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HindustanTimes Fri,31 Oct 2014

World Template

Wealthy Swiss voters say no to world's highest minimum wage, block fighter jets
Reuters
Zurich, May 18, 2014
First Published: 22:20 IST(18/5/2014)
Last Updated: 22:35 IST(18/5/2014)

Swiss voters on Sunday rejected proposals to introduce the world's highest minimum wage and spend $3.5 billion buying new Gripen fighter jets from Saab. 
 
About 76% 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 or Rs. 1464 approximately at current exchange rates) per hour, final results showed.   

Meanwhile, some 53% 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% of those eligible voted, the government said.
  
The clear rejection of the proposed minimum wage - which corresponds to a monthly paycheck of 4,000 francs (about $4,500) - 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 ha, ve led to job cuts, particularly in remote and structurally weaker regions," Swiss economy minister Johann Schneider-Ammann said at a news conference.   

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.
 
Voters overwhelmingly backed a referendum last year to give shareholders a binding say over executive pay, but turned down a proposal to cap the salaries of top executives at 12 times that of a company's lowest wage.   

Supporters of the minimum wage had argued the proposed measure would have helped smooth out salary inequality and ensure a person working full-time can live decently.  

Despite the resounding "no", Daniel Lampart, chief economist at SGB, said the debate around the measure in the run-up to the vote had prompted many firms to introduce a minimum wage of more than 4,000 francs.
   
Discounter Lidl raised minimum Swiss salaries to 4,000 francs last year and retailer H&M has vowed to follow suit next year, although employers do not acknowledge a direct link to the proposal.   

Swiss voters have a history of voting against proposals they feel could hurt the country's economic success story or threaten competitiveness.   

Yet the public unexpectedly voted by a razor thin majority in February to curb immigration from the European Union and last year backed a proposal to give shareholders a binding say over executive pay - both times ignoring warnings from business groups.       

NARROW GRIPEN DEFEAT   

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 favour 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," defence 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.        

"Thanks to the annual savings of 300 million francs, in the coming years we no longer need budget cuts in education, green policy and infrastructure," the Green Party's co-President Regula Rytz said in a statement.  
 
The defeat is also a setback in terms of revenues for Sweden's Saab, but analysts did not expect it to derail the future development of the latest generation Gripen. 
  
Switzerland's selection of the warplane in 2011 was a vote of confidence in the new version of the fighter jet and helped smooth the way for a surprise win of a larger tender to supply planes to Brazil.   

($1 = 0.8914 Swiss Francs = )


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