Swiss salaries rise at record rate, but fail to keep up with inflation

A new report by Travail.Suisse has concluded that while salaries in Switzerland are increasing at a rate unseen for 20 years, very few companies have done enough to keep up with the rising cost of living. Swiss workers are expected to see their wages rise by 2,5 percent on average next year, which the organisation argues won’t be enough to combat inflation.

Salaries in Switzerland rise at fastest rate for 20 years

With most union salary negotiations complete, Travail.Suisse - the umbrella organisation for unions in Switzerland - concluded that it has had mixed success in trying to raise the pay of workers. The organisation confirmed that salaries are set to rise by 2,5 percent on average in 2023, the largest wage increase in Switzerland since 2002. Data showed that 56 percent of Swiss companies raised salaries across the board, while 41 percent promised increases in individual work contracts.

The largest wage rises were handed out in watchmaking, railway construction and carpentry. On the flip side, retail, timber, painters and workers in Swiss healthcare saw their pay rise slower than in other industries.

However, Switzerland to have worst cost of living squeeze for 80 years

Despite the wage rises, Travail.Suisse noted that families and individuals “will have to cope with an increase in the cost of living of 3,5 to 4 percent this year. This corresponds to the sharpest decline in purchasing power in the last 80 years.” The organisation accused the government of not doing enough to ease the financial pressure on residents - the Federal Council said in August that it wouldn’t be doing anything to combat the cost of living.

In a statement, given to Swissinfo, the head of economic policy at Travail.Suisse, Thomas Bauer, said that those who spend between 70 and 100 percent of their monthly income will be most impacted by the price rises, with the cost of living for the poorest 30 percent rising by 4 percent a year. For higher earners, on the other hand, the union found that the cost of living will only increase by 2 percent.

Bauer said that “too many employers have shown themselves to be tight-fisted and not prepared to compensate for the entire increase in prices.” He said that amid a positive economic outlook, where Switzerland is expected to avoid a recession, not enough has been done to cushion the financial situation for workers.