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IMMIGRATION

How immigration benefits Switzerland

The State Secretariat for Economic Affairs (SECO) believes that the free movement of people, which allows citizens of EU and EFTA nations to work in Switzerland, has a positive effect on the country’s economy.

Published: 29 June 2020 17:13 CEST
Updated: 8 July 2022 11:05 CEST

Workers from the EU benefit Switzerland's economy. Photo by AFP

The free movement of people — the agreement Switzerland signed with the EU in 1999 — remains “important to cover the demand for labour adapted to the needs of different economic sectors”, State Secretariat for Economic Affairs (SECO) said on Thursday, July 7th.

“Foreign recruitment has helped address shortages in the labour market and thus supported economic development”, according to SECO.

While SECO’s call for immigrant employees pertains to workforce from EU / EFTA nations, Finance Minister Ueli Maurer made a similar statement, recommending that Switzerland also takes in more immigrants from outside the European Union to fill some job vacancies, especially in research and IT.

Over the years, statistics have shown how beneficial immigrants are to the Swiss economy. As of 2022, around one in four Swiss residents is foreign – a percentage which is far higher in larger cities like Zurich, Geneva and Basel.

In a report released in June 2020, based on the 2019 figures, SECO outlined the positive impact that workers from the EU and EFTA countries have had on Switzerland’s labour market.

These are some of the findings from the 2020 report.

Migrant workforce meets the demands of the Swiss economy

“Immigration from the EU / EFTA to Switzerland is strongly geared to the needs of the economy, as highlighted by the high level of participation in the labour market”, SECO said.

The activity rate of EU nationals was 87.7 percent in 2019, compared to 84.6 percent for Swiss nationals.

“Immigration therefore contributes significantly to increasing the participation of foreigners in working life in Switzerland”, the report found.

But while the native Swiss are more often hired for jobs requiring higher professional qualifications, immigrants are engaged for posts requiring a lower level of qualifications.

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Positive contribution to the flexibility of the labour market

Compared to native Swiss employees, more foreigners have temporary jobs and work more often at night or in the evening. “They offer a flexible labour pool for companies subjected to seasonal fluctuations”, SECO said.

Joblessness

The unemployment rate for people from the EU / EFTA remains above the national average. This can be explained by the concentration of EU / EFTA workers in sectors relatively more affected by unemployment, SECO explained.

Salaries

“Salary growth in Switzerland remains broadly balanced with regard to the different levels of education”, the report states.

“However, the median wage of the Swiss remains significantly higher than the median wage of all workers”, SECO added.

Family reunification

While citizens of EU / EFTA countries come to Switzerland for employment, family reunification is the main reason for immigration from third countries.

“The majority of family members who come to Switzerland as part of family reunification are economically independent and earn a salary”.

Social assistance

Professional integration and the use of social assistance are closely linked, the report found.

Only 3.4 percent of EU / EFTA immigrants who arrived in Switzerland in 2009 relied on social help within eight years of their arrival.

There’s less risk of having to resort to social assistance with the higher the level of education. People from the EU / EFTA countries who have immigrated as part of a family reunification and who depend on social assistance, “often manage to free themselves quickly and regain economic independence”, SECO notes.

Some 2,125,410 foreign nationals were resident in Switzerland at the end of March 2020, including 1,452 421 from the EU, as well as from Norway, Iceland, and the United Kingdom.

The highest number of foreigners come from Italy (15.3 percent), Germany (14.6 percent), Portugal (12 percent), France (6.7 percent), Kosovo (5,4 percent), and Spain (4 percent).

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Far right ahead

Europe’s far-right parties were winners in many places, coming out on top in France, Italy and Austria, while Germany’s AfD came second – but still ahead of Chancellor Olaf Scholz’s SPD party – and the hard-right also did well in the Netherlands.

But experts warned against reading too much into their success.

“The far right did well but not excellent – let’s not forget these are second order elections,” said Francesco Nicoli, a visiting fellow at Bruegel think tank.

“We cannot say that this is a very, very significant push as things stand,” Christine Verger, vice chair of Jacques Delors think tank said. “There may be movements within the political groups. We don’t know where some MEPs will end up.”

A big question being raised is whether two main far-right groups in the parliament — Identity and Democracy (ID) and the European Conservatives and Reformists (ECR) — can unite, creating a supergroup.

Verger dismissed that notion out of hand.

“I absolutely do not believe in a unification, it is out of the question for ID and ECR to merge,” she told AFP.

The ECR includes Italian far-right prime minister Giorgia Meloni, whose Brothers of Italy party came top in the elections.

As to the far right’s likely impact on lawmaking in the European Parliament, experts appeared sanguine.

“The rising number of far right MEPs will likely have only a limited impact on the EU,” predicted expert Marta Lorimer. “They do not form a blocking minority.”

Weaker Macron

The biggest single loser of the elections was Emmanuel Macron after his centrist party received a drubbing by France’s Rassemblement National (National Rally) led by Marine Le Pen.

The French president responded by swiftly dissolving France’s national parliament and calling for snap elections.

“France remains a large country with a president who has a lot of power,” Verger said.

As the head of a major EU member state, Macron will remain an important player on the European stage.

But she said the poor election performance of his Renaissance party would see it “lose some influence” within the Renew grouping that it belongs to, and the parliament in general.

Return of Von der Leyen

Analysts agreed it was a pretty good night for European Commission President Ursula von der Leyen, who hopes to secure a second five-year mandate after the vote.

She will need the support of the EU’s 27 leaders and the new parliament – and in the latter respect the data suggests von der Leyen can breathe a sigh of relief.

Her party, the European People’s Party (EPP), remains the parliament’s biggest grouping and experts predicted she would be able to get the extra votes she needs.

Based on preliminary results, Nicoli said she could rely on the support of the Socialists and Democrats “with a choice between liberals, ECR and Greens as junior partner” – and could deal with 20 defections or more in each scenario.

“I think the elections could have been worse for her.”

Wilting Greens

It was a disappointing night for the Greens political group, which is on course to lose around 20 EU lawmakers – in a result that came as little surprise.

“Greens are the clear losers, and so is Macron, but again these were trends clearly evident before,” Nicoli said.

European concerns about security and the cost of living following the outbreak of war in Ukraine in 2022, and other issues including migration, displaced the environement as a voter concern.

“The Greens have not been very well placed to answer those demands,” Nicoli added.

And all across Europe, right-wing opponents have successfully channelled discontent into anger at the EU’s environmental push of recent years.

But Greens’ EU lawmaker Bas Eickhout saw the results as a “mixed bag” – and “a bit more nuanced than just saying it’s a big loss”.

He pointed to the Greens’ success in the Netherlands and Spain as well as smaller countries in the north and Baltics, including Denmark and Lithuania.

Higher turnout

Around 360 million people could vote in the elections and in welcome news, turnout was the highest in 20 years at around 51 percent, according to provisional EU data.

“The good news for democracy is that the turnout looks likely to be above half of the electorate, although that is still below participation rates for national elections, and very low in countries such as Slovakia and Lithuania,” said Heather Grabbe, a senior fellow at Bruegel.