Swiss to vote on incomes for all – working or not
Switzerland, one of the world’s wealthiest countries, is engaged in an intense process of soul searching – about money.
This year alone there have been two nationwide referendums on executive pay, one of which approved strict limits on bonuses and banned 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.
A universal basic income sounds very radical, but it is not a new idea – Thomas More proposed it in his work Utopia in the 16th Century.
On the left, universal basic income is thought to be fairer, while on the right it is seen as the policy that would make welfare payments obsolete.
There will be no incentive for young people to learn a job or study”
Rudolf StrahmSwiss economist
For Enno Schmidt, a key supporter of universal basic income, Switzerland is the perfect place, and 2013 the perfect time, to launch a campaign to introduce it.
“Switzerland is the only place in Europe, and maybe in the world, where the people have the right to make something real, [through] direct democracy,” he says.
That system of direct democracy means the Swiss could vote for free beer if they wanted to.
To hold a nationwide referendum, all citizens have to do is gather 100,000 signatures calling for a vote, and the ballot must be held – the result is binding.
The anger among many Swiss voters at the news that some of their biggest banks, such as UBS, had continued paying top executives huge bonuses while also reporting huge losses, has led to a heated debate about salaries, and more widely, about fairness.
In that context, it was easy to gather the 100,000 signatures to hold the vote on universal income, and the government is expected to name a date for the referendum soon.
Swiss business leaders have reacted with dismay, one calling it a “happy land” proposal, the product of a younger generation that has never experienced a major economic recession or widespread unemployment.
Many have also suggested it could provide a major disincentive to working at all, something that could pose problems for Swiss companies already finding it hard to recruit skilled workers.
Mr Schmidt denies this, saying the proposed amount for Switzerland, 2,500 Swiss francs ($2,800; £1,750) a month is scarcely enough to survive on, and that anyway a society in which people work only because they have to have money is “no better than slavery”.
Instead Mr Schmidt argues that universal income would allow people more freedom to decide what they really want to do.
“The thought is not that people will work less, the people are free to decide – more, or less,” he says.
That argument has found some enthusiastic supporters among young Swiss voters.
They have adopted a rather clever campaign technique, borrowing eight million five-centime pieces and displaying them around the country as a symbol that Switzerland can afford to pay its eight million inhabitants a universal income.
‘A risky move’Che Wagner is one of the campaigners. He is 25, studying for a master’s degree at Zurich university and working for a pizza delivery company.
“I have a daughter,” he says, “and so of course I am there for my daughter, I look after her.”
“But it is also a struggle – I have to work, so we can live.
“I think with a basic income I would still have to work, but I could… maybe [also] say, ‘OK let’s spend a week with my daughter.'”
And, when Che and his colleagues dumped their eight million coins outside the Swiss parliament, the politicians inside did not dismiss the campaign out of hand.
The idea goes to the personal question – what are you doing in your life, is it actually what you want do? ”
Che WagnerUniversal income campaigner
“The idea makes sense in a certain way,” says Luzi Stamm, member of parliament for the right-wing Swiss People’s Party.
But Mr Stamm adds, it would be a risky move for Switzerland to take as long as it remains inside Europe’s free movement of people agreement.
“It certainly does not work in a country like Switzerland. In a country which is wealthy, and has open borders it is suicide.”
Meanwhile on the left, economist and former social democrat member of parliament Rudolf Strahm backs a minimum wage but is against a universal income, believing it would undermine the famous Swiss work ethic.
“There will be no incentive for young people to learn a job or study,” he says.
64,000 franc questionSo how much exactly would such a scheme cost?
No-one is offering precise figures, although there is surprisingly little debate about whether Switzerland could afford it – the consensus seems to be that, financially, the scheme would be doable.
Income tax would not necessarily rise, but value added tax – on what people buy rather than what they earn – could rise to 20% or even 30%.
In the long run, supporters say, money might actually be saved because a basic universal income would replace means tested welfare payments.
But the main motivation behind the campaign is not economic but cultural, a bid to make people think more carefully about the nature of life and work.
Mr Wagner points out that the whole debate can make people uncomfortable, presenting them with choices that so far have been unimaginable.
“The idea goes to the personal question – what are you doing in your life, is it actually what you want to do?”