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Basel to become the fifth canton with a minimum wage

Over the weekend, a majority of voters in the canton of Basel-City voted in favour of a minimum wage of CHF 21 (US$ 23) an hour.

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The move will make Basel-City the first German-speaking Swiss canton to adopt a minimum wage, following in the footsteps of Geneva, Neuchâtel, Jura and Ticino.

Until fairly recently Switzerland had no minimum wages. In 2011, voters in Neuchâtel voted in favour of a minimum wage, which was introduced in 2017. Jura followed with a minimum wage of CHF 20 an hour in 2018, Ticino followed in 2019 and then Geneva introduced one on 1 January 2021 after voting for a minimum wage of CHF 23 in September 2020.

The argument for minimum wages is that they ensure workers earn enough to live comfortably. The main argument against them is that they increase unemployment by pricing potential employers out of the market.

Looking at unemployment rates for May 2021 shows that Geneva (5.2%, Neuchâtel (4.2%) and Jura (4.9%) all have unemployment rates above the national average (3.1). Ticino (3.0%), however doesn’t.

Pinning down any causative link between minimum wages and unemployment is unlikely to ever be conclusive. There are too many factors at work. In any case, high rates of unemployment in Geneva, Neuchâtel and Jura predate the introduction of their minimum wages.

The initiative in Basel-City was aiming to introduce minimum pay of CHF 23 an hour. However, this plan was rejected in favour of a government counter proposal of CHF 21 an hour, which was supported by 54% of voters.

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