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View Full Version : Swiss to vote on 1:12 Initiative. Rich cant make more than 12x lowest earners



TheCockMongler
11-19-2013, 03:31 PM
On Nov. 24, Swiss voters will go to the polls to vote on a radical new idea limiting the monthly pay of the highest earners in Swiss firms to no greater than the yearly pay of the lowest earners. It's being called the 1:12 Initiative and it sure has some people worried.

To understand the context of the vote, you need to know two things about Switzerland. First, the country has a relatively unique system of direct democracy if 100,000 people sign a proposed change to the constitution, or "popular initiatives," a referendum is held. If a majority of voters and cantons (Swiss states) agree with the proposal, the change can become law.

The second factor is how these Swiss initiatives have been used recently. Earlier this year Swiss voters agreed to an idea proposed by entrepreneur Thomas Minder that limited executive (in his words, "fat cat") salaries of companies listed on the Swiss stock market. On the other end of the spectrum, a proposal to give every Swiss adult an unconditional income of $2,800 a month recently gained enough signatures to be voted on.

The 1:12 Initiative lies somewhere between these two extremes in terms of its radical ambition, but its core idea comes from the same place an angst in Switzerland, a country most famous for centuries of private banking, that executive pay and income inequality are out of control.

To understand the thought process, Business Insider called David Roth, the leader of the youth wing of Swiss party the Social Democrats, and one of the architects of the plan. Roth explained that high executive salaries only became a big issue in 2002 or so, and by 2006/7 they became a public issue. The preparation for the 1:12 Initiative began in 2009.

"It's really just a thought process that says no-one should earn more in a month than the lowest-paid person in the same company does in a year," Roth says. "You shouldn't just say a maximum salary, because what we really want is a relationship between the lowest and the highest. There are others who say that people shouldn't earn over, say, a million, but in our opinion it is not really the number."

That sounds nice, but what would it look like in reality? Statistics published in the Swiss press suggest that many companies currently pay their CEOs salaries that are hundreds of times the salaries of their lowest-paid workers; for example, the ratio for health care company Roche is reportedly 1:236, and for pharmaceutical giant Novartis it's said to be 1:219. So, would a company where the CEO earns 12 million Swiss francs a year suddenly start paying its receptionist 1 million Swiss francs a year? Or will the receptionist's salary of 40,000 Swiss francs a year result in a CEO with a 480,000 Swiss franc salary?

"It's wrong to say it will do one of those extremes," Roth counters. "I think it will be both. First of all the high salaries will go down, but then what will happen with the money that is available after that? We hope that some of it will go to the lower-paid workers."

"The government of my district is predicting that if the initiative is accepted we would have lower tax of around 9 million Swiss francs. Next week I will be there in parliament and we will discuss tax reductions for companies and rich people, which will cost hundreds of millions of francs," Roth says. "[People] always think that the money that [executives] wouldn't be earning would just disappear, and that's just not the reality. The money won't just disappear. It'll probably go to lower-paid workers, it may also stay within the company and be reinvested. That ought to have a good effect on our economy."


http://www.businessinsider.com/switzerlands-112-initiative-why-executives-are-worried-2013-11


Would be interesting to see how it plays out. Thoughts?

IraHays
11-19-2013, 03:33 PM
Actually a good way to bring up wages. Lol.

Fiyero
11-19-2013, 03:37 PM
Sounds like a good plan to me. Drives me insane that CEOs of failing companies in the US still get their multi-million dollar salaries/bonuses, even if the business goes bankrupt.

danielMSF
11-19-2013, 03:39 PM
I'm not sure about this. I don't know about this. Some positions require a skill set that is worth more than 12 times the receptionist who answers the phone for example. Doesn't seem right to underpay. Surely it will lead to skilled individuals leaving.

I like the idea of income equality but when you're operating in a world where this isn't the case, the difference between top wages in your country and others makes this seem foolish as you'll experience brain drain. Unless low end salaries go up but I don't see how that's viable...

tk217
11-19-2013, 03:43 PM
min wage $8

ceo of biggest company in the world wage $96

not sure if srs. 1:50 maybe.

Steve jobs -- 1 dollar...

BUT NOT INBENEFITS! Whooooo how can we get around this law - oh I know - "stock options."

TheCockMongler
11-19-2013, 03:49 PM
Sounds like a good plan to me. Drives me insane that CEOs of failing companies in the US still get their multi-million dollar salaries/bonuses, even if the business goes bankrupt.
This. I like the principle of it. Let's see if the CEOs decide to stick around or not though

IraHays
11-19-2013, 03:49 PM
min wage $8

ceo of biggest company in the world wage $96

not sure if srs. 1:50 maybe.

Yeah, ratio does seem pretty dam low.

I'm not sure if Switzerland is like the US with payroll taxes, combining that with a huge reduction in payroll taxes would pretty much ensure increases.

But one problem is all of a sudden, Jose in the copy room is now making about 2K less then the educated guy in actuarial services. Haha.

Fiyero
11-19-2013, 03:51 PM
Yeah, ratio does seem pretty dam low.

I'm not sure if Switzerland is like the US with payroll taxes, combining that with a huge reduction in payroll taxes would pretty much ensure increases.

But one problem is all of a sudden, Jose in the copy room is now making about 2K less then the educated guy in actuarial services. Haha.How do you figure? If Jose makes 20,000 swiss francs a year, the actuary can make 240,000 a year.

IraHays
11-19-2013, 03:53 PM
How do you figure? If Jose makes $20,000 swiss francs a year, the actuary can make $240,000 a year.

It's for executives, not the entire company. (Unless I missed something). So execs raise the level of the lowest paid so they can cash in, but what about the rest of the employees?

cnoland
11-19-2013, 03:56 PM
My question is, where would the rest of the money go that is already being put in the CEOs pocket currently???

IraHays
11-19-2013, 03:57 PM
My question is, where would the rest of the money go that is already being put in the CEOs pocket currently???

I think that's kind of the point of the law......

IDrinkBloodLOL
11-19-2013, 03:59 PM
Actually a good way to bring up wages. Lol.

All of my this.

Flakker
11-19-2013, 04:01 PM
Actually a good way to bring up wages. Lol.

No, no it's not.


Steve jobs -- 1 dollar...

BUT NOT INBENEFITS! Whooooo how can we get around this law - oh I know - "stock options."

Yup.

IraHays
11-19-2013, 04:02 PM
No, no it's not.



Yup.

Lol, this is true. Always a way.

tsbalr120
11-19-2013, 04:03 PM
Inb4 higher level employees get more stock options, bonds, and other loopholes to replace any lost wages.

It's under a flawed assumption that 12 toilet scrubbers is worth as much as donald trump or steve jobs. Which would you rather have in your company?

Why do these progressives try these crazy ideas to squeeze more money out of it's citizens rather than just cut spending? It's so ****ing simple.


Edit- for income equality, there's jobs that are worth way more than what your average highschool dropout can do.

Edit 2- assumed it was a tax, my bad, this is just telling how much a company can pay it's employees

LMAO

TheCockMongler
11-19-2013, 04:09 PM
Inb4 higher level employees get more stock options, bonds, and other loopholes to replace any lost wages.

It's under a flawed assumption that 12 toilet scrubbers is worth as much as donald trump or steve jobs. Which would you rather have in your company?

Why do these progressives try these crazy ideas to squeeze more money out of it's citizens rather than just cut spending? It's so ****ing simple.


Edit- for income equality, there's jobs that are worth way more than what your average highschool dropout can do.
How the **** are they going to turn 1:236 (current) into 1:12. Seems implausible.

IraHays
11-19-2013, 04:23 PM
Doesn't really define what "pay" means. Could be accounting for options some how.

SpiritFighter
11-19-2013, 04:27 PM
Steve jobs -- 1 dollar...

BUT NOT INBENEFITS! Whooooo how can we get around this law - oh I know - "stock options."

But atleast your 22 inch rims are cool.....

flairon
11-19-2013, 04:32 PM
sounds like bullsh*t.

You doing better isn't accomplished by making everyone around you do worse so that you look better next to them

IDrinkBloodLOL
11-19-2013, 04:35 PM
Hey, just in case nobody crunched the numbers, if you use $10/hr and 40 hrs/week this results in a top pay of 230k.

"Thou shalt not attain independent wealth ever." -Switzerland

Mr Beer
11-19-2013, 05:04 PM
Not a fan of this idea. For start, there is a huge incentive to get around the law, whether with stock or by simply moving headquarters or whatever. Also, the wealthiest people get that way by what they own not what their salary is. This measure is highly inequitable, employees are penalised over business owners. Lastly there is an incentive for execs to simply get paid elsewhere, either by starting their own businesses or moving overseas.

I dislike Enron style execs who simply rape the company at the expense of everyone else but I don't think this is the way to deal with the problem.

Fiyero
11-19-2013, 05:24 PM
"Thou shalt not attain independent wealth ever." -SwitzerlandSwitzerland has one of the highest per capita income rates in the world. There will still be plenty of independent wealth.

flairon
11-19-2013, 05:37 PM
Switzerland has one of the highest per capita income rates in the world. There will still be plenty of independent wealth.

Thats not the point. If there is plenty of it then go earn it yourself, not hamstring everyone else.

hassel35
11-19-2013, 05:44 PM
Not a fan of this idea. For start, there is a huge incentive to get around the law, whether with stock or by simply moving headquarters or whatever. Also, the wealthiest people get that way by what they own not what their salary is. This measure is highly inequitable, employees are penalised over business owners. Lastly there is an incentive for execs to simply get paid elsewhere, either by starting their own businesses or moving overseas.

I dislike Enron style execs who simply rape the company at the expense of everyone else but I don't think this is the way to deal with the problem.

This.

The proposed solution puts a socialism styled cap on earnings and promotes circumvention of the law through loopholes.

Brb if applied to America no one could make mid six figures, let alone 7.

Don't know about you guys but i strive to eventually hit upper echelons of wealth, consider it my rightful reward if i earn it ethically, productively... Would not approve this law being passed anywhere i live.

SAD_COW_DISEASE
11-19-2013, 05:58 PM
Good news for us. Brain drain on them will mean those rich, presumably smarter people will come over and work here.

badbart
11-19-2013, 06:00 PM
Great way to make sure your country has no good CEOs. All this income equally BS is from a bad economy. Its a great way for the Dems to distract the public from crap economy they are presiding over. Get the economy moving and these problems go away. Of course most of you are too blinded by your ideology see this.

tnel00
11-19-2013, 06:11 PM
Good news for us. Brain drain on them will mean those rich, presumably smarter people will come over and work here.

LMAO

Like there won't be loopholes a plenty to get around this

IraHays
11-19-2013, 06:15 PM
LMAO

Like there won't be loopholes a plenty to get around this

Imagine all the extra work you would get!

Jasonw1178
11-19-2013, 06:58 PM
Envy at it's finest. So the rich are what is making the poor, poor. I can show you parts of the world where there are no rich people, and there are poor people everywhere.

So jealous of what others are making. Do they not realize that these rich people are the ones running business and driving the economy. Oh well, they vote for this and they will.

Liff_Wates
11-19-2013, 09:32 PM
This sounds like it would be a nightmare to implement and enforce.

nutsy54
11-19-2013, 09:35 PM
So, it's price controls, combined with dictating your economy & business based on greed, envy, and class warfare...

What could possibly go wrong? :cool:

ZenBowman
11-19-2013, 09:51 PM
Interesting experiment, I wish them well and believe it will succeed in Switzerland.

Bullroarer
11-19-2013, 10:34 PM
Great idea, would be nice to see it succeed, but doubt it will because of the brain drain.