Research on the minimum wage in Geneva: Minimum wage has no influence on the unemployment rate

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In 2014, voters said no to the national minimum wage initiative, which called for a monthly minimum wage of R4,000. The left and the trade unions were not deterred by the rejection, but encouraged the introduction of minimum wages with cantonal popular initiatives.

For example in the cantons of Neuchâtel, Jura, Geneva, Ticino and Basel-Stadt. Signatures for corresponding referenda are currently being collected in several cantons, and an initiative on minimum wages has just been tabled in Fribourg.

This tactic is causing red heads among the general population. So much so that last year the federal parliament approved a proposal by Center Councilor Erich Ettlin (61, OW), who wants to limit the cantonal minimum wage. At least if the social partners agree on lower wages in a generally binding collective labor agreement (GAV).

Hardly any impact on unemployment

Not only the unions are opposing this, but also the affected cantons. Earlier fears that cantonal minimum wages could lead to job shifts and job losses have now been refuted by a study in the canton of Geneva.

The introduction of a minimum wage therefore had no significant effect on unemployment there. This is evident from the first results on the effects of the minimum wage (24 francs per hour) introduced in the canton of Geneva at the end of 2020, which were presented on Thursday by the Ministry of Economic Affairs and Employment.

However, according to the research, the unemployment rate for people under 25 appears to be slightly higher than it would have been without the introduction of the minimum wage. Moreover, the number of young people looking for work could increase as the labor market becomes more attractive to them.

On the other hand, the minimum wage had no statistically significant impact on female unemployment. Further studies will follow.

Canton Neuchâtel as a pioneer

In Switzerland, five cantons have now introduced a minimum wage. The canton of Neuchâtel was a pioneer. In 2011, the population there agreed to the introduction of a minimum wage of initially 20 francs. In 2024 this should be 21.09 francs per hour, and in agriculture, wine and horticulture 17.93 francs.

The Neuchâtel tripartite commission responsible for monitoring the labor market did not find any overall wage undercutting. In 2022, it intervened in six cases, leading to arrears of more than 32,500 francs, of which 18,650 francs related to minimum wages.

A cantonal minimum wage has been in effect in the canton of Jura since February 1, 2018. The law currently prescribes a minimum gross wage of 20.60 francs per hour.

The canton of Friborg is also on its way to a minimum wage. A corresponding legislative initiative was submitted to the State Chancellery last week. A possible referendum will take some time. The initiative, which came from a coalition of left-wing parties and trade unions, calls for a minimum amount of 23 francs per hour.

Basel-Stadt said yes in 2021

In June 2021, Basel-Stadt became the first canton in German-speaking Switzerland to agree to the introduction of a minimum wage through the ballot box. About 54 percent of voters voted in favor of the government and parliament’s counter-proposal against the unions’ minimum wage initiative.

The minimum wage applies if there is no collective labor agreement or standard employment contract. There are exceptions for employees with performance limitations, interns and internships, among others. The current minimum wage in the canton of Basel-Stadt is currently 21.45 francs per hour. Due to inflation, a minimum wage of 21.70 francs will apply from January 1, 2024.

Since December 1, 2021, a minimum wage has been in force in Ticino, which is being gradually increased. On December 31, 2024, the gross minimum wage per hour in the southern canton must be between 19.75 and 20.25 francs.

The SP Ticino also submitted an initiative for a “social minimum wage” in February 2022. According to the party, the initiative is intended to prevent companies with a collective labor agreement from undermining the minimum hourly wage. It provides for a minimum wage of 21.50 francs.

Municipal minimum wage

In the cities of Zurich and Winterthur, voters approved the introduction of municipal minimum wages in June. In Zurich the minimum wage is 23.90 francs per hour, in Winterthur 23 francs.

It is not clear whether a municipal minimum wage is even legally permitted. In previous rulings, the Federal Court has described cantonal minimum wages as permissible, as long as they pursue social policy objectives. However, there is no such decision for municipal minimum wages. (SDA/rus)

Source:Blick