Public sector worker pay under the microscope

Swisscom boss Urs Schaeppi earned over three times more than a government minister last year. Keystone

More than 8,000 state-owned public service workers are “overpaid”, according to research that tests the possible impact of a Swiss people’s initiative. If the initiative is accepted on June 5, the three main employers affected may have to impose a CHF127.3 million ($130 million) collective wage cut.

One of the aims of the “Pro Public Services” initiative is to restrict wages to the same levels as those earned by civil servants and other people who work directly for the federal administration.

For example, chief executives should not earn more than a government minister (CHF475,000), according to the initiative. Swisscom boss Urs Schaeppi takes home CHF1.8 million while the heads of the Swiss Post and Swiss Federal Railways earn around CHF1 million.

Researchers at Swiss Economics took a deeper look at wages of these three public services, comparing several salary bands with government offices. They identified 8,111 public service employees who could stand to suffer a wage cut after June 5.

This has fed the ire of independent politician Thomas Minder, who successfully pioneered an initiative against “fat cat salaries” in the private sector in 2013. He complained to the Tages-Anzeiger newspaper that small and medium-sized enterprises “can no longer compete” for the best workers with the higher wages paid at public service firms.

But the Swiss Employees Association, TravailSuisse, countered in the newspaper that it was pointless to compare public service company jobs with government workers as they performed different tasks.

That point was also taken up by George Sheldon, an economist at the University of Basel who specialises in the labour market. He pointed out that Swisscom is partly privatised while the financial arm of the post office, PostFinance, is also on track to go private.

“It is very dangerous to compare bureaucrats with someone working for a company that has one foot in the private market,” he told swissinfo.ch. “Do they do exactly the same thing? Do they work in the same environment? Are we really comparing equals?”

Swiss Economics, which was commissioned to do the research by two associations representing alpine regions and municipalities (both opposed to the initiative), also worked out the potential savings to be made should the three largest public service firms trim wages to match government counterparts.

These amounted to 2.5% for Swisscom, 2% for Swiss Post and less than 1.5% for the Federal Railways. The 8,111 affected employees make up 12% of the entire workforce of the three companies combined.

Despite a big gap in pay at the top of each organisation, the wage difference among middle managers in the public sector and government was low, said the report’s main author Christian Jaag.