Most of you are likely familiar with the city of Geneva, Switzerland. Its famous for being the home of the United Nations and some of the worlds most lucrative (and secretive) banks, as well as the birthplace of the Geneva Convention. One other fact is that its among the most expensive places to live on the planet. As a result, its rather hard to get along there if youre not part of the fabulously wealthy set. But now theyve come up with a solution to that issue and its one that was probably predictable given Switzerlands socialist leanings. Theyre going to raise the minimum wage.
Big deal, right? I mean, we have people constantly pushing to raise the minimum wage here in the United States. But Geneva doesnt do things in half measures. The new minimum wage there is going to work out to $53,000 per year. Seriously. If you go to a burger shop in Geneva and order some fries, the person making them will be earning more than the median family income in America. (NY Post)
One of the worlds richest cities is instituting a minimum wage which proponents say is only relatively sumptuous.
Geneva, which by most metrics ranks in the top five for the globes priciest places to live, has approved a minimum wage which would be considered lavish elsewhere but is intended to just get food on the table for its poorest workers.
The Swiss city voted in a two-thirds majority Sunday to introduce a minimum wage of 23 Swiss francs ($25) an hour for a 41-hour workweek, CNBC reported. That adds up to somewhere in the range of $4,100 a month, or $53,300 annually, making it the highest minimum wage ever.
The city attempted to pass other versions of this law twice, back in 2011 and 2014, but referendums to put the measure in place failed with the voters each time. But as with so many other things in the world these days, the arrival of the novel coronavirus has changed everything. More people were out of work as many businesses closed down and even their generous social safety net programs could not cope. A recent report indicates that thousands of people have been standing in line since before dawn to get free meals at food banks.
The new measure still had opponents, however. And they cited some fairly basic reasons that this isnt a good idea. First of all, the employers who are still in business cant simply absorb these massively increased labor costs. Theyre going to have to raise prices on virtually everything. And much as weve seen in the restaurant industry here in the United States, many of them will also have to lay some people off or cut their hours to make up the difference.
Taking those facts into account, lets see if we cant figure out what the government of Geneva is about to do. In a city thats already too expensive for working-class people to live in and with rising unemployment, theyre about to put even more people out of work while raising the cost of living for everyone even higher. The new minimum wage will no doubt be a boon to those who manage to hang onto their jobs, so that part is great. But for all of the people who were already out of work and all the newly furloughed workers about to join them, its going to cost even more money that they dont have to simply survive in the city.
There was an alternative to this plan under consideration up until now. Geneva hosts approximately 200,000 cross-border workers who primarily commute back and forth from France. (The minimum wage in France is less than half of what its about to be in Geneva.) If they had closed the borders to such workers, more employment opportunities would have immediately appeared for the citys residents. Then they could have probably afforded to leave the minimum wage where it was and control the prices.
So why didnt they go that route? Because the cross-border workers have a union and they fought the border closure idea, claiming that it would have jeopardized the free movement of nearly 200,000 people. If that story sounds familiar, its because it shares a number of similarities with the Fight for Fifteen movement among labor unions in the United States. I guess some things really are universal, huh?