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Inflation destroys wage hikes in Switzerland

Many displays empty pockets
Swiss wages are not keeping up with inflation. Keystone / Martin Ruetschi

Swiss pay packets decreased by 1.9% in real terms last year as inflation erased wage hikes and further dented spending power.

The Federal Statistical Office (FSO) says the average worker received a 0.9% pay increase in 2022 but saw all of this, and more, wiped out by a 2.8% rise in the cost of goods.

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Wages saw the strongest growth of 4% in the chemical and pharmaceutical production process last year, but other sectors saw a decline in pay even before inflation kicked in.

Employees engaged in the manufacture of rubber and plastic goods saw pay packets shrink by 2.2% while electrical equipment and clock makers had to make do with 0.6% less.

Food production workers saw no nominal wage growth at all in 2022 while the industrial sector only increased salaries by 0.7%.

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Salaries in Switzerland

The cost of living in Switzerland is among the highest in the world, but workers also earn among the highest salaries.

Read more: Salaries in Switzerland

Last year also saw further evidence of pay discrimination between genders: men took home 1.1% more on average and women only 0.8%.

Inflation continues to haunt Switzerland in 2023, with prices rising 3.4% in February year-on-year, despite interest rates being hiked to 1.5%.

A survey by UBS bank in November said Swiss purchasing power has fallen to its lowest level in 80 years – but it paints a more positive picture for wage growth this year.

UBS predicted that the average pay packet will swell 2.2% in 2023. The Swiss National Bank forecasts 2.6% inflation this year, falling to 2% in 2024.

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