Voters in the canton of Geneva in Switzerland have voted to introduce a minimum wage of 23 Swiss francs, or $25, an hour, widely believed to be the highest in the world. This will amount to slightly more than 4,000 Swiss Francs per month for an activity of 41 hours per week
This new minimum wage is to go into effect on 1st November this year.
Remarkably, this figure is more than triple the minimum federal wage of $7.25 in the United States.
According to the data released by the government, 58 per cent of the voters in the canton voted in favour of this minimum wage. Aimed at combating poverty exacerbated by the coronavirus pandemic, the decision was also supported by a coalition of labour unions.
“This new minimum wage will apply to about 6% of the canton’s workers as of November 1st,” Geneva State Counselor Mauro Poggia told CNN in a statement.
The system of direct democracy in Switzerland enables voters to exercise their right to vote four times in a year on popular initiatives.
On two previous occasions in 2011 and 2014, the initiative to set a mandatory minimum wage limit was rejected. However, experts and analysts believe that this time, the pandemic had a major role to play in the decision.
“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,” said Michael Grampp, Deloitte’s chief economist in Switzerland.
The city of Geneva, which is the capital of the canton, is one of the most expensive cities in the world. And while Switzerland is one of the wealthiest nations, its economy has not been spared by the deleterious effects of the pandemic – it officially entered a recession in the third quarter of this year.