Income and wealth inequality in Switzerland
The GINI coefficient for Switzerland is already low, at 29.6 (compared to the UK's 34, US's 45 and an EU average 30.4). Current data indicates the relative strength of the economy - real GDP growth at 1.9% in quarter 3 of 2013 (compared with a year earlier), 3.2% unemployment, real incomes rising, a current account surplus, high levels of both inward and outward FDI and a small government budget surplus. But things can always be improved, and the Swiss approach to 'direct democracy', which allows citizens to call for a referendum on anything they want, if they can gather 100,000 signatures calling for a vote, is currently resulting in a series of proposals to promote equality and social welfare.
They have recently rejected a proposal that would have limited executive pay to 12 times that of the lowest paid. That would have given Switzerland the world's toughest pay rules and some of the lowest executive salaries which is why business leaders said that would limit foreign investment and the government was also opposed to the proposal.
However in March they did back strict limits on bonuses and golden handshakes.Now two more votes are on the way, the first on the introduction of a minimum wage, and the second, and most controversial, on a guaranteed basic income for all legal residents, whether they work or not. There are concerns about this, given that Switzerland does subscribe to the EU principle of open borders and free movement of capital, but the main debate about that proposal does not centre around whether the state can afford it, which you might expect to be the issue, but the supply-side matter of whether it would act as a disincentive for anyone to study, learn a new job or enhance their human capital. What would it do for a national culture and work ethic?
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