Swiss consumers caught out as real wages fall by 0,8 percent
According to the latest data from the Federal Statistical Office (FSO), nominal wages in Switzerland fell by 0,2 percent in 2021. When added to rising inflation, workers were 0,8 percent more out of pocket in 2021 than the year before.
Salaries decline in Switzerland as cost of living rises
2021 saw the first decline in Swiss salaries since records began in 1942, mostly due to increased applications for unemployment insurance due to people losing their jobs during COVID. As a result, according to the FSO, nominal wages across all sectors fell by 0,2 percent.
Alongside the small decline in wages, inflation rose to 0,6 percent in 2021, a phenomenon the FSO blamed on higher oil prices and the increased cost of renting a house or apartment in Switzerland. In all, employees in the alpine nation experienced a 0,8 percent drop in purchasing power over the last year.
COVID blamed for drop in real wages
According to Didier Froidevaux, Head of Wages and Working Conditions at the FSO, most of the fall in real wages can be blamed on the COVID pandemic. He explained that due to the grim economic forecasts at the time, workers had “a certain reluctance” to negotiate higher salaries in work contracts, meaning that unlike in other events like the global financial crisis and the Second World War, Swiss wages did not keep up with inflation.
Interestingly, the report by the FSO found that while the wages of men declined last year, the wages of women increased significantly. The FSO noted that as men’s real wages fell by 1,3 percent, women’s purchasing power remained largely unchanged.