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Switzerland – Province wants to be the first to introduce minimum wage

12 November 2013

If accepted by the Grand Council, the Swiss canton (province) of Neuchâtel will be the first to introduce a legally binding minimum wage, reports the Express-Impartial. A minimum wage of CHF 20 (€16.23) per hour, or CHF 3,640 (€2,953) per month will be established in 2015 if the campaign is successful.

The amount of CHF 20 per hour was calculated by estimating the amount a single person need so as not to require social assistance or benefits.  Jean-Nat Karakash, Head of the Department of Economic and Social Affairs, said: “It was an amount that does not jeopardise our economy. We have not been able to account for difference in wages by economic sector, or family status differences.”

The introduction of the minimum wage is expected to cost employers in the province an addition CHF 9 million (€) per year. It would also increase the wages of 2,700 people, two-thirds of whom are women.

The left wing political parties and the unions have expressed disappointment at the figure of CHF 20. They claim that in order to ensure dignity and decent living conditions, the amount must not be less than CHF 22 (€17.85) per hour.

Three quarters of the people that would be affected by the change in law are employed in the service sector: primarily hospitality, retail, cleaning and maintenance services, or services to individuals. If the campaign is successful, collective bargaining agreements below the CHF 20 per hour would have to be amended.   

The initiative stemmed from a referendum conducted in 2011 when 54% of respondents were in agreement with the introduction of a legally binding minimum wage in the Neuchatel Canton. Similar referendums in the Swiss cantons of Geneva and Vaud showed a majority of voters were against the minimum wage; in the north-eastern Jura canton, the vote granted a minimum wage to be negotiated between employees and employers without a collective bargaining agreement.

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