Sanity in Switzerland

TVNZ reports:

Swiss voters have rejected a proposal to cap the salaries of top executives at 12 times that of a company’s lowest wage, heeding warnings from industry leaders that the measure could harm the country’s economy.

The wealthy nation, which is home to some of the world’s biggest companies including food group Nestle and commodities giant Glencore Xstrata, voted 66% against imposing the limit, according to a projection from Swiss television.

The so-called “1:12 initiative for fair pay,” was brought about by the youth wing of the Social Democrats (JUSO). The idea behind the proposal was that nobody should earn more in a month than others earn in a year.

Possibly he most economically stupid idea since the 50 year trial of communism.

In a way it is a pity the referendum failed. It would have been hilarious watching the impact on Switzerland if the referendum had passed. Imagine the chaos as companies flee overseas as billion dollar companies can’t pay their chief executives more than say 200,000 euros a year.

Opponents to the proposal had warned it would harm Switzerland by restricting the ability of firms to hire skilled staff, forcing firms to decamp abroad, resulting in a shortfall in social security contributions and higher taxes.

It would have been such a disaster, it would have killed the idea ever being implemented anywhere else. Their tax base would get decimated or worse.