The news that the Swiss canton of Geneva now has a minimum wage of 23 francs (about 21 euros) per hour, about 3700 euros a month, the highest in the world, has surprised many, but there are explanations for this high value.
Geneva is a very rich area, with a huge private banking sector, the United Nations and the famous auction houses Sotheby’s and Christie’s, which regularly sell huge gemstones at scary prices.
The introduction of the minimum wage is the result of a referendum in late September. And what led to that?
This Swiss canton may be rich, but it is also home to tens of thousands of hotel staff, waiters, cleaning staff and hairdressers struggling to survive. When Switzerland went into confinement last March, images of queues of people at food banks in Geneva made headlines.
Charly Hernandez runs the charity Colis du Coeur and explained to the BBC report that 4000 euros may seem like a lot, but there are factors to take into account, especially the high cost of living in Geneva. “A single room costs 1,000 francs a month, you still need 500 francs a month for food, if you have health insurance there are 550 more a month per person. Whoever has a family with two children, can barely survive.”
The new minimum wage will make a difference for many people, like Ingrid, who uses the food bank. “At the end of the month, my pockets are empty. This [banco de alimentos] has been excellent, because it guarantees a week of food. A week of relief, “he told the BBC.
Even some of the association’s volunteers, like Laura, find the cost of living in Geneva difficult. With the salary of a nurse, she cannot afford to own a house in the city. “Only if I were to live in a very small place, a room. That’s why I still live with my family. I’m 26,” he explained.
Who will pay?
Companies that offer less than 23 francs per hour will now have to increase the salary of employees. Having to bear this new cost in a covid pandemic and a drastic drop in profits could do more harm than good, fears Vincent Subilia of the Geneva Chamber of Commerce.
“Hotels and restaurants are areas that already face great challenges due to the pandemic. This could compromise the very existence of these sectors,” he said.
A restaurant owner, Stefano Fanari, told Swiss television that he did not consider being able to pay the bill. “I am not against someone who makes 4,000 a month, but we have reached a point where we simply cannot afford it. I sacrificed myself, I work 12 hours a day here. What should I do?”
Geneva’s minimum wage was legislated not by the will of the Government, but because citizens of Geneva proposed it as a “people’s initiative”. They gathered enough signatures to call a referendum on the issue, and on September 27, voters said yes, with a majority of 58% to 42%.
Switzerland’s direct democracy system means that voters have the final say, so the minimum wage is now mandatory.
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