Minimum wage has no impact on unemployment rate according to study
Published: Thursday, Dec 7th 2023, 15:00
Updated At: Thursday, Dec 7th 2023, 15:00
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The introduction of a minimum wage has had no significant impact on the unemployment rate in the canton of Geneva. Like Geneva, other cantons and cities have also introduced the minimum wage or are planning to do so.
The first results on the impact of the minimum wage introduced in the canton of Geneva at the end of 2020 (CHF 24 per hour) were presented on Thursday by the Department of Economic Affairs and Employment. They show that the measure has had no significant effect on the unemployment rate. However, according to the study, the unemployment rate for under 25-year-olds appears to be slightly higher than it would have been without the introduction of the minimum wage.
In addition, the number of young people looking for work could increase as the labor market becomes more attractive to them. On the other hand, the minimum wage had no statistically significant impact on the unemployment rate of women. Further studies are to follow.
Five cantons in Switzerland have now introduced a minimum wage. The pioneer was the canton of Neuchâtel. In 2011, the population there approved the introduction of a minimum wage of initially 20 francs. By 2024, it should be 21.09 francs per hour, and 17.93 francs in agriculture, viticulture and horticulture.
Back payments in Neuchâtel
The tripartite Neuchâtel commission responsible for monitoring the labor market did not record any general undercutting of wages. In 2022, it nevertheless intervened in six cases, which led to back pay of over CHF 32,500, of which CHF 18,650 related to minimum wages.
The canton of Jura has had a cantonal minimum wage since February 1, 2018. The law currently stipulates a minimum gross wage of CHF 20.60 per hour.
The canton of Fribourg is also on the way to introducing a minimum wage. A corresponding legislative initiative was submitted to the state chancellery last week. A possible referendum will have to wait a while yet. The initiative, which was launched by a coalition of left-wing parties and trade unions, calls for a minimum wage of 23 francs per hour.
Basel-Stadt pioneer in German-speaking Switzerland
In June 2021, Basel-Stadt was the first German-speaking canton in Switzerland to vote in favor of introducing a minimum wage. Around 54% of the electorate voted in favor of the government and parliament's counter-proposal to the trade unions' minimum wage initiative.
The minimum wage applies wherever there is no collective labor agreement (CLA) or standard labor agreement. There are exceptions for employees with performance restrictions, apprentices and internships, among others. The current minimum wage in the canton of Basel-Stadt is currently CHF 21.45 per hour. As of January 1, 2024, a minimum wage of CHF 21.70 will apply due to inflation.
A minimum wage has been in force in Ticino since December 1, 2021, which will be gradually increased. On December 31, 2024, the gross minimum wage per hour in the southern canton must be between 19.75 and 20.25 francs.
In February 2022, the SP Ticino also submitted an initiative for a "social minimum wage". According to the party, the initiative aims to prevent companies from undermining the minimum hourly wage with a collective labor agreement. It provides for a minimum wage of CHF 21.50.
Municipal minimum wages controversial
This June, voters in the city of Zurich and Winterthur approved the introduction of municipal minimum wages. In Zurich, the minimum wage is CHF 23.90 per hour, in Winterthur CHF 23.
Whether a communal minimum wage is legally permissible at all is not certain. In previous decisions, the Federal Supreme Court has ruled that cantonal minimum wages are permissible as long as they pursue socio-political objectives. However, there is no such ruling for communal minimum wages.
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