On Friday, Pierre-Yves Maillard, President of the Swiss Trade Union Federation (USS), told reporters that increasing wages is not only necessary but possible given the economic situation in the country. He cited GDP growth of 2.5% in 2022, export growth of 11.5% in the first half of the year and unemployment at 2%, which is the lowest level in 20 years.
Meanwhile, inflation reached 3.5% in August driven mainly by rising energy and fuel costs. While lower than many other countries, this is higher than Switzerland has seen in years. Health insurance premiums are also on the rise.
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If you are a male banker, a Swiss diplomat or a foreign CEO in Switzerland, chances are you are living quite comfortably.
If wages are not “adjusted to the reality of the increased cost of living now, then when?” said Maillard. The looming purchasing power crisis raises the “risk of unprecedented impoverishment”, he added.
The federation is demanding wage increases of 4 to 5%. This includes compensation for inflation as well as a 1% increase in real wages due to productivity growth and a catching-up of the wage gap of recent years.
The fight for higher wages is expected to face push back from employers. In a statementExternal link mentioned by Swiss public television SRF, Simon Wey, chief economist for the employers’ association, wrote that “the economic upheavals as a result of the war in Ukraine” had thrown the previously flourishing economy off course.
The sharp rise in raw materials and energy prices as well as supply chain problems have created uncertainty for businesses. Wey wrote that there are signs that an economic slowdown could come in the autumn and warned against “exaggerated wage demands”.
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