How inflation and global uncertainty affect Swiss wages

Wage increases can now be converted into extra purchasing power Keystone / Christian Beutler

For the first time in three years, Swiss workers were able to buy more consumer goods with their pay increases in 2024. Between 2021-2023, inflation had more than wiped out wage hikes.

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Wages increased by an average of 1.8% last year, according to the Federal Statistical Office (FSO). A 1.1% inflation rate meant employees ended up with an effective 0.7% increase in purchasing power.

Inflation peaked at 2.8% in 2022, caused both by logistical logjams after the Covid-19 pandemic and the higher cost of energy following the outbreak of the Ukraine war.

Which sectors got the biggest wage boost?

Collective bargaining agreements between trade unions and employers saw some 613,000 workers receive an average 1.7% pay increase in 2024 – slightly below the total average of 1.8%.

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But the results varied among industry sectors. This is typified by the manufacturing workers, who saw different results depending on the type product being manufactured.

Employees producing rubber and plastic products saw pay rise by 4.9% while those in the fabricated metal products sector received just 0.8% growth in nominal wages.

According to the FSO, workers in the areas of healthcare, residential care and social services (+3.0%), postal services (+3.0%), insurance (+2.5%) and public administration (+2.5%) workers were among the biggest winners in last year’s pay rounds.

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At the other end of the scale, publishing, audiovisual and telecommunications employees saw average wage growth of just 0.4%.

What is the outlook for 2025?

The Unia trade union says that collective bargaining agreements should yield workers pay hikes of between 1.7% and 2% this year.

But Travail Suisse lamented “mixed” results in the 2025 wage negotiation round and complained that “real wages are at the same level as 2015” with inflation taken into account.

A UBS bank survey of 345 companies, published in November, predicts an average wage increase of 1.4% this year, with inflation stripping away half of these gains. People living in high-price Switzerland are faced with rapidly rising healthcare costs.

On top of this comes the uncertainty created by United States tariff threats, which could raise prices on certain goods in some regions. A global tariff war could slow down international trade, resulting in a potential drop in consumer prices, accompanied by job cuts.

The results of the US tariff strategy cannot be easily predicted amid continuously changing policy announcements.

“The economic outlook for Switzerland has become considerably more uncertain,” said the Swiss National Bank in March as it forecast an average inflation rate of 0.4% for this year. “Against the backdrop of increased trade and geopolitical uncertainties worldwide, developments abroad continue to represent the main risk.”

Edited by Veronica DeVore/ac