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WORKING IN SWITZERLAND

Why does Zurich have the highest wages in Switzerland?

Various studies show that when it comes to salaries, Switzerland’s largest city has an edge over other regions. What is the reason for that?

Published: 23 May 2023 10:48 CEST
Zurich
Zurich boasts Switzerland's highest salaries. Image by Hebi B. from Pixabay

Switzerland’s wages are famously high overall, but if you analyse them closer, you will see that, salary-wise, some regions fare better than others.

Logically, earnings are higher in large cities than in small towns and rural areas, as that is where most economic opportunities are.

However, income disparities exist even between the urban centres.

This has been shown in various surveys, including the latest one, released this month by HES-SO, the umbrella association of Swiss universities of applied sciences (UAS). 

Unlike general universities, UAS doesn’t offer Master or Doctorate degrees, but rather Bachelor’s programmes linked with a specific professional field. They are often attended by people who had completed their vocational training and wish to further their education.

What did this survey find?

What emerged from this study is that graduates of universities of applied sciences earn significantly more in 2023 that they did two years ago, when the last study was carried out.

Their median annual wage currently amounts to 104,000 francs, compared to 100,000 in 2021.

However, the results also indicate that there are regional disparities, with wages being higher in German than in French-speaking Switzerland.  

Among the cantons, Zurich is in the lead, with a median income of just over 111,000 francs per year.

This is not exactly a new piece of information: statistics show that salaries in Zurich are 10.8 percent higher than in Geneva, and 5.4 percent higher than in Basel.

How can this discrepancy be explained?

The Local put this question to Fabian Büsser, director at Michael Page recruitment agency.

He said that it is a matter of what kind of jobs are most in demand and their geographical location.

“Some of the highest paying jobs are in finance, insurance, IT, and engineering,” he pointed out, most of which are located in the German-speaking part of Switzerland.

“This region accounts for nearly 90 percent of advertised jobs in these sectors and is home to the largest banks, insurers and technology companies, as well as other firms requiring engineers, such as real estate and property,” Büsser said.

According to the latest Michael Page Swiss Job Index, while 89 percent of these jobs can be found in the German-speaking region, only 10 percent are in the French-speaking area (and even fewer — 1 percent — in Ticino).

There is, however, some positive news for the Swiss-French part

The HES-SO survey found that while this region trails behind the German-speaking part, the wages there have increased significantly.

The median annual salary in the Geneva area is 92,300 francs, which corresponds to an increase of 8.4 percent compared to two years earlier.
This is particularly the case in the IT branch, with a median salary of 112,000 francs, followed by finance and insurance, with 106,000 francs.

How do these wages compare to those who graduate from ‘regular’ universities?

Switzerland has several kinds of higher education establishments: cantonal universities and two federal polytechnic institutes: one in Zurich (ETH) and the other in Lausanne (EPFL).

They are considered the ‘highest’ educational institutions.

Graduates of these establishments can earn as much as 10,170 francs a month, which amounts to 122,000 a year.

READ ALSO: How much can you earn with a Swiss university degree?

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WORKING IN SWITZERLAND

The pitfalls of Switzerland’s social security system you need to avoid

In most cases, Switzerland’s social benefits system functions well. But there are also some loopholes you should know about.

Published: 24 April 2024 13:37 CEST
The pitfalls of Switzerland's social security system you need to avoid

The Swiss social security system has several branches: old-age, survivors’ and disability insurance; health and accident insurance; unemployment benefits, and family allowances.

This is a pretty comprehensive package, which covers everyone who pays into the scheme for a wide variety of ‘what ifs’.

As the government explains it, “people living and working in Switzerland benefit from a tightly woven network of social insurance schemes designed to safeguard them against risks that would otherwise overwhelm them financially.” 

But while most residents of Switzerland are able to benefit, at least to some extent, from this system, others don’t.

What is happening?

If someone becomes ill or has an accident, Switzerland’s compulsory health insurance and / or accident insurance will cover the costs.

However, a prolonged absence from work can become costly.

That is especially the case of people employed by companies that don’t have a collective labour agreement (CLA), a contract negotiated between Switzerland’s trade unions and employers or employer organisations that covers a wide range of workers’ rights. 

READ ALSO: What is a Swiss collective bargaining agreement — and how could it benefit you?

It is estimated that roughly half of Switzerland’s workforce of about 5 million people are not covered by a CLA.

If you just happen to work for a company without a CLA, your employer is not required to pay your salary if your illness is long.

You will receive money for a minimum of three weeks – longer, depending on seniority — but certainly not for the long-haul.

You may think that once your wages stop, the disability insurance (DI) will kick in.

But that’s not the case.

The reason is that DI can be paid only after a year after the wages stop. In practice, however, it sometimes takes several years of investigations and verifications to make sure the person is actually eligible to collect these benefits, rather than just pretending to be sick. 

In the meantime, these people have to use their savings to live on.

What about ‘daily allowance insurance’?

Many companies (especially those covered by a CLA) take out this insurance, so they can pay wages to their sick employees for longer periods of time.

However, this insurance is optional for employers without a CLA is place.

As a result, small companies forego it because it is too much of a financial burden for them.

And people who are self-employed face a problem in this area as well: insurance carriers can (and often do) refuse to cover people they deem to be ‘too risky’ in terms of their age or health status.

Critics are calling the two situations —the length of time it takes for the disability insurance to kick in and gaps in the daily allowance insurance—”perhaps the biggest failures of the social security system.”

Is anything being done to remedy this situation?

Given numerous complaints about the unfairness of the current system, the Social Security and Public Health Commission of the Council of States (CSSS-E) will look into the “consequences of shortcomings and numerous dysfunctions in long-term illness insurance.”

But not everyone in Switzerland sees a problem in the current situation.

According to the Swiss Insurance Association (SIA), for instance, “making daily sickness allowance insurance compulsory for employers would not have the desired effect. Due to false incentives, it would only exacerbate the upward trend in costs and premiums.”

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