Recently Geneva Switzerland voted to make the minimum wage 23 Swiss francs which is equivalent to $25 U.S dollars. This seemed like a very staggering rate since the United States has a minimum wage of about $7.50. However Geneva is one of the most expensive places to live in the world. It ranks 10th on the most expensive cities in the world. Some believed this was a necessary measure because unemployment is such a big risk for low income workers. If they loose their jobs it could cost them the food they eat. They do not have the ability to save for the future. The idea of raising the minimum wage is not a new one as it was proposed twice before. However with the devastation of the coronavirus, the measure was able to pass this time around. It will be interesting I think to see if the cost of living will increase now that the minimum wage has increased.
https://www.cnn.com/2020/10/03/world/geneva-switzerland-minimum-wage-trnd/index.html
By increasing the minimum wage to 23 Swiss francs, I think that it is likely that Geneva Switzerland will see an increase in the cost of living. This is because with the increased wage rate, now it will cost companies more to produce goods and services, likely translating to increased prices for consumers to buy those goods and services. Furthermore, if a company can not absorb the cost of the higher wages through increased prices and productivity, these companies may have to resort to reducing their workforce, which is counterintuitive to what Geneva is attempting to do by raising the minimum wage. I think it will be interesting to see what ultimately ends up happening there now that the minimum wage was raised.
ReplyDeleteI agree that they will see an increase living costs considering the minimum wage cost has gone up. Although the pandemic prevented the idea from coming into effect, I'm sure it will be discussed as a possibility again.
ReplyDeleteI believe the cost of living will increase due to the increase in minimum wage.
ReplyDeleteI agree with what everyone else has said, cost of living should push prices up since production costs will now be higher. It is an interesting time to raise minimum wage since unemployment rates are high worldwide. Switzerland is only at 3.2% unemployment, but that is the highest rate since before 2018. A smaller number of jobs are available when minimum wage is increased, so it will be interesting to see how Switzerland's unemployment rates respond to this
ReplyDeleteI am interested to see if companies in Switzerland begin to replace low-skilled workers with AI. I think that unemployment could increase if businesses find a way to replace humans.
ReplyDeleteThe cost of living might increase due to the increase in minimum wage, but some prices of some thing in some places would still remain constant with only increase in taxes. This also suggests that the country is doing better off than other countries since its minimum wage means that the money people earn there, would be able to buy more stuff elsewhere in the world.
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