The Swiss Miss

OK:

Switzerland will hold a vote on whether to introduce a basic income for all adults, in a further sign of growing public activism over pay inequality since the financial crisis.

A grassroots committee is calling for all adults in Switzerland to receive an unconditional income of 2,500 Swiss francs ($2,800) per month from the state, with the aim of providing a financial safety net for the population.

Organizers submitted more than the 100,000 signatures needed to call a referendum on Friday and tipped a truckload of 8 million five-rappen coins outside the parliament building in Berne, one for each person living in Switzerland.

For married couples, you’re talking about $67,000 a year for blessing the planet with your presence. I know couples with two PhD’s who don’t make that much. Switzerland is a wealthy and expensive country — the per capita income is nearly $80,000. But this is ridiculous. In addition, Switzerland enacted “say on pay” limits to executive compensation and have an upcoming referendum to limit executive salaries to 12 times the lowest paid staff member. They may not be going quite full communist, but they’re close.

If these pass and you open a business in Switzerland, you will have to pay every employee no less than $34,000 a year and you yourself will not be able to take home more than $400,000 per year. I’ve always liked Switzerland, but I can see this driving away a lot of businesses.

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  1. InsipiD

    If these pass and you open a business in Switzerland, you will have to pay every employee no less than $34,000 a year and you yourself will not be able to take home more than $400,000 per year. I’ve always liked Switzerland, but I can see this driving away a lot of businesses.

    I’m surprised we aren’t already getting lectures about how fair this is. Or how fair it isn’t for that matter. Who deserves $400,000 a year anyway? What makes someone think that they’re worth that much when someone else is just making $34,000?

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  2. Hal_10000 *

    What makes someone think that they’re worth that much when someone else is just making $34,000?

    The market. I’d like to make $400,000 a year but there isn’t that much of a market for astronomers.

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  3. InsipiD

    Yeah, in order to put “famous” with “astronomer,” you have to be a crazy asshole. I’m not sure that “rich” and “astronomer” are even compatible words.

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  4. Biggie G

    ” I’m not sure that “rich” and “astronomer” are even compatible words.”

    I hear that guy on The Big Bang Theory is doing alright.

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  5. pekka

    > If these pass and you open a business in Switzerland, you will have to pay every employee no less than $34,000 a year

    Not exactly: the idea is that *every citizen* receives a fixed amount of money from the state. In return, all social services – welfare, cost-of-living subsidies, etc. are scrapped. I don’t think anybody expects the idea to actually go through. The general idea has recently been discussed a lot, though, especially in Germany. The wages employers would have to pay their employees would actually decline; the idea is that the basic wage would ensure survival, while the vast majority of people would continue to work out of a desire for status and comfort. They would just be able to be more relaxed about finding work, as joblessness would no longer be a catastrophe. Unpopular likes of work would become extremely well paid, etc. The system would be financed by taxing the shit out of consumption (VAT) and, I assume, business. I’m not saying it’s a workable model, but…. if you look at the budgets of some European countries, scrapping the entire welfare system with its hundreds of thousands of government employees in favour of a lump sum isn’t actually *that* crazy. The limit on executive compensation is also on the referendum for November, it hasn’t been voted on yet.

    It takes only 100,000 signatures to get a referendum on something in Switzerland – I’m doubtful whether either initiative will go anywhere. If the Swiss know anything really well, it’s how to stay filthy rich.

    > If these pass and you open a business in Switzerland, you will have to pay every employee no less than $34,000 a year and you yourself will not be able to take home more than $400,000 per year

    I don’t know the specifics, but the salary-limiting initiative looks like it’s targeted at the take-home of salaried executives rather than business owners (who still own the company even if they aren’t able to take more than 400 grand a year out of it.) It’s probably the banks that have most reason to be afraid (although I’m sure they’d find ways to work around the limitation quickly.)

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  6. Hal_10000 *

    Thanks, pekka. I suspected that a lot of social services would be dropped in exchange, but could not confirm. As I recall, Switzerland has a healthcare system similar to OBamacare, where purchasing insurance is mandatory.

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  7. pekka

    > As I recall, Switzerland has a healthcare system similar to OBamacare, where purchasing insurance is mandatory.

    I think that’s pretty much the gist of it, yeah. I’m told they have a 10% deductible for big operations, but I’ve never been able to confirm that.

    I know the idea of an unconditional basic income looks insane – the state providing a handout to every citizen, regardless whether they do any work or not, what? Who would get up in the morning anymore? But in a welfare state, you can often already survive without working (although it’s become incresingly inconvenient over the past decade.) Most people still go to work, for a variety of reasons. So the idea of replacing the welfare state with this isn’t entirely without merit – even though it may never be economically feasible, I’m not really equipped to do the math. Either way, it’s not just communism by another name. I know both the conservative and the socialist ends of the establishment in Germany oppose the idea violently. That tells me it’s something at least worth looking at. :)

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  8. Poosh

    If it removes certain parts of the welfare state and replaces it with responsibility then it’s not the worse idea ever? I can see a free market in, say, healthcare and education, would exist along free market lines (much more than in the US, for example) and the costs would not be distorted.

    Obviously stripping down executive pay will simply destroy these companies and is the most retarded idea I’ve ever heard of.

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  9. Poosh

    “As I recall, Switzerland has a healthcare system similar to Obamacare, where purchasing insurance is mandatory.”

    Which is why it’s NOTHING like the NHS and I wish people would stop making the analogy.

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  10. Hal_10000 *

    Well, MIlton Friedman was big proponent of abolishing all welfare programs in exchange for a negative income tax. Under this plan, people would get just enough to live on, but work would always pay because their benefits would decrease slower than their income. The reason welfare reform worked so well was that it took a bit of a step in that direction (EITC + cutting some programs).

    Still, the idea of pulling in $30k a year for nothing is galling.

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