World’s highest minimum wage has been adopted by this city

By Rahul Vaimal, Associate Editor
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Voters in Geneva, Switzerland, voted to adopt a minimum wage equal to $25 an hour, considered to be the highest in the world.

According to government statistics, “58% of the region’s voters supported an initiative to set the minimum wage at 23 Swiss francs an hour, supported by a coalition of labor unions, aimed at “combating poverty, promoting social integration and contributing to respect for human dignity.”

The move has been described as “a historic victory, which will directly benefit 30,000 workers, two-thirds of whom are women” by the umbrella organization of unions in Geneva.

The Swiss Direct Democracy System calls on voters to exercise their rights four times a year and encourages people to gather signatures in order to implement popular initiatives.

An expensive city

$25 per hour as minimum wage may look huge, especially when you realize that a country like the US has a minimum wage of only $7.25 an hour. But there is an important factor to consider here.

According to the 2020 Worldwide Cost of Living Survey by The Economist Intelligence Unit, Geneva is the 10th most expensive city in the world. As calculated by the Swiss Federal Statistical Office in 2018, the approximately $4361 per month received by employees will only put them a little above the poverty line for a household of two adults and two children under the age of 14.

Switzerland is among the world’s richest countries, but this did not save it from the adverse economic effects of the coronavirus pandemic. Overall, the Group of Economic Experts of the Swiss Government expects adjusted Swiss GDP (Gross Domestic Product) to decrease by -6.2% in 2020 and average unemployment to be about 3.8%, its lowest economic recession since 1975.

The effect of pandemic

Michael Grampp who is the chief economist of Deloitte, the multinational professional services network, in Switzerland said he believed that the coronavirus pandemic had an impact on deciding how many voters were in favor of the minimum wage proposal being passed. In the service sector, low-income employees were the most affected by the lockdown measures placed in place in Switzerland.

Experts agree that the implementation of the Geneva minimum wage proposal was ‘essential’ because unemployment poses an existential threat to too many of the city’s low income workers. They said that “It’s going to come down to not having enough to eat.”

Because of the presence of so many international organizations like World Health Organization (WHO) and Red Cross and UN offices that work on humanitarian affairs, Geneva is recognized as the world’s humanitarian capital. Experts say that solidarity in the city “is far greater these days than usual,” as people respond in large numbers to calls for donations, helping to continue the distribution of food.

The job losses due to the pandemic have pushed the people in Geneva to seek help. According to non-profit organizations that kickstarted food distribution in the country, the mile-long lines at free food distribution centers in Geneva that made headlines worldwide continue to take place and the decision for a better minimum wage couldn’t come at a better time.