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Are The Swiss Going Crazy? $25 Minimum Wage Referendum In May
ZeroHedge ^ | 04/18/2014 | Pater Tenebrarum

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 ...


TOPICS: Foreign Affairs; Government
KEYWORDS: economy
(excert)
In Switzerland, the unions have recently managed to get the demand for minimum wage legislation on one of the quarterly referendums in the country. An interesting point has been brought up by one of the opponents in the course of the debate, but first a little background information:


Wait until Seattle hears about this!!!

Hundreds rally in support of $15 minimum wage
1 posted on 04/19/2014 6:56:07 AM PDT by Cheerio
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To: Cheerio

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.


2 posted on 04/19/2014 6:59:14 AM PDT by GOPJ (MSNBC reporters couldn't spot a criminal if he was at the company Christmas party.)
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To: Cheerio

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.


3 posted on 04/19/2014 7:07:50 AM PDT by arderkrag (To conquer oneself is a greater task than conquering others. - Buddha)
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To: arderkrag

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.


4 posted on 04/19/2014 7:13:50 AM PDT by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: arderkrag

Demographics have to match before any two economies can be compared. Nothing else matches the demographics of the US.


5 posted on 04/19/2014 7:26:11 AM PDT by Beagle8U (Unions are an Affirmative Action program for Slackers! .)
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To: arderkrag

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?


6 posted on 04/19/2014 7:27:02 AM PDT by CIB-173RDABN (I do not doubt that our climate changes. I only doubt that anything man does has any effect.)
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To: CIB-173RDABN

Knowing the Swiss, if this passes, they are going to lead the way in robotics and other forms of automation.


7 posted on 04/19/2014 7:28:17 AM PDT by dfwgator
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To: dfwgator; All

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.


8 posted on 04/19/2014 7:45:50 AM PDT by marktwain (The old media must die for the Republic to live. Long live the new media!)
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To: marktwain

Welcome to the Invisible Hand of Adam Smith.


9 posted on 04/19/2014 7:47:35 AM PDT by Lazamataz (Early 2009 to 7/21/2013 - RIP my little girl Cathy. You were the best cat ever. You will be missed.)
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To: GOPJ

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.


10 posted on 04/19/2014 7:50:40 AM PDT by yefragetuwrabrumuy (WoT News: Rantburg.com)
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To: marktwain

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.


11 posted on 04/19/2014 7:50:50 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: yefragetuwrabrumuy

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...

http://www.onislam.net/english/news/europe/469059-switzerland-set-to-ban-immigration-.html

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 People’s 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.


12 posted on 04/19/2014 8:11:40 AM PDT by GOPJ (MSNBC reporters couldn't spot a criminal if he was at the company Christmas party.)
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To: Cheerio
OK,so the minimum wage is raised to $25 and hour.Soon after the price of a loaf of bread will to $20,the price of a kilowatt of electricity will rise to $1.25 and the price of a basic VW will rise to $45,000
13 posted on 04/19/2014 8:13:25 AM PDT by Gay State Conservative (Stalin Blamed The Kulaks,Obama Blames The Tea Party)
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To: central_va

“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.


14 posted on 04/19/2014 8:13:59 AM PDT by marktwain (The old media must die for the Republic to live. Long live the new media!)
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To: central_va
Gasoline costs $8.00/gal in Europe because of taxes.

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.

15 posted on 04/19/2014 8:16:47 AM PDT by Gay State Conservative (Stalin Blamed The Kulaks,Obama Blames The Tea Party)
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To: CIB-173RDABN

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.


16 posted on 04/19/2014 8:30:15 AM PDT by 9YearLurker
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To: GOPJ

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.


17 posted on 04/19/2014 8:42:39 AM PDT by yefragetuwrabrumuy (WoT News: Rantburg.com)
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To: Cheerio

Why not $250.00 or $2,500.00?


18 posted on 04/19/2014 8:44:03 AM PDT by stevem
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To: Cheerio

The veral Muslims are gonna love this. No more competition from Swedish youths for entry level jobs.


19 posted on 04/19/2014 9:27:53 AM PDT by Organic Panic
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To: arderkrag
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.

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.

20 posted on 04/19/2014 9:40:22 AM PDT by USS Alaska (Exterminate the terrorist savages, everywhere.)
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To: USS Alaska
The USA could sustain a $25/Hr. minimum wage longer than the Swiss could, but it would destroy either economy.

In a closed system, no immigration both legal and illegal, and no welfare a minimum wage would work.

21 posted on 04/19/2014 9:42:23 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: Don Corleone
Last summer a couple Swiss Tourists stayed over at our place a few days. They told me min wage was 20 bucks, but for most the hourly wage was higher than that. They claimed their social network really benefited everybody also; especially for the workers on the bottom. They felt their system was fairer than ours here in the USA; and they weren't left wingers either. They continued to talk about their new system of proportional sharing of power by the several political parties; how much better their Country was doing with this new form of Government, not as much fighting between political parties.

The one kid played hockey, watched my Dir Tv NHL channel 24 hours a day, ha ha; the boy knew his hockey. He had never seen an NHL Channel, it stunned him.

I have my own range, back porch T bench, chrono, ect. So they were shooting all my guns everyday. They had guns in their country, but couldn't hunt much. They got a big kick outta rural Alaska, shooting and all. Swiss are a good bunch; they seemed to feel happy enough about their homeland.

22 posted on 04/19/2014 9:58:15 AM PDT by Eska
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To: Cheerio

Under the laws of economics you can do as you like. What you can’t do is escape the cost of doing what you like.


23 posted on 04/19/2014 9:58:27 AM PDT by marron
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To: arderkrag

They are a lot wealthier then us at least individually. They have the ways to do this so have had it. The United States is very different.


24 posted on 04/19/2014 1:31:09 PM PDT by napscoordinator ( Santorum-Bachmann 2016 for the future of the country!)
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To: yefragetuwrabrumuy

You could be right AND it would be funny...


25 posted on 04/19/2014 5:22:58 PM PDT by GOPJ (MSNBC reporters couldn't spot a criminal if he was at the company Christmas party.)
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To: arderkrag

Aren’t they taking advantage of their oil? Or is that Scandinavia?


26 posted on 04/21/2014 11:46:14 AM PDT by RWB Patriot ("My ability is a value that must be earned and I don't recognize anyone's need as a claim on me.")
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