High Swiss labour costs offset by strong productivity

Wage/productivity graphic: Oct 2000 swissinfo.ch

Swiss workers may be among the most costly in the world, but they are worth every centime, according to a new study.

The survey by UBS financial services group, says Swiss productivity has improved, and its workers are the second most productive in the world, behind Norway, but ahead of the United States, Japan and Denmark.

The survey finds they are also very expensive to employ. The cost of an average hour of work in Switzerland is SFr36.20, placing the country fourth in the labour cost league after West Germany (SFr40.30), Norway (SFr37.90), and Denmark (36.40).

Contributing to the cost burden are paid holidays, employer contributions to social insurances, and guaranteed salary payments in case of illness. These costs represent 53 per cent of the hourly wage. However, they are still lower than the international average.

The study says high productivity acts as a counterweight to the high labour costs in absolute terms in Swiss industry. It also points out that the high level of education of Swiss workers is reflected in the production of top-quality products.

Another factor to be taken into consideration, says the study, is that working hours are longer in Switzerland than in other European countries.

The average worker in Zurich, for example, puts in 1,868 hours a year, compared to the average 1,666 in Berlin and 1,587 in Paris. Based on the 35-hour working week, that means workers in Zurich spend more than two months more a year at work than their counterparts in Berlin and Paris.

Measured against labour costs, the competitiveness of Swiss industry has improved recently because of moderate salary increases.

However, the report underlines that an international comparison of competitiveness can only be made if other influences are taken into consideration, for example exchange rates and other production factors.

swissinfo with agencies