Rising prices – threatened loss of purchasing power – associations are demanding wage increases – News

Rising prices, stagnating wages: employee representatives are sounding the alarm. The other side dampens expectations.

The Swiss population has benefited from a massive wage increase: that’s what the Association of KV Switzerland and employees Switzerland say. For the coming year, they are demanding 300 francs more per month for people with a monthly wage of less than 4,200 francs and up to 4.5 percent for everyone else.

In June, the trade union federation had already called for a wage increase of five percent for all. So how urgent is the situation?

The big concern is falling real wages

According to Michel Lang of KV Switzerland, it is time that employees were rewarded for their increases in productivity. Otherwise there would be a drastic loss of purchasing power

And indeed: the median wage of around CHF 6,600 gross per month has changed very little in recent years. In summary, this means that half of the employees earn more, the other half less.

In the past ten years, people haven’t had that much trouble; because the prices hardly changed. However, the sharp rise in inflation has now changed that. Instead of the nominal wage, the real wage suddenly becomes decisive.

The result: Never in the last 30 years has the real wage loss been greater than in the last year.

Employees in Switzerland and the Commercial Association call the wage increases of the past few years “modest”. They also criticize the fact that not all companies compensated for inflation in the last wage round.

In view of a “robust labor market” and “stable consumer behavior”, these developments are unfair. “Many households have to accept falling real wages while companies distribute profits,” they write in a statement.

The low-wage sector starts at 4443 francs

People in the low wage segments are particularly affected by these developments. They could not compensate for the rising costs. “We want to prevent these people from slipping below the poverty line,” says Manuela Donati from Employees Switzerland.

Unfortunately, rising wages are being wiped out by rampant inflation.

In Switzerland, the low-wage sector refers to those jobs that pay less than CHF 4,443 a month for a full-time job. According to the Federal Statistical Office, this applied to 10.5 percent of all jobs in 2020. This value has remained fairly stable over the past 15 years – or has even fallen slightly. Just under half a million people fill these positions – two-thirds of them women.

According to Michel Lang of KV Switzerland, there has been a pleasing development in wages in the retail trade over the past few years. “Unfortunately, the rising wages are being wiped out by rampant inflation.”

Employer: Advantage continues for the employees

Simon Wey, chief economist at the employers’ association, also thinks that employees have not made any big leaps in the last two years. Nevertheless, the demands of KV Switzerland and employees Switzerland are illusory. “Employers are already going to the limit when it comes to wage demands.”

The last two years have been exceptional due to high inflation. However, inflation is now falling again and the prospects for the economy are clouding over.

Despite the recent turbulence, he still sees the employees in a good starting position. “With the ongoing shortage of skilled workers, the position of employees has continued to improve.”