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Swiss face biggest loss of purchasing power since 1942

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Employees in the tourism and hospitality sectors, which are benefiting from a strong post-pandemic recovery, will be pleased to see a likely salary increase of 3% © Keystone / Christian Beutler

Wages in Switzerland are not keeping pace with inflation, and in 2022 the purchasing power of employees has dropped significantly. This has led to the highest loss in real wages for Swiss workers in 80 years.

On average, Swiss companies plan to increase nominal wages by 2.2% in 2023 – the highest increase in almost 15 years – according to a wage surveyExternal link by Swiss bank UBS published on Tuesday. However, real wages are likely to stagnate next year and will hardly make up for this year’s loss in purchasing power.

This is due to the expected sharp downturn in the Swiss economy and a moderation in inflation. However, real wage increases can be expected again in the longer term due to growing labour shortages.

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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

A nominal wage increase is expected in both 2022 and 2023 for each of the 22 sectors covered. According to the survey, the highest wage agreements of 3% are recorded in the wholesale trade, IT, and telecommunications sectors, along with the area of watches and jewellery.

Employees in the tourism and hospitality sectors, which are benefiting from a strong post-pandemic recovery, will be pleased to see a likely salary increase of 3%. The metals and textiles industries, along with the media sector, among others, bring up the rear in this year’s wage negotiations. Nonetheless, these three sectors should also see a robust nominal wage growth of around 2%, the survey said.

UBS economists are forecasting inflation of 2.9% this year, which translates into an average real wage loss of 1.8% – the sharpest decline since 1942.

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