Skip to comments.Are The Swiss Going Crazy? $25 Minimum Wage Referendum In May
Posted on 04/19/2014 6:56:07 AM PDT by Cheerio
Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea.
Let us look at the economic side of things first: for one thing, the law of supply and demand is not magically suspended when it comes to the price of labor. Price it too high, and not the entire supply will be taken up. Rising unemployment inevitably results.
However, there is also a different way of formulating the argument: the price of labor must not exceed what the market can bear. In order to understand what this actually means, imagine just for the sake of argument a world without money. Such a world is not realistic of course, as without money prices the modern economy could not exist. However, what we want to get at is this: workers can ultimately only be paid with what is actually produced.
(Excerpt) Read more at zerohedge.com ...
The higher the ‘minimum wage’ the more likely illegals will be accepted. In the short run this creates a servant class - in the long run the host country is destroyed.
The Swiss have a VASTLY different economy than we do, to the point where there is no comparison. We can’t sustain that kind of minimum wage. It’s entirely possible that Switzerland can.
I’ve been to Switzerland. Things are expensive there. They should make it $100 per hour. The EVERYBODY will be rich. Or maybe not. Socialists are a few cards short of a full deck.
Demographics have to match before any two economies can be compared. Nothing else matches the demographics of the US.
So you are saying that economic laws do not apply to the Swiss?
For someone to make $25 an hour, the employer must have a return of $25 plus an hour in benefits from that employee. One of the easiest ways for an employer to earn more profit is to let someone go and work those left harder.
The second way an employer can earn more profit is to charge more for their product or service.
The last thing an employer can do is close the business and take their money and do something else.
So raising minimum wage first increases unemployment, and second increases inflation or third bankrupt the business.
The primary purpose of any (non profit) business is to make a profit. Without it, then there is no point in being in business. Capitalism 101
So just what is the magic the Swiss have that we don’t?
Knowing the Swiss, if this passes, they are going to lead the way in robotics and other forms of automation.
A good friend just got back from a trip to Australia. The minimum wage there is $20.
Predictably, everything there costs twice as much as what it costs in the United States. Gasoline is about $2 a liter, or $8 a gallon to make the comparison.
So, while the minimum wage is a bit more than double that of the U.S., the costs of everything has more than doubled, no doubt, in part because the minimum wage is higher.
No advantage seems to have accrued to those with the minimum wage because of this.
Welcome to the Invisible Hand of Adam Smith.
In pondering this, I wonder if the opposite is the case, that jacking up the minimum wage might work against hiring foreigners.
That is, Switzerland has very tight employment rules, that are strictly enforced. It is already quite hard to hire foreigners, and it is getting even harder, and more expensive.
So if the minimum wage is $10/hr, it already might cost marginally more, all things considered, to hire a foreigner. And if they jack up the wage to $15/hr, it may cost perhaps $17-20 to hire them in the future.
In other words, a very different model than is seen in the rest of the developed world.
In any event, it will be interesting to see what happens, from an economics point of view.
Very little of the retail cost of gasoline is labor. Gasoline costs $8.00/gal in Europe because of taxes. Minimum wage has noting to do with it.
The people of Switzerland are opposed to endless ‘immigration’ just like the people of the United States are against endless illegal immigration. Ask the obvious - who benefits?
Who’s behind the push FOR more immigrants?
I can assure you it’s NOT a bunch of people who ‘love the downtrodden’ ( it’s not the wide eyed rent-a-mob young student paid ‘protesters’ liberal elites hire to be their window dressing... Nope - it’s industrialists and agribusiness moguls who want cheap labor.
In the US the same people who want illegals here (willing to work for two to four dollars an hour) are the same people who constantly want to raise the minimum wage. There’s no conflict in that position. It’s why the scramble is on to get more illegals into the country while NOT hiring the last bunch that was made legal...
CAIRO Endangering its relations with the European Union, Switzerland votes on Sunday, February 9, on a proposal to curb immigration to the wealthy country that was introduced by a far-right party, which championed a ban on the building of mosque minarets.
We have too much immigration, Toni Brunner, the head of the right-wing Swiss Peoples Party (SVP), said in an interview with German radio station SWR, Deutsche Welle reported on Saturday, February 9.
We have created the initiative because it’s really become excessive.
“Very little of the retail cost of gasoline is labor. Gasoline costs $8.00/gal in Europe because of taxes. Minimum wage has noting to do with it.”
You may well be correct. I only used it as a reference point. The taxes from the gasoline go somewhere and are used for something, and Australia is a socialist state, even if it is not in Europe.
Perhaps Australian freepers can tell us if my friends observations about the cost of living there are correct.
I was just in the UAE last month and rented a car for a couple of days.Gas there is about 1.7 Dirhams per litre which,at the exchange rate I got,comes to a little more than $2 a gallon.
Our economy has got away with a minimum wage for decades. Others can as well, with minimal damage, as long as it is not set too high above the actual market rate.
Switzerland has a higher value-added economy, fewer low-skill workers and less of an illegal immigration problem, though they are tightening up on immigration altogether.
I agree completely with the cause of this situation. What I wrote about was that the effects of increasing the minimum wage might be just the opposite of what its advocates think.
Which, you have to admit, would be hilarious. Even if totally unique to Switzerland.
Why not $250.00 or $2,500.00?
The veral Muslims are gonna love this. No more competition from Swedish youths for entry level jobs.
Only if the Swiss are 100% insulated from the world economy.
When they export anything, those products will reflect the cost of labor and must face the competitive reality.
Currently, 50% of the Swiss GDP is because of their healthy exports and the balance of trade is very positive.
The VAST difference between the Swiss economy and the US economy, is that they run cash positive while we run cash negative, in terms of import/export.
The USA could sustain a $25/Hr. minimum wage longer than the Swiss could, but it would destroy either economy.
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