Purchasing power has been declining in many industries for years: why are our wages not rising?

class=”sc-cffd1e67-0 iQNQmc”>

The Federal Statistical Office has analyzed the wages of Swiss people. The average wage increased by 1.8 percent between 2020 and 2022 – ​​to 6,788 francs. An income increase sounds great. Yet it barely made it into my wallet. Because inflation was higher, the purchasing power of the average wage fell by 1.5 percent. The bottom line is that people in Switzerland had less money left at the end of the month.

Director of the employers’ association Roland Müller (60) spoke to the media on Tuesday about “substantial wage growth”. He defended the mini-wage increase of almost two percent with the “crisis environment”. Corona, supply bottlenecks, increased energy prices and the war in Ukraine have made doing business considerably more difficult for companies in recent years.

“More and more households can hardly make ends meet”

For trade union economist Daniel Lampart (55), the wage increases are far too low: “In combination with the premium shock for health insurers, more and more households are having difficulty making ends meet.” It is particularly frightening that workers in postal and courier services, for example, had nominally lower wages in 2022 than in 2010. In the chemical, metal and electrical industries, real wages for people without management positions also fell between 2018 and 2022.

The employers’ organization also does not deny the loss of real wages. Employees were particularly affected by high inflation in the years before 2022, says director Roland Müller.

Inflation has also hit businesses

Michael Siegenthaler (38), labor market expert at the Economic Research Center (KOF) of ETH Zurich, explains: “As goods abroad and especially energy became more expensive, we had imported inflation. This means: inflation has hit both companies and employees.” As a result, they would also have had higher costs and therefore no money for wage increases for their employees.

Moreover, in the ten years before Corona we usually had inflation of around zero percent in Switzerland. “So people had become used to stable prices. After Corona, it took a while before we got inflation under control again,” says Siegenthaler. Because: Wages in Switzerland are usually adjusted in the autumn to the inflation rate of the previous year. They therefore react to inflation with a delay.

KOF expects real wage increases

However, the labor market expert also says that the shortage of skilled workers has actually contributed to wage growth. However, employees mainly benefit from the shortage of skilled labor when they change companies. “Then they can negotiate larger pay increases than is possible within the same company. “But that has not happened very often in Switzerland in the past two years,” Siegenthaler explains.

The KOF expects wage growth of two percent this year. This would likely result in a small increase in real wages. Before 2025, real wages would probably increase by half a percent to one percent. The greatest uncertainty is the development of inflation. If another energy shock were to occur, it could have a major impact on real wages.

Source:Blick