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Are The Swiss Going Crazy? $25 Minimum Wage Referendum In May

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http://www.zerohedge.com/news/2014-04-18/are-swiss-going-crazy-25-minimum-wage-referendum-may

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.

As Mises has pointed out, most so-called pro-labor legislation was only introduced after enough capital per worker was invested to make the payment of higher wages possible – usually, the market had already adjusted wages accordingly.

When everything is fiat the only option is to ask for more worthless tokens. Although the swiss token is worth currently quite a lot more in terms of purchasing power than some tokens. Meanwhile everyone ignores the problem of purchasing power.

So when the other 10% get on par with everyone else just what do they think is going to happen?

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the law of supply and demand is not magically suspended when it comes to the price of labor.

It is when it comes to the 'compensation' paid at the top- where one might expect the high pay on offer to result in increased competition- instead of which a crony based system of remuneration committees makes sure that supply and demand does not apply.

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It is when it comes to the 'compensation' paid at the top- where one might expect the high pay on offer to result in increased competition- instead of which a crony based system of remuneration committees makes sure that supply and demand does not apply.

You're quite wrong there. Remuneration committees do not decide who gets the post. They only decide what increases in pay they will receive once appointed. It certainly is an 'old boys' club though in terms of who gets appointed in the first place.

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Fantastic minimum wage in Switzerland I met English people over there during the ski season who said they we're staying on after the season ended because the money was so good even for McJobs.

Edited by workingpoor

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Fantastic minimum wage in Switzerland I met English people over there during the ski season who said they we're staying on after the season ended because the money was so good even for McJobs.

Indeed. Swiss wages are already high, aren't they, as are Swiss living costs? There are few problems with raising minimum wages to a level below what companies are already paying voluntarily, except that it's pointless; I believe the minimum wage here is around $10 an hour, but you'd be hard-pressed to find a job that pays so low when anyone half-competent can make several times that doing oil work... shelf-stacking seems to start around $15.

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It is when it comes to the 'compensation' paid at the top- where one might expect the high pay on offer to result in increased competition- instead of which a crony based system of remuneration committees makes sure that supply and demand does not apply.

Zerohedge is basically a website devoted to the owners of capital. Thus it's not surprising that they'd go rabid at anything that might decrease the share of national income going to capital. The only real difference between zerohedge and the wall street journal is that the latter wishes to divert more to the top 1% owners of capital, while zerohedge wants to divert it to the top 1 to 10% owners of capital.

Personally I think it's a great idea that at the minimum should be tried so that we can see the effects.

Edited by alexw

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Reading the article in more detail, it would appear that 90% of Swiss workers already make more than $25 an hour, so it would only push a few low-paid workers out of work and a few small businesses out of business.

In other words, only slightly worse than pointless. They should be voting for $50 an hour, instead.

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Zerohedge is basically a website devoted to the owners of capital. Thus it's not surprising that they'd go rabid at anything that might decrease the share of national income going to capital. The only real difference between zerohedge and the wall street journal is that the latter wishes to divert more to the top 1% owners of capital, while zerohedge wants to divert it to the top 1 to 10% owners of capital.

Personally I think it's a great idea that at the minimum should be tried so that we can see the effects.

Absolutely correct, the rubbish we are fed about free markets is just that. Taken to its logical conclusion we would have people living under bits of tin and queuing up for work every morning waiting for the nod to earn 50p per hour. Dont belive it? then this was the wage level for some in the UK pre the last Labour creating the min wage, under Thatcher wages dropped dramaticaly for many low paid workers and I did know one junior (3nd year) hairdresser in the 90s' actualy earning that while her boss bought new porches every year for him and his slapper wife.

The money should come from somewhere, ie , The top, that way it will filter through the entire economy instead of just stagnating at the top, revolving between buying and driving up the prices mansions and super yachts rathter than benefiting the whole population.

The happiest and healthiest societies in the western world are where the rich and the poor are much closer together re remuneration and quality of life, not as per the UK's medievil dog eat dog with the government helping and favouring the mega rich. (labour failed spectacularly on this one, should have reformed everything the previous tories did wrong, not excaccebate it)

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Reading the article in more detail, it would appear that 90% of Swiss workers already make more than $25 an hour, so it would only push a few low-paid workers out of work and a few small businesses out of business.

In other words, only slightly worse than pointless. They should be voting for $50 an hour, instead.

Flat out wrong. We are in a demand constrained world. That being the case this will increase, albiet in a small way, overall employment levels as it will be a transfer of income from those with a lower propensity to spend to those with a higher propensity to spend. Honestly, in a demand constrained world how could it be otherwise???

Edited by alexw

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Let's have a maximum wage too. A million pounds a year sounds reasonable. Why would anyone need more?

The argument against a maximum wage is that it would limit the incentives of the 'wealth creators', who create that wealth by starting business's that sell things. But if we extend that argument just a little bit we are forced to accept that there is another group who are just as essential to the process of wealth creation- those who buy the things that the wealth creators create.

That being so the idea of a minimum wage is entirely consistent, since if wages fall too low the wealth creation process will not work, since there will be insufficient demand for the goods and services that the wealth creators bring to market.

So while the exact level of wages could be debated, there is no doubt that allowing wages to fall too low relative to output will kill the system by starving it of customers.

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The argument against a maximum wage is that it would limit the incentives of the 'wealth creators', who create that wealth by starting business's that sell things. But if we extend that argument just a little bit we are forced to accept that there is another group who are just as essential to the process of wealth creation- those who buy the things that the wealth creators create.

That being so the idea of a minimum wage is entirely consistent, since if wages fall too low the wealth creation process will not work, since there will be insufficient demand for the goods and services that the wealth creators bring to market.

So while the exact level of wages could be debated, there is no doubt that allowing wages to fall too low relative to output will kill the system by starving it of customers.

+1

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The argument against a maximum wage is that it would limit the incentives of the 'wealth creators', who create that wealth by starting business's that sell things. But if we extend that argument just a little bit we are forced to accept that there is another group who are just as essential to the process of wealth creation- those who buy the things that the wealth creators create.

That being so the idea of a minimum wage is entirely consistent, since if wages fall too low the wealth creation process will not work, since there will be insufficient demand for the goods and services that the wealth creators bring to market.

So while the exact level of wages could be debated, there is no doubt that allowing wages to fall too low relative to output will kill the system by starving it of customers.

Yes, but this is why we have credit/debt.... and even more credit/debt.....tick tock.

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You're quite wrong there. Remuneration committees do not decide who gets the post. They only decide what increases in pay they will receive once appointed. It certainly is an 'old boys' club though in terms of who gets appointed in the first place.

So if who gets appointed and how much they are then paid are both the result of cronyism my only mistake was to understate the degree of rigging involved.

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Let's have a maximum wage too. A million pounds a year sounds reasonable. Why would anyone need more?

Ability to pay existing debt back, with the ability to borrow ever more.

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Let's have a maximum wage too. A million pounds a year sounds reasonable. Why would anyone need more?

Ever increasing minimum wages assist the fiat ponzi, maximum wages dont...

I dont see the rich getting less rich in countries with minimum wages. the unfortunate reality is those just above the minimum wage have to forgo pay increases, and thus the minimum wage becomes a de-facto maximum wage for more and more. Its communism, but with an elite not suseptible to the theft.

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The argument against a maximum wage is that it would limit the incentives of the 'wealth creators', who create that wealth by starting business's that sell things. But if we extend that argument just a little bit we are forced to accept that there is another group who are just as essential to the process of wealth creation- those who buy the things that the wealth creators create.

That being so the idea of a minimum wage is entirely consistent, since if wages fall too low the wealth creation process will not work, since there will be insufficient demand for the goods and services that the wealth creators bring to market.

So while the exact level of wages could be debated, there is no doubt that allowing wages to fall too low relative to output will kill the system by starving it of customers.

Unfortunetly, bankers bonuses, ponzi property profiteers, asset stripping private equity, offshored business models etc etc are the absolute mainstream of 'wealth creaters' as per our governments view of things. Science and engineering come a very long way behind these parasitical enterprise models.

Ever increasing minimum wages assist the fiat ponzi, maximum wages dont...

I dont see the rich getting less rich in countries with minimum wages. the unfortunate reality is those just above the minimum wage have to forgo pay increases, and thus the minimum wage becomes a de-facto maximum wage for more and more. Its communism, but with an elite not suseptible to the theft.

Really, Australia for a 100 years had the highest min wage levels in the world and you know what? it was a much better society with a much flatter playing field, with far more opportunity to get ahead than has been the case in the USA and other countries with either no min wage or low min wage. It was possible during this era for every working person to buy a house and live a civilised life, unlike in much of the previously mentioned countries.(it has of course changed in recent years with the massive right wing plot to move all money flows away from labour (and that means everyone on this site) to capital and successive governments giving way to it.

It should be a national priority to raise the quality of life at the bottom end of the workforce in order to have a well structured society and economy, The emphasis for far too long has been about preserving and extending the wealth of the few at the expense of the majority. There are far more people on the min wage or less than there are mega rich people but the former are not represented at all by our governments.

If more money is forced down to the lowest paid then the real velocity of money increases and all benefit, currently there is stagnation going on and any GDP growth etc is nothing more than inflation and dodgy accounting.

Too many people measure themselves against someone they see to be lower in the pecking order, its good to keep people down and makes them feel more important. This of course is the Daily mail type of view of the world, you know 'how dare a cleaner make 15 quid an hour' type of rant. This is bullsh(t and you all know it.) Lets compare this with the amount of money going to pure fluff, ie 'Celebreties', footballers, frock designers, posh hairdressers etc etc Toilet cleaners and low level hospital workers are far more important in society than that lot will ever be but no one complains about a footballer making megga millions per year.

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Fantastic minimum wage in Switzerland I met English people over there during the ski season who said they we're staying on after the season ended because the money was so good even for McJobs.

I wonder if they have a debate about overseas workers -those hard working brits- taking the lowly jobs that the locals don't want to do.

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