To see just how far the revolt against fat cat pay has spread, you could do worse than visit a grey building a stone's throw from the open-air market and pavement cafes of the Bärenplatz in the medieval centre of Bern.
There, in the headquarters of Switzerland's Young Socialists (Juso), party workers are preparing for a referendum on 24 November that could see the Swiss vote to stop bosses earning more in a month than their worst-paid employees receive in a year.
The so-called 1:12 campaign is part of a broader drive for wealth redistribution by the Swiss left that has won wide popular support.
Long-standing rumblings about executive excess were fuelled by the banking crisis and the precarious position of the Swiss bank UBS.
But the debate was supercharged this year when the Swiss drug group Novartis agreed to pay its outgoing chairman, Daniel Vasella, SFr72m (£49m). The payment, to persuade Vasella not to use his knowledge to help rival pharmaceuticals, was described as a "golden gag".
There followed a huge public and political backlash, with the Swiss justice minister, Simonetta Sommaruga, saying the payoff was "a huge blow to the social cohesion in our country" and that payouts on such a scale "undermined public trust in the entire economy".
Novartis was forced to cancel the payout. But serious damage was done, and in a referendum the following month more than two-thirds of Swiss voters backed a new rule to ban golden hellos and goodbyes Last month, the authorities paved the way for another vote, which could introduce a minimum wage for the employed and unemployed alike.
Further referendums are planned on inheritance tax and the taxation of wealthy foreigners. "In recent years, we've seen high salaries get higher while other salaries have stayed at much the same level, especially in terms of ordinary people's disposable income," said David Roth, the organiser of the 1:12 campaign. "It has become obvious that something is wrong."
But his arguments are contested by others. The free market thinktank Avenir Suisse concluded in a recent study that the crucial difference was not between the salaries of individuals, but between the incomes of households – and that since more women had joined the workforce, that gap was narrowing.
What no one disputes is that top executives' salaries have skyrocketed.
One of Juso's most striking posters shows the change in the ratio of the average salary among Swiss CEOs to the average wage. In 1984, it was six to one. By 2011, it had reached 43 to one.
What is more, said Roth: "The biggest salaries are in the same places as the biggest problems. Take UBS. The state has had to pour money into UBS because of problems caused by the very people who earned the highest salaries.
Last year, the bank lost SFr2.5bn – and paid out SFr2.5bn in bonuses." His opponents see the pay campaign as a potentially catastrophic assault on the underpinnings of one of the world's freest economies.
"Deciding on wage levels is not a matter for the state," said Rudolf Minsch of Economiesuisse, an umbrella organisation of Swiss firms. "It is one of the key competences of every enterprise. And the freedom of enterprises to determine wages is a key reason for Switzerland's success."
The country is blessed with a jobless rate of 3%; the average in EU-member states its 11%. And, says Minsch, "A flexible labour market is the main driving force behind low unemployment in this country."
He argues that one of the most important reasons for Switzerland's success has been the freedom its companies enjoy to negotiate pay locally, adapting to significant differences in the living standards of its 26 cantons.
Adopting the 1:12 rule would mean imposing a restriction at national level for the first time, setting what Minsch believes would be a hazardous precedent.
Opponents say the move could also prompt Swiss firms to outsource their lowest-paid jobs in order to bring their CEOs' salaries under the new ceiling.
But, said Roth: "You would need to outsource – outside of Switzerland – every single low-paid job in the firm concerned. And you just can't do that.
You can't outsource the work of a bank teller or a shop assistant to India." Another fear is that curbs on executive pay would drive out foreign companies. One of the best-known is in the FTSE 100: the mining and trading firm Glencore Xstrata.
Switzerland might be better off without multinationals like that, said Beat Ringger of the thinktank Denknetz.
"They are in countries where the conditions for workers are poor and the governments are often corrupt. I am sure that sooner or later the international community is going to want to regulate these things and that Switzerland will come under international pressure as a result of having these companies on its territory."
Glencore Xstrata has its headquarters in the canton of Zug where corporate tax is limited to 15.4%. For Ringger, "Switzerland is like a 5-star hotel giving away its best suites for nothing. The biggest companies and the richest individuals get to stay here without paying much tax and without being much regulated."
Those campaigning for a no vote believe that, on the contrary, Switzerland's business-friendly environment is essential to its prosperity.
"In the long term, economic growth is more important for the welfare of the lowest earners than how income is distributed," says the Avenir Suisse study.
"On a per-capita basis, real income has risen by 17.7% since 1998. Everyone has benefited from this growth, but the poorest households have done so disproportionately."
Last month polls were suggesting the vote on 1:12 rule could be close, but in recent days the no campaign – backed by the government and parliament – appears to have turned the tide.
A survey for Swiss television released on Wednesday pointed to a 54% to 36% defeat for the proposal, with 10% so far undecided. Roth complains that "our adversaries have mounted a campaign, in which some of the media have become involved, aiming to stir up fear".
But for Ringger, big business is blackmailing the rest of the population."They are saying: 'If you do anything to harm our interests we will harm you.'"
theguardian.com
There, in the headquarters of Switzerland's Young Socialists (Juso), party workers are preparing for a referendum on 24 November that could see the Swiss vote to stop bosses earning more in a month than their worst-paid employees receive in a year.
The so-called 1:12 campaign is part of a broader drive for wealth redistribution by the Swiss left that has won wide popular support.
Long-standing rumblings about executive excess were fuelled by the banking crisis and the precarious position of the Swiss bank UBS.
But the debate was supercharged this year when the Swiss drug group Novartis agreed to pay its outgoing chairman, Daniel Vasella, SFr72m (£49m). The payment, to persuade Vasella not to use his knowledge to help rival pharmaceuticals, was described as a "golden gag".
There followed a huge public and political backlash, with the Swiss justice minister, Simonetta Sommaruga, saying the payoff was "a huge blow to the social cohesion in our country" and that payouts on such a scale "undermined public trust in the entire economy".
Novartis was forced to cancel the payout. But serious damage was done, and in a referendum the following month more than two-thirds of Swiss voters backed a new rule to ban golden hellos and goodbyes Last month, the authorities paved the way for another vote, which could introduce a minimum wage for the employed and unemployed alike.
Further referendums are planned on inheritance tax and the taxation of wealthy foreigners. "In recent years, we've seen high salaries get higher while other salaries have stayed at much the same level, especially in terms of ordinary people's disposable income," said David Roth, the organiser of the 1:12 campaign. "It has become obvious that something is wrong."
But his arguments are contested by others. The free market thinktank Avenir Suisse concluded in a recent study that the crucial difference was not between the salaries of individuals, but between the incomes of households – and that since more women had joined the workforce, that gap was narrowing.
What no one disputes is that top executives' salaries have skyrocketed.
One of Juso's most striking posters shows the change in the ratio of the average salary among Swiss CEOs to the average wage. In 1984, it was six to one. By 2011, it had reached 43 to one.
What is more, said Roth: "The biggest salaries are in the same places as the biggest problems. Take UBS. The state has had to pour money into UBS because of problems caused by the very people who earned the highest salaries.
Last year, the bank lost SFr2.5bn – and paid out SFr2.5bn in bonuses." His opponents see the pay campaign as a potentially catastrophic assault on the underpinnings of one of the world's freest economies.
"Deciding on wage levels is not a matter for the state," said Rudolf Minsch of Economiesuisse, an umbrella organisation of Swiss firms. "It is one of the key competences of every enterprise. And the freedom of enterprises to determine wages is a key reason for Switzerland's success."
The country is blessed with a jobless rate of 3%; the average in EU-member states its 11%. And, says Minsch, "A flexible labour market is the main driving force behind low unemployment in this country."
He argues that one of the most important reasons for Switzerland's success has been the freedom its companies enjoy to negotiate pay locally, adapting to significant differences in the living standards of its 26 cantons.
Adopting the 1:12 rule would mean imposing a restriction at national level for the first time, setting what Minsch believes would be a hazardous precedent.
Opponents say the move could also prompt Swiss firms to outsource their lowest-paid jobs in order to bring their CEOs' salaries under the new ceiling.
But, said Roth: "You would need to outsource – outside of Switzerland – every single low-paid job in the firm concerned. And you just can't do that.
You can't outsource the work of a bank teller or a shop assistant to India." Another fear is that curbs on executive pay would drive out foreign companies. One of the best-known is in the FTSE 100: the mining and trading firm Glencore Xstrata.
Switzerland might be better off without multinationals like that, said Beat Ringger of the thinktank Denknetz.
"They are in countries where the conditions for workers are poor and the governments are often corrupt. I am sure that sooner or later the international community is going to want to regulate these things and that Switzerland will come under international pressure as a result of having these companies on its territory."
Glencore Xstrata has its headquarters in the canton of Zug where corporate tax is limited to 15.4%. For Ringger, "Switzerland is like a 5-star hotel giving away its best suites for nothing. The biggest companies and the richest individuals get to stay here without paying much tax and without being much regulated."
Those campaigning for a no vote believe that, on the contrary, Switzerland's business-friendly environment is essential to its prosperity.
"In the long term, economic growth is more important for the welfare of the lowest earners than how income is distributed," says the Avenir Suisse study.
"On a per-capita basis, real income has risen by 17.7% since 1998. Everyone has benefited from this growth, but the poorest households have done so disproportionately."
Last month polls were suggesting the vote on 1:12 rule could be close, but in recent days the no campaign – backed by the government and parliament – appears to have turned the tide.
A survey for Swiss television released on Wednesday pointed to a 54% to 36% defeat for the proposal, with 10% so far undecided. Roth complains that "our adversaries have mounted a campaign, in which some of the media have become involved, aiming to stir up fear".
But for Ringger, big business is blackmailing the rest of the population."They are saying: 'If you do anything to harm our interests we will harm you.'"
theguardian.com
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