Indecent Proposal

Every once in a while you read one of those stories that warms the cockles of your heart. Those accounts of people stepping beyond their boundaries, going out of their way, sacrificing their own precious time and resources to help someone in need. This morning a friend emailed me a link to one such story, and it touched me so that I can't help but share it here on the blog.

Trade unions in Switzerland have been working their members overtime in promoting a wage proposal that they have sponsored as a way of fighting poverty. This remarkable display of decency, of compassion, would result in a minimum wage unrivaled (by a long shot) anywhere in the world. Here's the bulk of that AP news release (HT Darren Thomas):

Switzerland's citizens voted Sunday on whether to create the world's highest minimum wage of 22 Swiss francs ($24.70) an hour.

If passed, the Swiss would more than double the existing highest minimum wages in force elsewhere in Europe. Results are expected later Sunday.

Trade unions sponsored the wage proposal as way of fighting poverty in a country that, by some measures, features some of the world's highest prices. But opinion polls indicated that most voters side with government and business leaders, who have argued it would cost jobs and erode economic competitiveness.

Switzerland currently has no minimum wage, but the median hourly wage is about 33 francs ($37) an hour.

The Organization for Economic Cooperation and Development lists the highest current minimum wage as Luxembourg' at $10.66 an hour, followed by France at $10.60, Australia at $10.21, Belgium at $9.97, and the Netherlands at $9.48. The U.S. minimum wage of $7.25 came tenth on the list. The OECD adjusted figures for spending power.

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To expend their resources to improve the lives of the citizens of a country that already boasts among the lowest unemployment rates (3.2%), and highest per capita incomes ($55,000) in the world, says something about the unions in a country that offers them minimal support compared to other Western European nations.

Oh, but I can hear the critics now. Anytime unions step up in this fashion, their detractors cry the following:

The unions are promoting a higher minimum wage, not out of concern for the impoverished, but as a way to further their own selfish cause.

A minimum wage of that magnitude would place a huge burden on their competitors who are not subject to the crippling costs of dealing with a union workforce (where most members are paid above the proposed minimum). Their goal is literally to destroy the competition.

They cloak their proposals with their pleas for the poor, while the imposition of such a heavy burden onto employers would virtually eliminate any opportunity for an unskilled citizen to find a job.

Employers would go to great lengths to adapt to the increased labor cost. Such as raising prices, laying off workers, reducing employee benefits, mechanizing, etc. "A way of fighting poverty"?? Give me a break!!

The poor, in fact, would be the hardest hit by this indecent proposal.

These are some of the typical assertions made by those who believe that minimum wage laws produce results precisely the opposite of what their promoters tout. And, to compound, and confuse, matters, the detractors' rally cry sounds like basic commonsense. And, in fact, it is! Yes, I am one of the detractors.  

Of the most rudimentary economic laws is the one promising that if you raise the price of something, chances are you'll get less of it, and/or less of something closely related. Raise the price of employment and there'll be fewer jobs and, well, just read again the block quotes above.

Again, without a minimum wage (and with minimal union representation) Switzerland's population enjoys a lower unemployment rate and higher average income than most countries on the planet. Hmm....