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Dublin: 11 °C Monday 20 October, 2014

Swiss vote on limiting top pay to 12 times that of lowest paid workers

The radical proposal will be voted on next week in a referendum.

Image: Photo of a pay slip via Shutterstock

THE SWISS ARE to go to the polls to vote on limiting the pay of high-earners as a debate rages in the country about income, inequality and what fair pay really means.

Under the radical proposal, businesses would not be allowed to pay any member of staff more than 12 times the wage that they pay their lowest earners.

In practice, this means that in a company where the lowest-paid employee earns 4,000 CHF (Swiss francs) per month (€3,200), the highest-paid members of staff would be able to earn a maximum of 48,000 CHF (€38,000 per month).

The so-called 1:12 Initiative for Fair Pay, which will take place on 24 November, has had significant support from the electorate in opinion polls.  The vote was proposed as part of a backlash over the perceived excesses of top executives during and in the wake of the financial crisis.

Polls in October showed the electorate evenly divided with 44 per cent in favour and 44 per cent. However since then a significant number of voters have shifted into the ‘undecided’ category.

David Roth, one of the architects of the plan, said the focus is not on a maximum salary but rather about fairness.

“It’s really just a thought process that says no-one should earn more in a month than the lowest-paid person in the same company does in a year,” he told Business Insider.

You shouldn’t just say a maximum salary because what we really want is a relationship between the lowest and the highest.
There are others who say that people shouldn’t earn over, say, a million, but in our opinion it is not really [about] the number.

The Swiss government is urging voters to reject the initiative on the grounds that it is anti-business and could tarnish Switzerland’s image.

Business groups say it would lead to a lower-than-usual income tax take, which would affect national services, and would adversely affect small businesses.

However proponents collected more than 100,000 signatures to call the nationwide vote as concerns became more vocal about the gap between highly-paid executives and average workers.

The country already banned ‘golden handshakes’ for retiring executives in a vote earlier this year.

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