Swiss Voters Reject $25-an-Hour Minimum Wage, $3.5 Billion Jet Deal

Worried about upsetting Switzerland's strong economy or driving its high costs even higher, more than three-quarters of Swiss voters rejected a plan Sunday to create the world's highest minimum wage and slightly more than half spurned a request to outfit the Swiss Air Force with 22 new fighter jets.

About 76 percent of voters in the wealthy nation dismissed the proposal made by Swiss union SGB and backed by the Socialist and Green parties for a minimum wage of 22 Swiss francs ($25) per hour, final results showed, Reuters reported.

Meanwhile, some 53 percent blocked a government plan to free up funds to replace Switzerland's aging fleet of fighter jets with 22 Gripen jets from Saab. Just over 55 percent of those eligible voted, the government said.

The clear rejection of the proposed minimum wage brings relief to business leaders worried the measure would have hurt competitiveness and damaged the Swiss workplace.

"If the initiative had been accepted, without doubt that would have led to job cuts, particularly in remote and structurally weaker regions," Swiss Economy Minister Johann Schneider-Ammann said at a news conference. "The best remedy against poverty is work."

◆ Widening Income Gap

Sunday's vote is the latest in a slew of initiatives being put to voters to try to address the widening income gap in the generally egalitarian country.

Switzerland has some of the world's highest living costs and trade unions had sought in the balloting to require minimum salaries for workers that would total more than $53,000 annually. The median salary in the Alpine nation is now about $77,000, but pay is set by individual employment contracts or collective bargaining agreements.

The minimum pay referendum was the third in Switzerland in the last 18 months to deal with the increasing gap between rich and poor people. Voters previously adopted restrictions on bonuses for corporate executives, but rejected controls that would have limited their salaries to no more 12 times that of the lowest paid workers.

Switzerland's ruling Federal Council welcomed the defeat of the minimum wage plan sought by trade unions.

Trade unions had proposed the higher minimum wage as a way of fighting poverty in a country that, by some measures, features the world's highest prices and most expensive cities.

But opinion polls had indicated that most voters sided with the council and business leaders, who argued it would cost jobs and erode economic competitiveness, driving Switzerland's high costs even higher.

"A fixed salary has never been a good way to fight the problem," Schneider-Ammann said.

The proposal would have eclipsed the existing highest minimum wages in force elsewhere in Europe. Switzerland has no minimum wage, but the median hourly wage is about 33 francs ($37) an hour.

The Organization for Economic Cooperation and Development, which adjusts figures for spending power, lists the highest current minimum wage as Luxembourg's at $10.66 an hour, followed by France at $10.60, Australia at $10.21, Belgium at $9.97, and the Netherlands at $9.48.

The U.S. wage, an adjusted $7.11 down from the actual $7.25 rate, came 10th on the list.

Adjusted for its high prices, Switzerland's wage proposal would have represented about $14 an hour based on a 42-hour work week.

One voter, Rakesh Stehle, said he voted against the measure because he felt adoption of a minimum wage would actually cut salaries for many workers.

"I voted 'no' to the minimum wage because I think companies will take advantage of this and if there is a minimum wage they will impose the minimum wage on companies and it's negative because we will not have the salary we have now. Life is already very expensive and we should have a wage adapted to suit to the life we have," Stehle said.

◆ 'No' Vote on Jets

The "no" vote for the Gripen jets bucks a historic trend for public support for the military and runs counter to a referendum last September, in which the Swiss public voted overwhelmingly in favor of keeping military conscription.

The government had argued that Switzerland needed modern fighter jets -- which are used to police the skies above Davos during the World Economic Forum -- to support its armed forces and protect the country's stability.

"This decision will cause a security gap," Defense Minister Ueli Maurer said in reaction to the vote. "We will do everything we can to fill this gap in these difficult circumstances as quickly as is possible."

Switzerland was embarrassed earlier this year when a hijacked Ethiopian Airlines plane heading for Geneva had to be escorted by French and Italian fighter jets because the incident occurred outside normal business hours.

Although both the Swiss upper and lower houses of parliament backed the deal, Swiss interest groups -- including the socialists, Greens and the Group for Switzerland without an Army -- secured a referendum by collecting the 50,000 signatures needed to force the popular vote.

Opponents had argued buying the jets was an unnecessary expense, requiring cuts in other areas, such as education. They also said the cost of keeping the jets in operation would likely spiral to at least 10 billion francs over their lifetime.

Some information for this report was provided by AP and Reuters.

VOA News / May 19, 2014 08:06 KST