Even though there’s a very high level of income in Switzerland, there are still employees whose salary is proportionally too low.

Low-skilled workers in particular are sometimes barely able to cover their living costs. That’s why the idea of setting a minimum wage for all employees in Switzerland would seem obvious. In this article, we outline the advantages and disadvantages of a minimum wage.

Salaries are negotiated on an individual or collective basis

In Switzerland, salaries are negotiated on an individual or collective basis. Individual salaries are negotiated directly between the company and the employee .

For salaries negotiated on a collective basis, institutions such as trade unions and employers’ associations set the framework conditions for salaries for a sector or company. The minimum wage applicable for the sector or company is set out in what’s known as a collective employment contract (CEC).

What are the arguments in favour of a minimum wage?

As already mentioned, there are some advantages to a minimum wage for the whole of Switzerland. Here are some examples:

• fair salaries for the entire population, including the often disadvantaged, such as low-qualified workers and women
• Employees are protected from wage dumping, e.g. salaries which are far below the standard salary for the location, or which undercut the standard salary for the sector
• Assuming that more people work and the population earns more as a result of a minimum wage, there’d be more AHV income, fewer social costs, increased income tax contributions and higher consumer spending, all of which boost the economy

What are the arguments against a minimum wage?

However, a minimum wage for the whole of Switzerland has drawbacks, especially from an economic point of view. Possible disadvantages of a minimum wage in Switzerland include:

• the survival of small and rural companies, for example in agriculture or gastronomy, could be put jeopardized
• If the minimum wage were the same throughout Switzerland, employers in regions with a relatively low salary level would be at a disadvantage and would struggle to afford a higher minimum wage
• Part-time work on an hourly basis might be less appealing to employers, which would mean that students and older people, for example, would have fewer opportunities to work part-time
• Higher costs for salaries may have to be passed on to end customers to some extent, meaning prices would increase

No national minimum wage in Switzerland, but in certain cantons

Fact: a national minimum wage does not exist in Switzerland. However, as minimum wages can be determined on a cantonal level in federal Switzerland, there is currently a legal minimum wage level in five cantons. These five are Basel-Stadt, Geneva, Jura, Neuchâtel and Ticino.