Switzerland's long-term unemployed are being given the chance to return to the job market through low-paid work schemes helping them back on their feet.
The pioneering Foundation for Work project in canton St Gallen, will be copied in Zurich city next year, but trade unions fear such schemes could lead to wage dumping.
Foundation for Work has been judged a success story since its inception in 1997, getting people who have been jobless for years back into work and saving the authorities some SFr500,000 ($385,000) per year in the process.
It is run as a commercial company, half financed by the St Gallen authorities and half by the profits it generates. Employees are paid SFr1,000-3,400 per month for jobs such as gardening, cleaning and recycling.
"We want to prepare people to get back into the working world and to give them back their self-esteem," foundation director Daniela Merz told swissinfo.
"We provide people, who would otherwise be sitting at home not knowing what to do, with a structure in their lives. They have to arrive at work on time and work to a proper standard to meet our quality requirements.
"It is not about support, help or therapy – it's about working."
So far this year the federation has had 220 employees on its books, out of whom 58 have gone on to find full-time work.
Sense of achievement
One employee, Thomas Würz, told swissinfo that he has found a new lease of life at the Foundation for Work after being out of work for 18 months. Würz, 42, has been at the scheme for a year and now passes on his skills to new employees in a mentoring role.
"If you don't work for a long time then it becomes hard to even get out of bed in the morning, which can be very depressing," he said.
"Here you build up skills and a social network – it's not just a question of making money. I go home in the evening feeling that I have achieved something.
"With the experience that I have gained here I will find it easier to find work."
Zurich city authorities intend to start their own social firms next spring and hope to be employing 550 long-term jobless people by 2008. They will earn SFr1,600-3,200, funded half by the companies and half by the city's social welfare department.
Unemployment benefit costs have soared from SFr189 million in 1999 to a projected SFr344.5 million this year, forcing a change in strategy for the city.
"Long-term unemployment cannot and should not be a problem for the state alone," said Monika Stocker, head of the city's social security department.
"To maintain Zurich's attractive quality of living we will need to develop local alliances and partnerships."
But trade unions believe the creation of low-paid jobs will have a negative effect on the labour market.
"We have nothing against the authorities intervening to create possibilities for the unemployed, but we don't want public money being used to create cheap labour," said Unia spokesman Bruno Schmücki.
"It will create a new grade of cheap labour that will lower the minimum wage and drag down the wages of people who already do similar work. These people could also lose their jobs if they are competing against a lower-paid workforce."
Merz explained that federation employees are paid an incentive bonus that boosts their earnings above the level they would receive from unemployment payments. But wages are deliberately set below the normal market rate.
"We do not pay our employees as much as they would get in the primary job market because we want to give them an incentive to go out and find work," she said.
"Many of the people who come to us have a reduced work capability due to personal problems or lack of skills. We set wages according to their ability to work, which rises as they become more competent.
"This is a question of job creation, not wage dumping. The unions should be working with us, not attacking us."
swissinfo, Matthew Allen
The unemployment rate has soared in Switzerland from 0.5% in 1990 to 1.8% in 2000 and 3.6% this year.
The number of registered unemployed in Switzerland more than doubled from 71,987 in 2001 to 153,091 last year.
In Zurich, 32,402 were registered as unemployed in 2004 compared with 13,058 in 2001. In St Gallen the number rose from 3,373 in 2001 to 7,478 in 2004.