May 21, 2014
Sovereign Valley Farm, Chile
Growing up, you might have heard your mother say at some point,“If all your friends jumped off a cliff, would you do it too?”
It’s that age-old lesson about peer pressure. Parents always want their children to think independently, and not do what everyone else thinks is cool.
But peer pressure isn’t limited to teenagers. Governments are subject to it even more.
And right now, the pressure is mounting around the world for governments to increase taxation and protectionism, starting with the minimum wage.
Heading the gang is the United States, with plans to kick the federal minimum wage up from $7.25 to $10.10. Not that there’s any inflation.
Then there is the UK, following on its heels, which raised its own to £6.50 ($10.92).
Bolivia, trying to show that it too can keep up, raised its minimum wage a startling 20%, while Germany proposed its first national minimum wage at a not so meager 8.50€ ($11.81).
It seems that each country is trying to outdo the others in showing off how extravagantly short-sighted they can be—boasting about their plans to ‘fix’ unemployment by making it less attractive to employ people.
This past weekend in Switzerland, the implementation of what would be the world’s highest minimum wage, at 22 CHF (roughly $25) an hour, was put to a national vote.
The Swiss were faced with the decision—give in to peer pressure and join the gang, or to go their own way.
“Switzerland can afford the additional cost!” said the labor unions. “This won’t hurt employment, because those affected are in sectors that can’t be outsourced!”
It seems their parents never sat them down and gave them “the talk”. You know, the one about where jobs come from. They still believe that jobs magically appear on one’s doorstep, delivered by a stork.
But the truth is, there’s no predestined, set number of jobs. And it’s not really an issue of them being sent elsewhere. Jobs can simply disappear altogether.
High labor costs encourage investment and innovation in technology that aim to take over the need for physical labor. This is a good thing, but you can be sure it’s not what the labor unions had in mind.
Luckily, 76% of Swiss voters heeded their mothers’ warnings, and rejected the introduction of a national minimum wage.
They trusted their common sense rather than the peer pressure around them, voting not to jump off the cliff with the others into economic ruin.
At the same time they also rejected a proposal to buy 22 new fighter jets for the Swiss Air Force.
Today, Switzerland may no longer be a center of innovation, or the international banking center it once was.
But at least the Swiss are keeping up the tradition of remaining strong and neutral, observing from a safe distance as those around them are busy destroying themselves.