According to Basel-based BAK Economics, the Covid-19 pandemic will cause considerable damage to employee salaries, earnings from self-employment and income from assets.
Along with actual job losses, short-time working hours will have a big impact on earnings. Some compensation for reduced working hours may partially make up for these losses but in the end, earnings are expected to fall by 2.5% in 2020, according to BAK economists.
Some sectors will be more affected than others. According to the BAK, the hotel industry, tourism and events, and parts of the public transport sector will see their situation worsen. But the global recession will also affect other sectors such as the export industry and finance, which could make people redundant.
In the next 12 months, there will be some catching up. But the economic institute expects stagnation in both 2020 and 2021. Compared to a situation without Covid-19, the loss of income will amount to CHF15 billion in 2020 and 2021, which works out to CHF1,700 per person in Switzerland.
In view of the gloomy outlook for the future, BAK economists recommend continuing measures to maintain earnings, developing a strategy to prevent a second wave of infections and taking additional measures to support the economy.
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