Switzerland is an ‘island of bliss’: State economist

At the end of July the unemployment rate reached an 11-month low at 3.1% © Keystone / Ti-Press

Switzerland’s job market is in a “surprising robust state” compared with other countries, according to the country’s top labour economist. But he warns of an uncertain future.

In an interview with the Schweiz am Sonntag, Boris Zürcher, the head of the labour unit of the State Secretariat for Economic Affairs (SECO), said the state of the strong franc, the economy and the job market have made Switzerland an “island of bliss within a turbulent ocean”.

In January the jobless rate rose to a six-year high of 3.8%, dropping to 3.1% in July, an 11-month low. The European average was 8.6% in May.

The economic repercussions from the strong franc being used as a safe haven currency are easing, he argued, although he admitted it was still being felt in areas. There are 10,000 more unemployed than before the 2015 “Frankenschock” move by the Swiss National Bank to remove the franc-euro peg. But he added: “The main obstacle to export growth now is the global and European economy.”

There is a heightened level of uncertainty globally and the financial system is still fragile following the 2008 crisis, he said.

“Years with a growth rate of less than 1% have had a cumulative effect on Switzerland. It will become more difficult.” But he argued that against this backdrop, Switzerland is well positioned as it possesses the world’s “most educated workforce”, having spent a lot on education and training.

However, ageing baby-boomers are the fastest growing group in the labour market, and their impending retirement from the workforce will create “fundamental upheavals”, cautioned Zürcher. To fill that gap, some immigration is still needed, he argued.