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WEALTH

Swiss canton adopts a minimum wage

The new law comes four years after voters in the Italian-speaking canton of Ticino approved the introduction of a minimum wage in a referendum.

Swiss canton adopts a minimum wage
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The legislation, which will go into effect from July 2020, requires the cantonal government to set a minimum wage that is proportional to the median salary for a specific job in a particular industry, if this is not already determined by a collective labour agreement.

With the exception of some jobs where individual contracts between a company and an employee are made, usually collective agreements are negotiated by trade union representatives and apply to an entire industry or an entire canton. 

In 2017, the Ticino economics minister Christian Vitta set the minimum monthly salary at between 3,372 and 3,462 francs, depending on the sector. This corresponds to an hourly wage of nearly 20 francs.

However, the leftist parties and the unions consider the minimum wage proposed by the government insufficient, arguing that it may not allow some people to live without social assistance.

They are also concerned that the threshold is set too low to combat widespread wage dumping. The Greens demand an amount of at least 21.50 francs per hour, while the Social Democrats want a minimum wage between 20 and 20.50 francs.

But the right-wing Swiss People’s Party argues that the introduction of a minimum wage does not make sense when a large number of employers hire cross-border workers from Italy. According to official figures, 67,800 Italians commute to their jobs in Ticino each day. 

Ticino is generally considered a low-income region. Nearly a quarter of the jobs in the canton are poorly paid, while the Swiss average is 10 percent.

In addition to Ticino, only two cantons have introduced a minimum wage: Neuchâtel and Jura set it at 20 francs an hour.

Geneva’s electorate will vote on the minimum wage of 23 francs an hour, but no date for the referendum has been set yet.

At the federal level, an initiative of the Swiss Trade Union to implement a minimum wage nationwide was rejected by the voters in 2014.

The initiative was not accepted mainly because voters were concerned that having a mandatory minimum wage would increase costs for employers and may drive some companies out of business. Other opponents argued that a minimum wage was not needed as most Swiss workers’ salaries were already higher than the proposed minimum wage.

READ ALSO: What you need to know about minimum wages in Switzerland

 

 

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MONEY

EXPLAINED: The everyday items getting more expensive in Switzerland

Inflation in Switzerland climbed to around 3 percent in October. Here’s a look at some of the everyday items that have been rising sharply in price - and the few that are actually going down in cost.

EXPLAINED: The everyday items getting more expensive in Switzerland

Breakfast products going up

Breakfast items are getting more pricey in Switzerland, according to data compiled by the Comparis Consumer Price Index, which tracks the development of goods like food, medicine and clothing. 

In October of this year, prices for everyday goods in Switzerland rose by 3.2 percent compared to the same month last year, according to the index.

But nine typical breakfast ingredients are on average 5.5 percent more expensive compared to a year ago. 

People in Switzerland have to pay more for butter (in increase of 10.7 percent compared to the same month a year ago), margarine, fats and oils (plus 8.9 percent), coffee (plus seven percent), milk, cheese and eggs (plus 5.9 percent) and tea (plus 3.4 percent).

READ ALSO: How does the cost of living in Switzerland compare to other European countries?

The prices of these goods have been rising steadily for several years, the consumer service Comparis found. Since the year 2000, breakfast with the ingredients we mentioned above has become 11.1 percent more expensive on average. The cost of butter, jam, honey, margarine, fats and oils, tea, coffee, bread, flour and cereal products have risen the most over the years.

But it has been accelerating this year as inflation is fuelled by rising energy prices amid Russia’s war on Ukraine. 

“For years, the costs of typical breakfast ingredients have been rising faster than the prices of the entire overall basket of goods,” said Comparis financial expert Michael Kuhn, adding that it was hitting those on lower incomes particularly hard.

Heating costs rocket upwards

Besides some food items, other goods have also become more expensive in the Alpine country. 

Between September and October, the prices for heating (including gas, heating oil and district heating) rose by 8.8 percent, according to the Comparis index. And compared to the previous year, the price of heating rose by as much as 56 percent, according to the index. 

“Heating oil, in particular, became hugely more expensive in October,” said Kuhn.

After heating costs, prices for printed products, men’s and women’s shoes – as well as fruit and vegetable juices – have also shot up in price. The reasons for this could be “poor harvests and increased demand”, Kuhn said. 

READ ALSO: The groups most affected by inflation in Switzerland

What’s not increasing dramatically – or going down in price?

Not all items are rising in cost at the same rate.

The cost of of electricity, for instance, has remained stable since September, and compared to the same month last year, electricity has become about 2.4 percent more expensive. 

Looking at the bigger picture, some products have also gone down in price.

Medicines, small household electrical appliances and body care products have become cheaper over the last few years, according to the index. 

Medicines in Switzerland have seen an average reduction in price by 43 percent since the year 2000.

Electrical household appliances, personal hygiene and telecommunications products – like mobile phones – are now about 30 percent cheaper. Toiletries have also become 14 percent cheaper, the consumer service found. 

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