Real wages in Switzerland, a question of perspective

Wages have experienced sustained growth since 2020, but that was not enough to compensate for the increase in consumer prices, resulting in a drop in real wages from the point of view of households. Similarly, From the point of view of companies. Furthermore, the situation is however different, and contrasting due to the heterogeneous evolution of production prices. Nevertheless, If companies in the tertiary sector have seen the cost of labor drop. Nevertheless, it is quite different from the secondary sector. Moreover, The pressure on the purchasing power of employees therefore does not imply that all companies see their situation improve.

Different concepts of real wages

Given the sharp increase in prices since 2020. Furthermore, nominal salary gains must be adjusted to obtain a measure of the effective cost of work. Therefore, The most common approach is to consider the ratio real wages switzerland, question perspective between salary and consumer prices to obtain a purchasing power measure.

The graph below shows the evolution of the real salary for the entire economy (red line)and for wages in the secondary sector. Nevertheless, the tertiary sector (green and blue lines). Therefore, We can clearly see that if purchasing power has increased regularly since 2000. the trend has greatly reduced in 2016, then the real salary came down between 2020 and 2024.

At first glance, you might think that companies benefit from cheaper work. This is not necessarily the case. If for people employed the real salary is calculated on the basis of the price they pay for their consumption real wages switzerland, question perspective basket. from the point of view of companies it is the price at which they sell their production which counts. These two prices do not necessarily correspond. especially in an open economy where, for example, the consumption basket includes imported goods.

The standard production price measurement is the deflator index of the gross domestic product (the ratio between nominal GDP. real GDP). The graph below compares the consumer price (purple line) with the deflator price of the GDP. At first glance, the distinction mentioned above is not important, the two lines being very close. The situation is however very different by sectors of activity.

GDP statistics through the production approach give the defland indices for the different sectors. which we can combine to obtain the index for the secondary sector (green line) and the tertiary sector (blue line). The graph clearly shows that the prices of the secondary sector have real wages switzerland, question perspective been under pressure since 2010. with a downward trend until 2022 and a slight increase since. A likely cause of this development is the need for exporting companies to contain their prices in a context. of appreciation of the franc.

Real wages switzerland, question perspective

Evolution contrasted by sector

We obtain the evolution of the real cost of work by combining nominal wages by sector with the prices of the GDP in these sectors. The graph below shows that overall the real cost has stabilized since 2017. The situation is however very heterogeneous. If the cost of labor in the tertiary sector (blue line) Stabilized. then clearly fell over the past real wages switzerland, question perspective four years, it is quite different from the secondary sector (green line) where the cost remained on a clear upward trend.

It is therefore not surprising to hear dissatisfaction as well of employees. who see their purchasing power stagnating, as well as certain sectors of activity which see the real cost of work increase. Only the tertiary branches experienced this cost.