Young activists in Switzerland have plutocrats hyperventilating -- and spending a fortune to beat back a ballot initiative that would establish a legal limit on the pay gap between top execs and their workers.
reprinted from TooMuchOnline.org
Young activists in Switzerland have plutocrats
hyperventilating -- and spending a fortune to beat back a ballot
initiative that would establish a legal limit on the pay gap
between top execs and their workers.
Something astounding is happening in Switzerland. For the first
time ever, voters in a modern developed nation are going to be
voting on whether to create what essentially amounts to a "maximum
The vote will come this Sunday, November 24, on a ballot initiative that bans any Swiss
corporate executive compensation that runs over 12 times worker
In effect, under this " 1:12 Initiative for Fair Pay," no
Swiss company would be able to pay its top executives more in a
month than the company's lowest-paid workers make in a year.
Swiss corporations currently compensate their top
execs more generously than any other nation in
continental Europe. At pharmaceutical giant Roche, CEO payruns 236 times the firm's lowest wage. At
Nestle, the divide spreads 188 times.
Gross margins like these four years ago
caught the attention of activists in Juso, the youth wing of
Switzerland's Social Democratic Party. The activists sensed growing
public outrage at a corporate pay system that has, as former Juso
president CÃ©dric Wermuth recently told Too
Much, "greedy managers earning millions while other people
earn too little for living."
Juso decided to challenge corporate
pay inequality head-on, through Switzerland's "direct democracy"
initiative process. Under current Swiss law, propositions that gain
100,000 signatures can trigger a national referendum.
The " 1:12 " initiative that Wermuth and his Juso vice-president
Mattea Meyer organized would go on to gain broad union support and
backing from Switzerland's top two progressive parties, the Social
Democrats and the Greens.
This past spring, the 1:12 effort filed enough
signatures for ballot status -- and Corporate Switzerland has been
feverishly attacking the initiative ever since.
Any move to limit CEO pay to 12 times
worker pay, charges SwissHoldings, the federation of
Swiss-based multinationals, would constitute "a frontal attack on
freedom" -- and "prosperity," too! If the measure passes, the
SwissHoldings anti- 1:12 manifesto declares, "almost all" of
Switzerland's 57 corporate giants "would be forced to restructure
or move parts of their companies abroad."
One Swiss lawmaker, Zurich's Ruedi Noser, has ratcheted up the
hysterics to an even higher level. A "yes" vote on the 1:12
proposition, he's claiming, would turn Switzerland into the
"North Korea of Europe."
But Swiss society, 1:12 supporters counter, has
functioned quite successfully in the not-so-distant past with quite
narrow gaps between executive and worker compensation. In 1984,
points out the Swiss Denknetz think tank, CEOs in
Switzerland only averaged six times more in pay than
average Swiss workers.
Many Swiss today still remember those more
equal times, one reason why headlines about 21st century executive
paydays -- like the $100.5 million Credit Suisse CEO Brady
Dougan grabbed in 2010 -- so infuriate the general public.
In 2007, Swiss chief execs nationwide averaged 56 times more than average worker
pay. But big companies pay their execs far more, the Swiss trade
union federation points out, and these execs desperately want
their gravy trains to continue. Nestle, the drugmaker Novartis, and
other Swiss companies have been bombarding their employees with
letters decrying the dangers 1:12 poses.
Swiss corporate execs unleashed a similar political blitz
earlier this year when corporate gadfly Thomas Minder, a successful
entrepreneur, led a campaign to give shareholders more say over top
executive pay -- and ban executive new-hire and "golden parachute"
Swiss multinationals bitterly opposed Minder's proposal. But his
initiative passed anyway this past March, with a stunning 67.9 percent of the vote.
Corporate interests don't have to reveal
how many millions they're pouring into the campaign to kill
the 1:12 initiative, and some observers are estimating
that initiative opponents may be outspending supporters by as much
as 50 times.
Adding to the huge drumbeat against 1:12 : official opposition from Switzerland's
Federal Council, the country's ministerial cabinet. The Swiss
media, meanwhile, have been overwhelmingly hostile as well.
"No major Swiss newspaper is supporting the 1:12
initiative," Juso activist Mattea Meyer tells Too
Much, and only about 15 percent of major media coverage, she
estimates, has been friendly to the pay cap effort.
Remarkably enough, given this deeply unequal
political playing field, the 1:12 initiative has remained
competitive in the opinion polls. In October, one survey had the
measure in a virtual dead-heat, with 44 percent both pro and con.
Polling released last week does have the "no" side gaining ground,
and passage this Sunday , observers feel, remains a longshot. But
however the vote goes, activist CÃ©dric Wermuth
stresses, egalitarians have made substantial progress.
"We've launched," he notes, "a major debate about wage equality
and a just income distribution, a subject regarded as taboo
Advocates for the 1:12
initiative see their effort as part of a
broader "strategic counter-project" to reverse top 1
percent-friendly rule changes that have made Switzerland so much
less equal over recent decades, and next steps are filling the
Swiss referendum pipeline.
Among these next steps: an initiative to create a basic minimum
income for everyone in Switzerland -- at the equivalent of $2,800 a
month -- and campaigns to put in place both a stiff inheritance tax
and a new tax on foreigners using Switzerland as a tax haven.
Switzerland's 1:12 activists also see themselves as
part of a global effort, and 1:12 -like campaigns, they note
proudly, have taken root in France and Germany.
"We stay in close contact with them," says CÃ©dric
Wermuth, who currently serves as a member of Switzerland's federal
The Swiss 1:12 activists are
also staying in close contact with leading global egalitarian
thinkers. They've hosted talks in Zurich, Basel, and Bern, for
instance, from the British epidemiologist Richard Wilkinson, one of
the world's foremost authorities on the impact of
inequality on our daily lives.
The 1:12 effort, Wilkinson told Too
Much last week, has already made a major contribution --
by helping the entire world understand that businesses "do not have
to be organized as systems for the undemocratic concentration of
wealth and power."
Sam Pizzigati is an Associate Fellow, Institute for Policy Studies
Editor, Too Much , an online weekly on excess and inequality
Author, The Rich Don't Always Win:
The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970 (November 2012)