12 ms·

Swiss salary cap fails at ballot box

47 points by alternize 13y ago

allochthon 13y ago
American here, watching from afar. I personally do not mind the socialist overtones of the measure. I think a big problem was that it aimed for an unrealistic ratio (1:12). A ratio that was closer to existing practice might have been more tactically effective. If at first you fail, try, try again (somewhere else)! What I really like about the 1:12 idea is that a more practicable version of it would put in place an incentive for self-interested and self-serving execs and board members to look after the wellbeing of employees in a more substantial way than the "career advancement" programs and similar palliatives that are currently fashionable. At the moment there are few real incentives in place for companies to look after employees, and this feeds into the ghastly and unseemly wage inequality that we're seeing. Obviously there would be an ongoing game of closing loopholes, but that's always been the case with things like taxes, so the difficulty of implementing something like this is not a showstopper in my mind. The worries about talented execs leaving in droves seem to me to be speculative; if anything, I wonder whether companies might benefit from the flight of execs who are there primarily for the extremely generous compensation.
- mtgx 13y ago
  Probably should've been more like 1:20 or 1:30.
  - alternize 13y ago
    "in real life", it would have been closer to 1:21 actually due to the bill's proposed salary span calculations: - calculated based on hourly rate instead of monthly salary - bottom is defined as the top hourly wage of the bottom 10% wages (1:12 => ~1:14) - bottom wages: 40hrs/week vs top wages: 60hrs/week (~1:14 => ~1:21) one pro-bill study therefore calculated only 2500 persons would be affected; their cut salaries would be almost entirely spent on new jobs; only minor insurance/tax losses ; and no company would leave Switzerland - all of which was wishful thinking at best.
Pirate-of-SV 13y ago
"The aim was to reduce the salary gap to a 1:12 ratio – in other words to limit the salaries of top executives based on the annual minimum wage of the lowest paid employee within the same company." Can't you get around that by having a company owning smaller companies? Kind of like a corporate franchise.
- mantas 13y ago
  Or using outsource companies for lowest paid positions. Many companies outsource cleaning, security etc anyway.
- mobweb 13y ago
  I'm sure smart people could've come up with hundreds of ways to get around this new law if it would've been accepted. It would've probably turned into a cat-and-mouse game where the lawmakers would have to keep catching up to new loop holes found by corporations. This is most likely the reason this initiative failed. Most of the people I talked to here in Switzerland that voted against it said they like the idea in theory but it would be pointless to commission the government with trying to limit salaries.
smtddr 13y ago
>> The aim was to reduce the salary gap to a 1:12 ratio – in other words to limit the salaries of top executives based on the annual minimum wage of the lowest paid employee within the same company. I don't know how the law works in Switzerland, but as a hypothetical top-exec in an American company I can think of a way to screw over the little guy. I would not hire anyone below a certain salary range. I'd have those jobs filled with contractors; technically not employees. Thus defeating this law. And as an added bonus I suddenly don't owe a bunch of people health-care benefits either.
- rtpg 13y ago
  Actually if you have "single client" contractors a lot of labor laws will grandfather those employees as "real" employees, and you'll have a lot of back taxes and they'll end up in your employee register. It's exactly to avoid this sort of exploitation. A lot of people don't seem to know about labor protections, unfortunately employees are just as misinformed of their rights as business owners are.
  - Tohhou 13y ago
    Require in the contract that you are not their only client, but lawyer it well. "We only work with contractors with a diverse set of clients as we believe that diversity promotes excellence." Create buffer companies for those contractors to also work for indirectly for you if necessary. You might still have to pay some taxes, but you won't have the same problem as the Swiss salary cap is trying to prevent if it were implemented. There will always be ways to exploit systems. You see it as exploitation, but those running the companies see it as necessary to compete.
    - rtpg 13y ago
      all those extra layers are going to end up making it more costly in some cases. Also, parts of contracts can be invalidated. Just because you put something like that in the contract doesn't mean you're not violating labor laws. Some jobs make more sense to be outsourced, in which case contractors will usually already exist and offer "reasonable" prices that will be cheaper than having a full-time employee around. Other times it doesn't make sense, but employers will try and convince employees to become contractors, so that a lot of employee taxes end up coming out of the employee's side of things. Of course, the employee thinks that this is necessary to keep their job. The construction and taxi industries are very bad at this. It's exploitation, plain and simple.
mortyseinfeld 13y ago
Our fight will continue against fat cat salaries Yeah, that explains it all.
- jstalin 13y ago
  Precisely. It seems it was more motivated by jealousy than any realistic possibility of changing anything. Instead of attempting to attack a symptom of the growing gap between super rich and the rest of us, they should be looking at underlying causes. Hint: regulatory capture and central banking.
  - rayiner 13y ago
    It's utterly unsubstantiated handwaving to assume that income disparity results from regulatory capture or central banking. The basic mechanics of capitalist societies result in winner take all systems in which having more money makes it easier to earn money. Divergence is mathematically assured.
    - jstalin 13y ago
      I like your hand waiving to dismiss hand waving.
    - vdaniuk 13y ago
      You really can't claim that anything is mathematically assured without providing formal proofs. Care to share them?
      - tptacek 13y ago
        It's intuitively obvious. Capital earns returns, generates more capital. If you think of it as a distributed systems problem, it's obvious how it converges.
        vdaniuk 13y ago
        Right. I don't believe in using intuition to reason about complex social systems.
lxmorj 13y ago
It's fairly ignorant to think it's impossible for one employee to be worth more than 12 of another. For example, I imagine Drummond (Google's CLO) provides far more than 12x the value of a new hire.
- fennecfoxen 13y ago
  I also imagine him to be more than 12x as valuable than a janitor (and, if this is Google, a masseuse.)
- wallflower 13y ago
  From the stark monetary perspective, in many large partnership-based corporations (not Google) - it is all about the client money you are directly responsible for bringing in to the firm. Especially in Law. Partners in law/accounting/consulting firms are invited to partnership based on the client business they bring in. And then they have to "buy in". The ratios vary. I recall one Andersen (now Accenture) partner telling me that he brought in about $10M of business. For a Big-4 (or is it Big-3?) accounting firm, the revenue per partner was $2.66 million. [1] Law firms are notorious for PPP. [2] [1] "Total firm revenue was $22 billion and global partnership was 8,280 partners giving a revenue per partner ratio of $2.66 million." [2] http://en.wikipedia.org/wiki/List_of_law_firms_by_profits_per_partner http://en.wikipedia.org/wiki/List_of_law_firms_by_profits_pe...
- rayiner 13y ago
  You're making a couple of assumptions: 1) The value of employees can be measured individually. Say you've got 100 assembly line workers. What's the value of losing an assembly line worker? Almost nothing. What's the value of losing all the assembly line workers, divided by 100? Pretty big number! In the U.S. we tend to define "value generated by an employee" in terms of "marginal cost of replacing the worker" but that's arbitrary. 2) That renumeration should be tied to value generated by the individual employee.
  - KaoruAoiShiho 13y ago
    2) You're saying remove the supply of part of the equation? By this logic my iphone should cost $100,000 because it generated that much value for me. Or I should've paid my accountant closer to 50k instead of the 1k I paid him because that's how much the penalties would've been.
skylan_q 13y ago
Let's say that this passed and became law. With this law in effect, why would I want to work as an executive in Switzerland when I can get much better pay elsewhere?
- allochthon 13y ago
  Because you like living in Switzerland, you love what you do, you make generous compensation and you add value to the company. Quite simple, actually.
  - gaius 13y ago
    But you can do all those things and have as good a quality of life for your family in London or New York or even Paris, for now anyway.
    - allochthon 13y ago
      That's fine -- leave the Swiss company for one in London, New York or Paris. There are ten people who are as talented and qualified as you (nothing personal, this is just the way things work when there is a large candidate pool), whose priorities will be compatible with the position at the Swiss company.
      - stephenbez 13y ago
        If there are ten people who are talented and qualified for the position and willing to work at the low wage, why would the company choose someone for the position where they would have to pay a lot more money? It doesn't compute. Obviously the company believes the higher paid individual brings more value to the company.
        allochthon 13y ago
        why would the company choose someone for the position where they would have to pay a lot more money Because the system of executive pay is self-serving and broken. See http://www.economist.com/node/2121856 http://www.economist.com/node/2121856.
dsego 13y ago
Maybe the inverse (or is it reverse?) is better, the lowest salary can't get below 1/12th of the top salary?
lambda 13y ago
The more interesting referendum that is still pending in Switzerland is the guaranteed monthly income referendum. There is another pending referendum, as yet unscheduled for vote, about paying every Swiss citizen a guaranteed monthly income of 2500 CHF (~$2755). The guaranteed monthly income has long been a proposal for getting rid of a whole host of complicated welfare schemes, which sometimes have perverse incentives that prevent you from getting back to work as they go away if start earning money. The idea is simple; just give everyone a certain basic amount of money, no matter how poor or wealthy. It would be quite a bold move if Switzerland actually implemented it. I have my reservations, but traditional need-based welfare has so many problems, it would be interesting to see if such a dramatic change would actually work.
- acslater00 13y ago
  Agree that it is the more interesting referendum. Tyler Cowen wrote about these sorts of proposals a week ago and I really think he hits the nail on the head. Like many, I'm attracted on an intellectual level to the idea of replacing the thicket of social services and redistribution programs with a single basic income. The problem is I simply can't imagine a world where a real-world government could commit credibly to that sort of policy long term. There's just way too much to be gained by saying, "well the GBI is great, but I think this group does need something a _little_ more than everyone else. And then instead of replacing the thicket, it just becomes part of it, and at that point has very little to recommend it as policy. I also agree it would be interesting to see a country other than mine try it out so we could see the effects play out. Cowen: http://marginalrevolution.com/marginalrevolution/2013/11/what-are-some-of-the-biggest-problems-with-a-guaranteed-annual-income.html http://marginalrevolution.com/marginalrevolution/2013/11/wha...
- patatino 13y ago
  I can tell you this will get like 80% no votes. We voted two years ago if we want 6 weeks of vacations instead of 4 resulting in 66% no votes. Swiss people like to work. We are raised with the believe that work is our strongest asset. I talked to a lot of people about this topic. It's hard even to find one who might consider it even remotely.
patatino 13y ago
I'm from switzerland. We voted yes this year on the "restrictions on fat cat salaries" [1]. And this was a try to hop on the train on people's currently antipathy regarding some top executives in our country. But there are like a dozen ways to get around this. Fortunately we voted no (my opinion). [1] http://www.swissinfo.ch/eng/swiss_news/Voters_accept_restrictions_on_fat_cat_salaries.html?cid=35127030 http://www.swissinfo.ch/eng/swiss_news/Voters_accept_restric...
- tonfa 13y ago
  Foreigner living in Switzerland, the fact that it seems to easy to get around was what was bugging me most. Do you have pointers to arguments pro and cons used during the campaign (in particular why having the execs paid by a different company wouldn't work, and how stock compensation was supposed to work in this scheme)? (in german, english or french)
  - patatino 13y ago
    It's pretty easy to search for these arguments? "in particular why having the execs paid by a different company wouldn't work" this would work. you could just launch a new company with only the ones earning the top salaries. Some say even a holding would suffice. But it looks like this was covered. Btw: my favourite poster during the campaign.. always got hungry :D http://www.handelsblatt.com/images/1-12-initiatve-in-der-schweiz/9114614/3-format3.jpg http://www.handelsblatt.com/images/1-12-initiatve-in-der-sch...
znowi 13y ago
I'm yet to see the day when a proposal that puts the rich at a disadvantage gets passed.
brockers 13y ago
Ben & Jerry's used to have a company policy that limited the pay of top employees to 5x an entry level employee. Of course it was dumb-foundingly stupid and they ultimately had to drop it when they were unable to find a CEO capable of managing a $75 million dollar company for $88,000 a year. The company suffered from mind-boggling mismanagement as some positions remained unfilled for years and were then often filled with grossly incompetent hires who were willing to work for such pay. We no longer live in a manufacturing economy. In service industries the value of an employee is almost entirely reflective of their responsibility and/or the amount of money they bring to a company. Most of you work in software... how much more valuable is a GREAT engineer vs a mediocre engineer... or an awful engineer? This is childish sophomoric ideological baloney based on jealousy, not on need. How many Swiss do you know that are dying of starvation or lack of health care? The world bank says the average income in sub Saharan Africa is a little over $1,300 a year. Maybe we should tie all out incomes to a maximum of 12x THAT number. Would that make the world more fair? Would that actually help anyone in Africa? Would it help economic development or encourage more people to start businesses? It is hard to see this stupid legislation as anything more that rich people in rich countries bitching that someone's Bentley is bigger than their Mercedes.
- dnautics 13y ago
  how about we let the citizenry do whatever we want and force the politicians to take a net salary that is 12x the sub-saharan africa value?
  - brockers 13y ago
    That would have my vote
  - rmc 13y ago
    Because then politicians would be considerably more likely to accept bribes, and only the uber rich, upper class, indenpendently wealthy people would be able to be politicians. The UK used to not pay MPs. In the 19th century there were working class movements for politicians to be paid ( http://en.wikipedia.org/wiki/Chartists http://en.wikipedia.org/wiki/Chartists ), so that working class people would be able to stand in parliament.,
KaoruAoiShiho 13y ago
Am I the only one who actually agrees with this law? In fact I'd go even lower to a 1:5 or 1:3 salary ratio. This way all employees become independent contractors who can set their own hours, they become emancipated from the corporate ladder, they're forced to develop entrepreneurial experience, network, form micro-companies that can work for multiple companies and develop enhanced specialities, have low level workers become CEOs by virtue of necessity, have less job security leading to increased competition and quality among all levels of workers preventing the big company style slide into mediocrity etc, etc. Sounds like a much better system to me. Edit: The analogy I see is like changing from owning your own servers to moving to a cloud/aws-like pay for use model. This sort of change reduces risk and unlocks innovation.
- kudu 13y ago
  Of course it's a wonderful idea, and it would be even better if it applied to contractors. I don't get the HN mindset of "He totally deserves billions of dollars, he threw together a few photo filters and created Instagram! Those poor kids can rot!"
  - iterative 13y ago
    I don't get the statist idea that it's any of your damn business to decide who does and doesn't "deserve" a particular amount of money. Given that free markets have lead to prosperity for average people on a scale that would've been unimaginable a few short centuries ago, while people living in socialist utopias like Cuba and North Korea continue to live in extreme poverty, those who support redistributionist schemes like this are clearly the ones who want to see poor kids rot.
- philwelch 13y ago
  People don't want to be independent contractors.
- jonknee 13y ago
  It's better if you're one of the very small percentage of people that want to run their own micro-company instead of just do their job. What you listed sounds like a ton of overhead (mental and otherwise) for the vast majority of jobs.
logn 13y ago
I think it should have failed. There are too many ways to get around this law by just outsourcing labor, creating subsidiaries, issuing dividends, etc. I think the better approach is marginal tax rates.
overgard 13y ago
This kind of law just invites hacks to work around it. It might sound nice on paper but it will never ever work. I actually agree with the spirit of it, but rather than provide a hard cap, I think it'd make more sense to offer incentives instead. I don't know exactly what the right incentive would be, but off the top of my head I think you could offer tax breaks to companies that have lower salary deltas, or allow executives to make as much money as they want but incentivise investing that money in local swiss ventures.
iterative 13y ago
Anyone who actually thinks this is a good idea should read Thomas Sowell's The Quest for Cosmic Justice (http://www.amazon.com/Quest-Cosmic-Justice-Thomas-Sowell/dp/0684864630 http://www.amazon.com/Quest-Cosmic-Justice-Thomas-Sowell/dp/...), and everything else Sowell wrote, and Hayek and von Mises, and Friedman and all the other economists who've long since debunked this kind of idiocy . . .

47 points by alternize 13y ago

American here, watching from afar. I personally do not mind the socialist overtones of the measure. I think a big problem was that it aimed for an unrealistic ratio (1:12). A ratio that was closer to existing practice might have been more tactically effective. If at first you fail, try, try again (somewhere else)! What I really like about the 1:12 idea is that a more practicable version of it would put in place an incentive for self-interested and self-serving execs and board members to look after the wellbeing of employees in a more substantial way than the "career advancement" programs and similar palliatives that are currently fashionable. At the moment there are few real incentives in place for companies to look after employees, and this feeds into the ghastly and unseemly wage inequality that we're seeing. Obviously there would be an ongoing game of closing loopholes, but that's always been the case with things like taxes, so the difficulty of implementing something like this is not a showstopper in my mind. The worries about talented execs leaving in droves seem to me to be speculative; if anything, I wonder whether companies might benefit from the flight of execs who are there primarily for the extremely generous compensation.

mtgx 13y ago
Probably should've been more like 1:20 or 1:30.
- alternize 13y ago
  "in real life", it would have been closer to 1:21 actually due to the bill's proposed salary span calculations: - calculated based on hourly rate instead of monthly salary - bottom is defined as the top hourly wage of the bottom 10% wages (1:12 => ~1:14) - bottom wages: 40hrs/week vs top wages: 60hrs/week (~1:14 => ~1:21) one pro-bill study therefore calculated only 2500 persons would be affected; their cut salaries would be almost entirely spent on new jobs; only minor insurance/tax losses ; and no company would leave Switzerland - all of which was wishful thinking at best.

Pirate-of-SV 13y ago

"The aim was to reduce the salary gap to a 1:12 ratio – in other words to limit the salaries of top executives based on the annual minimum wage of the lowest paid employee within the same company." Can't you get around that by having a company owning smaller companies? Kind of like a corporate franchise.

mantas 13y ago
Or using outsource companies for lowest paid positions. Many companies outsource cleaning, security etc anyway.
mobweb 13y ago
I'm sure smart people could've come up with hundreds of ways to get around this new law if it would've been accepted. It would've probably turned into a cat-and-mouse game where the lawmakers would have to keep catching up to new loop holes found by corporations. This is most likely the reason this initiative failed. Most of the people I talked to here in Switzerland that voted against it said they like the idea in theory but it would be pointless to commission the government with trying to limit salaries.

smtddr 13y ago

>> The aim was to reduce the salary gap to a 1:12 ratio – in other words to limit the salaries of top executives based on the annual minimum wage of the lowest paid employee within the same company. I don't know how the law works in Switzerland, but as a hypothetical top-exec in an American company I can think of a way to screw over the little guy. I would not hire anyone below a certain salary range. I'd have those jobs filled with contractors; technically not employees. Thus defeating this law. And as an added bonus I suddenly don't owe a bunch of people health-care benefits either.

rtpg 13y ago
Actually if you have "single client" contractors a lot of labor laws will grandfather those employees as "real" employees, and you'll have a lot of back taxes and they'll end up in your employee register. It's exactly to avoid this sort of exploitation. A lot of people don't seem to know about labor protections, unfortunately employees are just as misinformed of their rights as business owners are.
- Tohhou 13y ago
  Require in the contract that you are not their only client, but lawyer it well. "We only work with contractors with a diverse set of clients as we believe that diversity promotes excellence." Create buffer companies for those contractors to also work for indirectly for you if necessary. You might still have to pay some taxes, but you won't have the same problem as the Swiss salary cap is trying to prevent if it were implemented. There will always be ways to exploit systems. You see it as exploitation, but those running the companies see it as necessary to compete.
  - rtpg 13y ago
    all those extra layers are going to end up making it more costly in some cases. Also, parts of contracts can be invalidated. Just because you put something like that in the contract doesn't mean you're not violating labor laws. Some jobs make more sense to be outsourced, in which case contractors will usually already exist and offer "reasonable" prices that will be cheaper than having a full-time employee around. Other times it doesn't make sense, but employers will try and convince employees to become contractors, so that a lot of employee taxes end up coming out of the employee's side of things. Of course, the employee thinks that this is necessary to keep their job. The construction and taxi industries are very bad at this. It's exploitation, plain and simple.

mortyseinfeld 13y ago

Our fight will continue against fat cat salaries Yeah, that explains it all.

jstalin 13y ago
Precisely. It seems it was more motivated by jealousy than any realistic possibility of changing anything. Instead of attempting to attack a symptom of the growing gap between super rich and the rest of us, they should be looking at underlying causes. Hint: regulatory capture and central banking.
- rayiner 13y ago
  It's utterly unsubstantiated handwaving to assume that income disparity results from regulatory capture or central banking. The basic mechanics of capitalist societies result in winner take all systems in which having more money makes it easier to earn money. Divergence is mathematically assured.
  - jstalin 13y ago
    I like your hand waiving to dismiss hand waving.
  - vdaniuk 13y ago
    You really can't claim that anything is mathematically assured without providing formal proofs. Care to share them?
    - tptacek 13y ago
      It's intuitively obvious. Capital earns returns, generates more capital. If you think of it as a distributed systems problem, it's obvious how it converges.
      - vdaniuk 13y ago
        Right. I don't believe in using intuition to reason about complex social systems.

lxmorj 13y ago

It's fairly ignorant to think it's impossible for one employee to be worth more than 12 of another. For example, I imagine Drummond (Google's CLO) provides far more than 12x the value of a new hire.

fennecfoxen 13y ago
I also imagine him to be more than 12x as valuable than a janitor (and, if this is Google, a masseuse.)
wallflower 13y ago
From the stark monetary perspective, in many large partnership-based corporations (not Google) - it is all about the client money you are directly responsible for bringing in to the firm. Especially in Law. Partners in law/accounting/consulting firms are invited to partnership based on the client business they bring in. And then they have to "buy in". The ratios vary. I recall one Andersen (now Accenture) partner telling me that he brought in about $10M of business. For a Big-4 (or is it Big-3?) accounting firm, the revenue per partner was $2.66 million. [1] Law firms are notorious for PPP. [2] [1] "Total firm revenue was $22 billion and global partnership was 8,280 partners giving a revenue per partner ratio of $2.66 million." [2] http://en.wikipedia.org/wiki/List_of_law_firms_by_profits_per_partner http://en.wikipedia.org/wiki/List_of_law_firms_by_profits_pe...
rayiner 13y ago
You're making a couple of assumptions: 1) The value of employees can be measured individually. Say you've got 100 assembly line workers. What's the value of losing an assembly line worker? Almost nothing. What's the value of losing all the assembly line workers, divided by 100? Pretty big number! In the U.S. we tend to define "value generated by an employee" in terms of "marginal cost of replacing the worker" but that's arbitrary. 2) That renumeration should be tied to value generated by the individual employee.
- KaoruAoiShiho 13y ago
  2) You're saying remove the supply of part of the equation? By this logic my iphone should cost $100,000 because it generated that much value for me. Or I should've paid my accountant closer to 50k instead of the 1k I paid him because that's how much the penalties would've been.

skylan_q 13y ago

Let's say that this passed and became law. With this law in effect, why would I want to work as an executive in Switzerland when I can get much better pay elsewhere?

allochthon 13y ago
Because you like living in Switzerland, you love what you do, you make generous compensation and you add value to the company. Quite simple, actually.
- gaius 13y ago
  But you can do all those things and have as good a quality of life for your family in London or New York or even Paris, for now anyway.
  - allochthon 13y ago
    That's fine -- leave the Swiss company for one in London, New York or Paris. There are ten people who are as talented and qualified as you (nothing personal, this is just the way things work when there is a large candidate pool), whose priorities will be compatible with the position at the Swiss company.
    - stephenbez 13y ago
      If there are ten people who are talented and qualified for the position and willing to work at the low wage, why would the company choose someone for the position where they would have to pay a lot more money? It doesn't compute. Obviously the company believes the higher paid individual brings more value to the company.
      - allochthon 13y ago
        why would the company choose someone for the position where they would have to pay a lot more money Because the system of executive pay is self-serving and broken. See http://www.economist.com/node/2121856 http://www.economist.com/node/2121856.

dsego 13y ago

Maybe the inverse (or is it reverse?) is better, the lowest salary can't get below 1/12th of the top salary?

lambda 13y ago

The more interesting referendum that is still pending in Switzerland is the guaranteed monthly income referendum. There is another pending referendum, as yet unscheduled for vote, about paying every Swiss citizen a guaranteed monthly income of 2500 CHF (~$2755). The guaranteed monthly income has long been a proposal for getting rid of a whole host of complicated welfare schemes, which sometimes have perverse incentives that prevent you from getting back to work as they go away if start earning money. The idea is simple; just give everyone a certain basic amount of money, no matter how poor or wealthy. It would be quite a bold move if Switzerland actually implemented it. I have my reservations, but traditional need-based welfare has so many problems, it would be interesting to see if such a dramatic change would actually work.

acslater00 13y ago
Agree that it is the more interesting referendum. Tyler Cowen wrote about these sorts of proposals a week ago and I really think he hits the nail on the head. Like many, I'm attracted on an intellectual level to the idea of replacing the thicket of social services and redistribution programs with a single basic income. The problem is I simply can't imagine a world where a real-world government could commit credibly to that sort of policy long term. There's just way too much to be gained by saying, "well the GBI is great, but I think this group does need something a _little_ more than everyone else. And then instead of replacing the thicket, it just becomes part of it, and at that point has very little to recommend it as policy. I also agree it would be interesting to see a country other than mine try it out so we could see the effects play out. Cowen: http://marginalrevolution.com/marginalrevolution/2013/11/what-are-some-of-the-biggest-problems-with-a-guaranteed-annual-income.html http://marginalrevolution.com/marginalrevolution/2013/11/wha...
patatino 13y ago
I can tell you this will get like 80% no votes. We voted two years ago if we want 6 weeks of vacations instead of 4 resulting in 66% no votes. Swiss people like to work. We are raised with the believe that work is our strongest asset. I talked to a lot of people about this topic. It's hard even to find one who might consider it even remotely.

patatino 13y ago

I'm from switzerland. We voted yes this year on the "restrictions on fat cat salaries" [1]. And this was a try to hop on the train on people's currently antipathy regarding some top executives in our country. But there are like a dozen ways to get around this. Fortunately we voted no (my opinion). [1] http://www.swissinfo.ch/eng/swiss_news/Voters_accept_restrictions_on_fat_cat_salaries.html?cid=35127030 http://www.swissinfo.ch/eng/swiss_news/Voters_accept_restric...

tonfa 13y ago
Foreigner living in Switzerland, the fact that it seems to easy to get around was what was bugging me most. Do you have pointers to arguments pro and cons used during the campaign (in particular why having the execs paid by a different company wouldn't work, and how stock compensation was supposed to work in this scheme)? (in german, english or french)
- patatino 13y ago
  It's pretty easy to search for these arguments? "in particular why having the execs paid by a different company wouldn't work" this would work. you could just launch a new company with only the ones earning the top salaries. Some say even a holding would suffice. But it looks like this was covered. Btw: my favourite poster during the campaign.. always got hungry :D http://www.handelsblatt.com/images/1-12-initiatve-in-der-schweiz/9114614/3-format3.jpg http://www.handelsblatt.com/images/1-12-initiatve-in-der-sch...

znowi 13y ago

I'm yet to see the day when a proposal that puts the rich at a disadvantage gets passed.

brockers 13y ago

Ben & Jerry's used to have a company policy that limited the pay of top employees to 5x an entry level employee. Of course it was dumb-foundingly stupid and they ultimately had to drop it when they were unable to find a CEO capable of managing a $75 million dollar company for $88,000 a year. The company suffered from mind-boggling mismanagement as some positions remained unfilled for years and were then often filled with grossly incompetent hires who were willing to work for such pay. We no longer live in a manufacturing economy. In service industries the value of an employee is almost entirely reflective of their responsibility and/or the amount of money they bring to a company. Most of you work in software... how much more valuable is a GREAT engineer vs a mediocre engineer... or an awful engineer? This is childish sophomoric ideological baloney based on jealousy, not on need. How many Swiss do you know that are dying of starvation or lack of health care? The world bank says the average income in sub Saharan Africa is a little over $1,300 a year. Maybe we should tie all out incomes to a maximum of 12x THAT number. Would that make the world more fair? Would that actually help anyone in Africa? Would it help economic development or encourage more people to start businesses? It is hard to see this stupid legislation as anything more that rich people in rich countries bitching that someone's Bentley is bigger than their Mercedes.

dnautics 13y ago
how about we let the citizenry do whatever we want and force the politicians to take a net salary that is 12x the sub-saharan africa value?
- brockers 13y ago
  That would have my vote
- rmc 13y ago
  Because then politicians would be considerably more likely to accept bribes, and only the uber rich, upper class, indenpendently wealthy people would be able to be politicians. The UK used to not pay MPs. In the 19th century there were working class movements for politicians to be paid ( http://en.wikipedia.org/wiki/Chartists http://en.wikipedia.org/wiki/Chartists ), so that working class people would be able to stand in parliament.,

KaoruAoiShiho 13y ago

Am I the only one who actually agrees with this law? In fact I'd go even lower to a 1:5 or 1:3 salary ratio. This way all employees become independent contractors who can set their own hours, they become emancipated from the corporate ladder, they're forced to develop entrepreneurial experience, network, form micro-companies that can work for multiple companies and develop enhanced specialities, have low level workers become CEOs by virtue of necessity, have less job security leading to increased competition and quality among all levels of workers preventing the big company style slide into mediocrity etc, etc. Sounds like a much better system to me. Edit: The analogy I see is like changing from owning your own servers to moving to a cloud/aws-like pay for use model. This sort of change reduces risk and unlocks innovation.

kudu 13y ago
Of course it's a wonderful idea, and it would be even better if it applied to contractors. I don't get the HN mindset of "He totally deserves billions of dollars, he threw together a few photo filters and created Instagram! Those poor kids can rot!"
- iterative 13y ago
  I don't get the statist idea that it's any of your damn business to decide who does and doesn't "deserve" a particular amount of money. Given that free markets have lead to prosperity for average people on a scale that would've been unimaginable a few short centuries ago, while people living in socialist utopias like Cuba and North Korea continue to live in extreme poverty, those who support redistributionist schemes like this are clearly the ones who want to see poor kids rot.
philwelch 13y ago
People don't want to be independent contractors.
jonknee 13y ago
It's better if you're one of the very small percentage of people that want to run their own micro-company instead of just do their job. What you listed sounds like a ton of overhead (mental and otherwise) for the vast majority of jobs.

logn 13y ago

I think it should have failed. There are too many ways to get around this law by just outsourcing labor, creating subsidiaries, issuing dividends, etc. I think the better approach is marginal tax rates.

overgard 13y ago

This kind of law just invites hacks to work around it. It might sound nice on paper but it will never ever work. I actually agree with the spirit of it, but rather than provide a hard cap, I think it'd make more sense to offer incentives instead. I don't know exactly what the right incentive would be, but off the top of my head I think you could offer tax breaks to companies that have lower salary deltas, or allow executives to make as much money as they want but incentivise investing that money in local swiss ventures.

iterative 13y ago

Anyone who actually thinks this is a good idea should read Thomas Sowell's The Quest for Cosmic Justice (http://www.amazon.com/Quest-Cosmic-Justice-Thomas-Sowell/dp/0684864630 http://www.amazon.com/Quest-Cosmic-Justice-Thomas-Sowell/dp/...), and everything else Sowell wrote, and Hayek and von Mises, and Friedman and all the other economists who've long since debunked this kind of idiocy . . .