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WORKING IN SWITZERLAND

Why foreign workers are the focus of political debates in Switzerland right now

Immigration has always been a hot-button topic in Swiss political and economic circles, but it is becoming even more urgent now.

Why foreign workers are the focus of political debates in Switzerland right now
Foreigners are plentiful in the construction sector. Photo by Justin TALLIS / AFP

With many Swiss companies understaffed due to lack of qualified candidates, Economiesuisse, the umbrella organisation for Swiss businesses is sounding the alarm concerning the shortage of skilled labour.

“Many companies across the Swiss economy are experiencing great difficulties in filling their vacancies. And the future prospects are bleak,” said the organisation’s president, Christoph Mäder.

They are “bleak,” as Mäder pointed out, because a large number of “baby boomers” will leave the workforce in the near future — as those born in the early 1960s will retire soon.

Economists are concerned that those positions will not be filled, predicting  a shortage of 431,000 workers within a decade.

This would result in lower productivity, affecting Switzerland’s economic growth and prosperity.

More foreign workers

While various measures should be taken to counter this trend (read more about this below), economists say foreign employees are the key to filling the growing labour market deficit.

Switzerland’s dependence on foreign labour is not a new phenomenon, though the need is growing as more people are retiring.

“Immigration from the EU / EFTA is strongly geared to the needs of the Swiss economy,” according to State Secretariat for Economic Affairs (SECO). “Foreign recruitment has helped address shortages in the labour market and thus supported economic development.”

The message is clear: Switzerland needs immigrants.

So what is the problem?

In a nutshell, the problem is that the political right doesn’t agree with the government and business community that foreign workers are beneficial to the country’s economy and long-term development.

As it did numerous times before, the populist Swiss People’s Party (SVP) is getting ready to launch a referendum to curb immigration.

While no details are known,  the last such SVP attempt, in 2020, to restrict immigration from the EU / EFTA states, was soundly rejected by nearly 62 percent of voters. 

SVP’s attempts to stop the influx of immigrants on the grounds that foreigners take jobs away from the Swiss has long been disproven, but the party continues to create controversy by repeatedly bringing this issue to the forefront.

A SVP  poster by right-wing Swiss People’s Party (SVP) showing a cartoon worker wearing a belt studded with EU stars, crushing the red and white map of Switzerland with his wide rear end that translates from French as “Too much is too much!” Photo by Fabrice COFFRINI / AFP

‘Moderate immigration’

The SVP is refuting economist’s warnings about the impending labour shortages and the consequences thereof.

“I don’t know in which bubble the officials are sitting, but if we want to keep our quality of life, we have to slowly return to more moderate immigration,” SVP deputy Thomas Matter told SRF broadcaster in an interview.

Rather than boost Switzerland’s affluence, as business circles argue, “since the introduction of the freedom of movement [between Switzerland and the EU], prosperity in Switzerland has stagnated,” he added.

Economy at a standstill

On the contrary, without immigrants, Switzerland would not be as successful as it is today,” according to Valentin Vogt, president of the Swiss Employers Association.

“Construction sites would come to a standstill, while restaurants and hospitals would have great difficulty in maintaining operations,” Vogt pointed out, mentioning just some of the sectors in which many foreign workers are employed.

Therefore, the SVP’s planned referendum “will massively damage the economy,” Vogt added.

Perks and incentives
 
While the business community is trying to persuade opponents of the necessity to recruit more foreign workers, employers have already taken a number of measures to create an attractive working environment for future and present employees.

And the main element of that is better pay. 

A number of employers, especially in traditionally low-paid sectors like retail, have announced salary increases.

For instance, both Coop and Migros raised wages by 2 percent in 2023, and Denner by 2.3 percent.

Lidl has announced an even higher hike — 2.5 percent — which means that no employee of the chain would earn less than 4,500 francs a month for full-time work. 

Other companies, including Swiss Post, Swiss Federal Railways, as well as a number of pharmaceutical firms, have also upped their salaries by over 2 percent — an increase that will be given out both in terms of wages and bonuses.

Higher pay is a good incentive to attract and retain employees, but it only goes so far, since part of the increase compensates for inflation, so is not a pure gain.

But many companies also have another incentive up their sleeves.  

According to a Credit Suisse study, “in order to remain desirable as an employer in an environment characterised by a shortage of skilled workers, companies can also offer more attractive working conditions and fringe benefits”.

A majority of companies surveyed by the bank “have been recently relying on flexible working models, such as home office options or more flexible arrangements in terms of working hours,” the bank said.
 
 READ ALSO: What Swiss employers are doing to recruit hard-to-find staff 

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For members

WORKING IN SWITZERLAND

Six ways working in Switzerland is better than in the US

Sometimes it is difficult to compare different systems because much of the context is missing. But when looking at employment conditions in Switzerland and the United States from a purely factual perspective, some conclusions can be drawn.

Six ways working in Switzerland is better than in the US

In terms on politics, social system, demographics, and economy, Switzerland and America are, both literally and figuratively,  worlds apart.

But if you are a US citizen who is moving to Switzerland for professional reasons (and lucky enough to be granted a work permit as a third country national), then you may want to know how the Swiss employment system compares with the American one.

Let’s look at general differences — that is, laws and practices applicable to the working population as a whole, and not just relating to the most fortunate employees like top-level executives, who typically have more benefits than the rank-and-file workers.

Wages

Much depends on your professional level, of course, but generally speaking, on average employees in Switzerland earn more than their US counterparts.

An average annual income in Switzerland is about 80,000 francs, while in the US it amounts to $59,428 (53,000 francs).

You may argue that cost of living is lower in the United States, so the money foes further there. This is true in a general sense, but on the other hand, taxes are lower in Switzerland.

Workers in Switzerland have more statuary protections

Swiss law grants certain rights to its employees, which the US legislation doesn’t.

For instance, Swiss workers are entitled to at least four weeks’ of paid vacation time per year.  

READ ALSO: Everything you need to know about annual leave in Switzerland

In the US, on the other hand, there is no statutory minimum paid vacation. Instead, this is left up to the employers’ discretion.

According to the US Bureau of Labor Statistics (BLS), about one–third of private industry workers received 10 to 14 days of paid vacation after one year of service. After 10 years of service, 33 percent of private industry workers received between 15 and 19 days of paid vacation.

‘Sick days’

Swiss employment law only mandates that employers offer basic paid sick leave: generally, three weeks in your first year in the job, rising with each additional year to around four months max, depending on the canton.

However, many Swiss employers take out insurance that covers a more generous sick pay deal.

In the US, on the other hand, no law guarantees workers a single paid day off, and many aren’t even entitled to unpaid time.

According to BLS, only 77 percent of the private sector workforce has paid sick time. This means that almost one in four workers do not have even a single paid sick day. 

Work-life balance

This phrase is used to describe a division of time between work and leisure activities. This means the ability to successfully combine work, family commitments, and personal life .

Here too, Switzerland (and Europe in general) has a definite edge.

The Better Life Index by the Organisaton for Economic Cooperation and Development (OECD), found that  “in Switzerland, full-time workers devote a similar amount of their day on average to personal care (eating, sleeping, etc.) and leisure (socialising with friends and family, hobbies, games, computer and television use, etc.) as the OECD average of 15 hours.”  

 In the US, on the other hand, employees devote “less than the OECD average of 15 hours” to their non-work related activities.

Health insurance

Most US residents who are employed get their health insurance through their company.

In Switzerland, on the other hand, individuals are responsible for purchasing their own policies from one of the dozens of insurance providers.

It is difficult to say which approach is better; however, not having one’s health insurance tied to (and dependent on) a specific employer means that a person won’t be left without a coverage if he or she loses their job — even more so, considering how expensive medical care is in the United States.

READ ALSO: How does Switzerland’s healthcare system compare with the US? 

Unemployment benefits

If you have worked — and paid into the Swiss social security system — for 12 months in the past two years, you are entitled to 260 days (approximately 37 weeks) worth of unemployment allowance.

In the case that you had been employed for at least 18 months, you will collect for 400 days.

Workers in most US states, on the other hand, are eligible for only 26 weeks of unemployment allowances.

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