Switzerland is known for many things: cheese, watches, banks, army knives, chocolate, and that it is one of the wealthiest countries in the world. The Swiss people, however, are a bit weird – they recently voted against a bill which proposed $25 per hour in minimum wage.
Meanwhile in the US, our workforce is fighting tooth and nail for a wage hike that would see minimum wages raised to $8.15, or $9, or $10 – from the current $7.25.
What unites the American workforce and the Swiss voters is their concern for the masses. And unlike the US, the Swiss government left it to its people to decide what they thought was an appropriate number for minimum wage. Coincidentally, if the referendum would have passed, it would have set the Swiss nation's minimum wage at $25 an hour. To put it simply, the Swiss would have been the world's highest paid unskilled workforce.
So what stopped this from happening? Well, besides the fact that they are weird – at least we think so – the fact of the matter is that an increased minimum wage would have resulted in fewer jobs and greater inflation and, well, who wants that?
Not to take anything away from the people fighting for a wage hike in the US, but there seems to be a lack of understanding about the whole business. What no one is talking about is that if and when minimum wages go up, so will the cost of doing business. For instance, the immediate after-effect of the wage hike will be higher prices charged by providers/manufacturers for their products, because they will be paying more for the same amount of work. The cycle of inflation will also work to entangle the workers, and so they will not be able to make ends meet because their purchasing power will essentially remain the same. And we’ll be back to square one.
The alternative is that businesses would start cutting jobs, and according to one conservative estimate, job cuts resulting from wage hikes could leave nearly half a million people unemployed. So, in essence, we would still end up losing even after winning the wage-hike war.
The way we see it, a wage hike may be a short-term solution to make ends meet, and therefore something bigger needs to be thought of, and implemented. Something which doesn’t threaten us with inflation, job cuts, or businesses shutting down – that way it could be a win-win for all involved.