Swiss Go to Polls on World’s Highest Wage, Fighter Jet Purchase

Photographer: Chris Ratcliffe/Bloomberg

About 10 percent of Switzerland’s full-time workforce - particularly shop assistants and cleaning personnel - receive a pre-tax wage of less than 4,000 francs, according to a 2010 statistics office report. Close

About 10 percent of Switzerland’s full-time workforce - particularly shop assistants... Read More

Close
Open
Photographer: Chris Ratcliffe/Bloomberg

About 10 percent of Switzerland’s full-time workforce - particularly shop assistants and cleaning personnel - receive a pre-tax wage of less than 4,000 francs, according to a 2010 statistics office report.

The Swiss decide today whether to enact the world’s highest minimum wage and spend 3.1 billion francs ($3.5 billion) on 22 new Saab AB (SAABB) fighter jets.

While a proposal for a national minimum wage of 22 francs per hour looks likely to fail, the outcome of the vote on the government’s acquisition of Saab’s new Gripen jets is still too close to call, according to the most recent polls by gfs.bern.

“You can expect the participation to be higher than usual,” said Andreas Ladner, professor of public administration at the University of Lausanne. “Because the topics mobilize different groups, it’s hard to say in advance what the outcome will be.”

Voting ends at noon local time and results are expected later in the day. Most Swiss will cast their ballots by mail. Voter turnout averaged about 40 percent in recent decades.

Today’s referendums follow a series of initiatives -- including on executive pay and immigration -- that businesses say will stunt economic growth and make the country less attractive as a base for multinational corporations such Kuehne & Nagel International AG. (KNIN)

If accepted, the minimum wage initiative, launched by the biggest trade unions and opposed by business lobby Economiesuisse, would add to the recent barrage of business-unfriendly measures.

Photographer: Casper Hedberg/Bloomberg

Employees work on the production of a Saab Gripen fighter jet at the company's factory in Linkoping, Sweden, on Wednesday, Jan. 13, 2010. Close

Employees work on the production of a Saab Gripen fighter jet at the company's factory... Read More

Close
Open
Photographer: Casper Hedberg/Bloomberg

Employees work on the production of a Saab Gripen fighter jet at the company's factory in Linkoping, Sweden, on Wednesday, Jan. 13, 2010.

Economic Damage

Only one in ten full-time workers in Switzerland earns less than the 4,000 franc monthly minimum stipulated by the initiative, according to official data. Restaurant and beauty salon workers, as well as shop assistants, are among the sectors most affected. The median wage in the Swiss private sector was 6,118 francs last year, according to statistics office data.

The government argued the minimum wage would damage the economy, home to banks such as UBS AG (UBSN) and Credit Suisse Group AG (CSGN) and pharmaceutical companies Roche AG (ROG) and Novartis AG (NOVN), and where small and medium-sized businesses generate two thirds of employment. These smaller companies, particularly in rural areas, would have trouble raising pay to that level, it said.

As for the aircraft purchase, the government says it’s necessary for Switzerland to replace its fleet of Northrop Grumman Corp. (NOC) F-5 Tigers. Critics say the jets have a lifetime price tag of 10 billion francs -- money that could instead be used for education, transport or pensions.

The Swiss order is important to Saab because development of the next-generation Gripen E is contingent on an export order of at least 20 planes. Even so, Saab should meet that criteria thanks to beating Boeing Co. last year to develop 36 jets for Brazil’s air force in a deal worth $4.5 billion.

The Swiss Defense Ministry said it will honor result of the vote and will only comment further upon its outcome, spokesman Peter Minder said by telephone.

To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net Zoe Schneeweiss, Albertina Torsoli

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.