Switzerland Prepares To Vote On An Incredibly Radical Plan To Fight Inequality
On Sunday afternoon we will find out if Switzerland will go ahead with one of the most radical plans to fight inequality ever: Limiting the monthly pay of top executives to that of their lowest paid employees' yearly salary.
Limiting compensation to 1:12 would be a historic change: Currently, a lot of Swiss firms have a ratio of more than 100:1. Roche, the Swiss drug giant, reportedly paid its top executive $13.9 million in 2012, and its lowest $59,000 — a ratio of 1:236.
This isn't just a Swiss thing either. One study has shown that the average American CEO earns 200 times the salary of their lowest paid employee.
The idea was proposed through Switzerland's direct democracy system, and if more than 50% of voters and representatives of the Swiss federal states (cantons) agree to it, it must become law. Voters have had a month to vote via post, and on Sunday they can attend polling stations.
It's fascinating to wonder what a country with a 1:12 salary cap would look like. David Roth, the leader of the youth wing of Swiss party the Social Democrats, and one of the architects of the plan, recently told Business Insider that he expected that salaries would go down, and then the money would be spent on lower paid workers and investing in the companies. On the other hand, however, Swiss executives had warned that their companies would leave the country if the bill passed (Roth said that such an attitude was "quite arrogant").
Of course, such a plan is a long shot — Business Insider recently spoke to a number of experts on Swiss politics, and none of them thought the bill would pass. One recent poll says that the yes votes stand at 36%, which would mean a clear defeat.
Still, Sunday afternoon will see a lot of eyes on Switzerland. The Swiss will either have one of the most radical egalitarian policies in the world, or, they won't.