years ago.

Why Do Foreign Companies Come to Switzerland?
More than 6 500 foreign companies are currently operating in Switzerland, typically for one of the following three reasons:
Switzerland is an attractive market
Switzerland offers the advantages of a highly developed market with attractive price levels and above-average margins. Because of its multi-cultural characteristics, many companies find Switzerland to be an excellent test market for new products and services.
Switzerland offers unique skills and production capabilities
Switzerland offers a skilled work force and local suppliers for highly specialized industries, such as biotechnology, pharmaceuticals, precision mechanics, and medical technology. Highly skilled workforces across all levels and a favorable work environment are important, differentiating elements.
Switzerland serves as a gateway to Europe
Switzerland is one of the most attractive locations for European and global headquarters and logistic centers of operations. More than 1 000 regional and global headquarters of foreign companies are located in Switzerland. A central European location with easy access, excellent infrastructure, responsive and transparent authorities and a favorable tax environment are among the most important drivers.

I found the report to be mildly interesting, but that's because it's dated and I have no investments that Europe can affect.

With respect,
Charles1952

reply to post by Cuervo

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You're absolutely right that Switzerland is a wonderful place with many things going for it. I'm not sure I can be more than mildly supportive of some of your statements, though.

A strong economy based on domestic production for ages.

Perhaps, but my understanding is that about 10% of Swiss are farmers and about 50% are in services (banking, government, etc.), leaving about 40% in all other areas. My post above had some breakdown as of 2006:
Retail/wholesale 12%
Public admin 11%
Banking 9%
Services/real estate 8%
Health Care/ Soc. Serv. 6%
Insurance 5% Total 51%

Foreign companies provided an additional 8%, so domestic manufacturing can't be any more than 30% of the GDP

Further popsmayhem is right to worry about the stability of the franc, already Swiss companies are being hurt.

The Swiss National Bank (SNB) has warned that what the billionaire entrepreneur Christoph Blocher this week described as the "catastrophic" overvaluation of the franc could tip the country into recession and deflation. It is also causing losses for millions of east European homeowners with mortgages in francs, as well as for European banks holding franc-linked derivatives contracts. Less likely to garner sympathy are the ultra-rich Swiss-domiciled hedge fund traders who are grumbling that their lavish bonuses – often paid in dollars – are suddenly worth less than they thought.

franc monster

Oh, popsmayhem is also right that direct democracy is mob rule mentality. It's just that a democracy is more peaceful and slower.

But, yes. Switzerland will be fine. It helps that there are fewer people in Switzerland than in New York City. And that 93 % of the population is German, French, or Italian.

reply to post by AutOmatIc

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Also, we are way overdue for a pay raise :p

I don't understand this, of course I don't understand much.

Are the Swiss supposed to get a general, across the board pay raise every few years and this pay raise is late? It can't be that too much time has gone by since the last increase in the national minimum wage, because there never has been a national minimum wage.

Is it that too many Swiss are poor, hungry and living in hovels? Have the Swiss become much more productive lately and are claiming part of that increase?

Why are the Swiss overdue?

reply to post by Cuervo

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- Everybody has health insurance

Well yeah because the minimum salary is high. Health insurance is private. You have to pay for it.

Ok, ok seems I have to step in to clarify some facts here.

„Switzerland is vote crazy“ - It’s called a working democracy.
„Switzerland has 10% farmers“ - It’s about 4%, declining numbers www.swissworld.org...
The Tourism board did a good job in portraying the picture of farmers blowing alphorns and the like. However if you see cities like Zurich, Geneva, or others they look like any other world city (a lot smaller and cleaner though).

„I doubt there's much foreign companies there anyway.“ – Especially Zurich, Geneva and Zug are attracting a lot of foreign companies. For instance Google’s european HQ is in Zurich, Glencore in Zug, Yahoo, Logitech, Nestle (Global HQ) to name a few.
Not to forget some of the global players in banking, which started in Switzerland (Credit Suisse and UBS).
It's true though that foreign companies do not like high minimal wages. But companies who look for low salaries are anyway not interested in switzerland.

„And that 93 % of the population is German, French, or Italian.“ ????
Make it „German, French or Italian speaking and you’r about correct.
According to wiki „Resident foreigners and temporary foreign workers make up about 20% of the population. “

What’s correct though; living there is costly, for comparison a McDonalds Combo meal is 12.63$ !! www.numbeo.com...

But back on topic; I do not think the vote on the minimal wage will pass.
The big companies will not like it, right wing groups will not like it.

reply to post by svetlana84

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**************I WAS WRONG****I'M SORRY*****************

Dear svetlana84,

Thank you very much for the correction, I don't like making mistakes and I'm grateful when I'm set right.

My error in the "10% farmer" came about because I used old information and didn't read carefully (Of course, I was also rounding.) That's a good lesson for me.

My error in the 93% confusion came about becuse I was looking for Swiss ethnicities and I came up with "lingoethnic groups." I should have known something was amiss. Gondoliers in the Alps?

But I'm curious about the 20% of foreign residents. I assume that's different from citizens, or is it? May they vote?

Anyway, thanks again for the corrections.

With respect,
Charles1952

reply to post by charles1952

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Charles, you'r welcome.

I actually see ATS as a good form for sharing information and learn from the crowd.

You'r question: "But I'm curious about the 20% of foreign residents. I assume that's different from citizens, or is it? May they vote?"

It's a tricky one, since there are different definition of residents and citizens.
the 20% (up to 30% in big cities) are people living in switzerland without a swiss passport. Workers from other countries (biggest part from germany), rich foreigners evading taxes in their home country, fugitives (biggest part from former yougoslavia) , foreigners married to swiss folks and so on.

To be able to vote you'd have to have a swiss passport.

According to Wiki:
Switzerland currently has about 7.5 million inhabitants; 5.6 million are Swiss citizens who have the right to vote although some cantons (states) and municipalities have granted foreigners the right to vote if they have lived a certain number of years in Switzerland.

en.wikipedia.org...

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