Geneva adopts what's believed to be the highest minimum wage in the world
Voters in Geneva, Switzerland, have agreed to introduce a minimum wage that is the equivalent of A$35 an hour - believed to be the highest in the world.
According to government data, 58 per cent of voters in the canton were in favour of the initiative to set the minimum wage at 23 Swiss francs an hour, which was backed by a coalition of labour unions and aimed at "fighting poverty, favouring social integration, and contributing to the respect of human dignity".
While Switzerland has no national minimum wage law, Geneva is the fourth of 26 cantons to vote on the matter in recent years after Neuchâtel, Jura and Ticino.
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The St Pierre Cathedral overlooking the roofs in the centre of Geneva. AFP via Getty Images
"This new minimum wage will apply to about six per cent of the canton's workers as of November 1st," Geneva State Counselor Mauro Poggia told CNN in a statement.
Communauté genevoise d'action syndicale, the umbrella organisation of unions in Geneva, described the result as "a historic victory, which will directly benefit 30,000 workers, two-thirds of whom are women".
The decision was also praised by Michel Charrat, president of the Groupement transfrontalier européen, an association of workers commuting between Geneva and nearby France.
Mr Charrat told The Guardian the coronavirus pandemic "has shown that a certain section of the Swiss population cannot live in Geneva," and argued that the new minimum wage is "the minimum to not fall below the poverty line and find yourself in a very difficult situation".
Mr Charrat didn't return a CNN request for comment.
The Geneva Council of State, the local executive branch, said in an opinion against the measure that the new minimum wage would be "the highest in the world".
A measure introduced by citizens
The Swiss system of direct democracy calls on voters to exercise their right four times a year, and allows citizens to collect signatures to introduce "popular initiatives" to be enacted.
"On two occasions in the past, initiatives to set a mandatory minimum wage in Geneva had been submitted to the population and rejected," Mr Poggia, who is in charge of the Department of Security, Labour and Health for the Geneva canton, said.
The two previous votes took place in 2011 and 2014, and in the latest case, it was a national referendum to introduce an hourly minimum wage of 22 Swiss Francs (A$33), which found 76 per cent of voters were opposed.
People jump into the lake Geneva on a hot summer day at sunset in Saint Saphorin, Switzerland. AP
"On 27 September, a new vote on this subject was finally accepted, for a salary of 23 Swiss Francs per hour, or slightly more than 4000 Swiss Francs per month for an activity of 41 hours per week," Mr Poggia added.
That's roughly A$6050 per month.
The federal minimum wage in the US is equivalent to A$10.09 an hour. Australia's minimum wage is A$19.84.
Geneva is the 10th most expensive city in the world, according to The Economist Intelligence Unit's 2020 Worldwide Cost of Living Survey.
The roughly 4000 Swiss francs workers will now earn puts them slightly above the poverty line of 3968 Swiss francs for a household of two adults and two children younger than 14, as estimated by the Swiss Federal Statistical Office in 2018.
People enjoy the sunny and warm weather on the Bains des Paquis on the shore of Lake of Geneva, in Geneva, Switzerland. EPA/AAP
Switzerland is among the wealthiest nations in the world, but it wasn't shielded from the damaging impact of the coronavirus pandemic on its economy.
Overall, the Swiss government's economic experts group expects the adjusted Swiss GDP to fall by -6.2 per cent in 2020, and average unemployment to be around 3.8 per cent, the lowest economic slump since 1975.
Did coronavirus impact the vote?
Michael Grampp, Deloitte's chief economist in Switzerland, said he believed the coronavirus pandemic had an impact in determining how many voters were in favor of passing the minimum wage initiative.
Low income workers in the service sector were the most affected by the lockdown measures put in place in Switzerland.
"I think many people realised how many people are working in these sectors. It's not like everyone here is working for a bank or a chocolate factory. We also have a broad service sector that was hit hard due to the lockdown," Mr Grampp told CNN.
WHO executives, from left, Tedros Adhanom Ghebreyesus, Director General of the World Health Organization (WHO) with Michael Ryan, Executive Director, WHO Health Emergencies Programme, and Maria van Kerkhove, Head of the Outbreak Investigation Task Force, during a press conference about coronavirus, at the European headquarters of the United Nations in Geneva. AP/AAP
"It definitely helped push the vote towards almost 60 per cent," he added.
Mr Grampp believes more cantons will enact minimum wage legislation. But Mr Poggia said he doesn't believe the pandemic had a significant impact on the vote.
"Compared to other countries, given the strong social security coverage in Switzerland, the economic effects of COVID are currently being contained, even though job losses are already occurring in the sectors that have been directly affected, such as tourism, hotels and restaurants," he said.
Swiss International Air Lines aircrafts and easyJet aircraft are parked on the tarmac of the Geneva Airport due to the coronavirus COVID-19. AP/AAP
Long lines for free food
Those job losses are forcing people to seek help.
Kilometre-long lines at free food distributions in Geneva made headlines worldwide, and they continue to take place, according to Charlemagne Hernandez, the co-founder of Caravane De Solidarité, an activist group in Geneva that has kickstarted the distributions in the city, mostly through donations.
Mr Hernandez told CNN the group he now works for, the non-profit Colis du Coeur, helped an estimated 6000 to 9000 people each week during the summer, distributing bags of fresh produce and dry goods sourced through donations, the official Geneva food bank, and various charitable groups.
Colis du Coeur is continuing food distribution through the winter.
Switzerland is among the wealthiest nations, with Geneva the 10th most expensive city in the world.
Mr Hernandez said he believes the adoption of the minimum wage initiative in Geneva was "necessary", as unemployment represents an existential threat for so many low income workers in the city.
"It will boil down to not having enough to eat," he said.
Geneva is known as the humanitarian capital of the world because of the presence of so many international organisations and UN offices focusing on humanitarian affairs.
Mr Hernandez said solidarity in the city "is much stronger these days than usual", as people respond to calls for donations in great numbers, helping the food distributions to continue.
To those who are skeptical about poverty being an issue in a wealthy country such as Switzerland, Mr Hernandez invites people not to judge.
"I come from a slum in Manila originally, so it's true, it's not the same kind of poverty, but if you're hungry, you're hungry. That's a benchmark you cannot deny," Mr Hernandez said.
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