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EMPLOYMENT

EXPLAINED: How much do foreign workers in Switzerland earn?

A government report released in 2019 compared the salaries of Swiss employees with those of foreign workers in the country. Here is what you need to know.

EXPLAINED: How much do foreign workers in Switzerland earn?
Lugano in the Italian-speaking canton of Ticino. File photo: AFP

The figures on wages are contained in the 2019 annual report on the impact of the free movement of persons treaty between Switzerland and the EU produced by the State Secretariat for Economic Affairs (Seco).

These yearly reports play a key role in the ongoing political debate over the impact of this immigration in Switzerland.

A rosy picture of immigration

The 2019 edition (here in French), released in July, shows there was net migration of 31,200 from the EU/EFTA area in 2018 – little changed from the 2017 figure of 31,250 but it’s a long way down from the record high of 68,000 in 2013 when the global financial crisis was in full swing.

In comments made to the press at the time Seco director Marie-Gabrielle Ineichen-Fleisch admitted that the Swiss–EU freedom of movement treaty is “controversial” and that not all groups within society benefit equally from the regime.

Nonetheless, her agency’s report paints a generally glowing picture of the role played by foreign workers in the Swiss economy.

Swiss salaries: What wages can you expect when working in Switzerland?

It argues these workers have provided a valuable shot in the arm for the Swiss economy by giving the country’s firms “uncomplicated” access to the foreign labour needed to make up for local skills shortages while counteracting the effects of an ageing domestic population.

The average age of EU/EFTA workers in Switzerland in 2017 was just over 30, while two thirds were between the ages of 18 and 41.

Unemployment among foreign workers

At the same time, the labour force participation rate of EU/EFTA workers aged 15 to 64 in 2018 was actually higher than that of Swiss workers – 87.3 percent against 84.6 percent.

In terms of unemployment, the news is not so positive. EU/EFTA workers are more likely to be out of work with their jobless rate at 6.1 percent compared to 3.5 percent for Swiss workers. However, there are big differences between nationalities here.

For Germans in Switzerland, the jobless rate in Switzerland was just 2.7 percent last year. For the French, it was 6.7 percent and for the Portuguese it was 7.4 percent.

A “very small” wage difference between Swiss workers and foreigners

Crucially, the report argues that the introduction of the free movement of persons treaty between Switzerland and the EU has not pushed down the wages of the local population – a major concern for many given traditionally high Swiss salaries.

Overall, the difference in wages between people who immigrated to Switzerland from the European Union and EFTA states between 2010 and 2018 and people based in the country before that date was “very small” – just 0.4 percent, according to SECO.

Workers from northern/western Europe – who are generally highly qualified and who are more likely to be in management positions – earn an average 13.5 percent more than Swiss workers in overall terms.

Read also: Three Swiss cities named Europe’s priciest for foreign workers

This equates to two percent once “explainable factors” including age, education levels, sector, years of experience and level of responsibility are taken into account.

By contrast, workers from southern Europe earn 18.7 percent less than Swiss employees – or 4.3 percent less once explainable factors are accounted for.

Meanwhile workers from eastern Europe – who are also generally well-qualified but who, according to Seco, are often not employed in their field of choice – take home 9.8 percent an hour less than Swiss workers, or 5.9 percent after explainable factors.

For people from outside the EU/EFTA area (so-called third nationals), the difference is an overall 18.8 percent in favour of Swiss workers, or 6.7 percent after explainable factors (35 francs an hour, or around €31.40 an hour, against 40.9 francs an hour).

Swiss debate over immigration

The upbeat Seco report comes in the context of a long-running debate over freedom of movement in Switzerland.

The government recognises that freedom of movement is essential to the Swiss economy and to the country’s relations with the EU but the right-wing Swiss People’s Party – the country’s largest – has consistently pushed for immigration to be restricted.

Read also: Explained – what it’s really like working in Switzerland

In 2014, Swiss voters backed an SVP initiative to implement immigration quotas at a referendum but the government watered down the proposal over fears it would seriously damage Switzerland’s relations with the EU.

The resulting measures oblige firms to advertise open positions in occupations with high unemployment via regional unemployment (RAV/ORP) offices for five working days before they are advertised publicly in a bid to give Swiss-based workers first bite of the cherry.

But a frustrated SVP has now launched a new initiative calling for an end to the Swiss–EU freedom of movement treaty.

The situation is made even more complicated by the fact that Bern is currently trying to hammer out a deal on future bilateral relations with Brussels.

Among the major stumbling blocks is the possible threat to Switzerland’s wage protection measures. Unions fear any future deal that does not guarantee the future existence of these measures might see the country’s workers taking a hit to the hip pocket.

Read also: An essential guide to Swiss work permits 

A version of this article was first published in July 2019

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For members

ZURICH

Jobs: Why Zurich has rebounded better than other Swiss cities from Covid

The Covid pandemic hit Switzerland hard, although the country's largest city has rebounded strongly.

Jobs: Why Zurich has rebounded better than other Swiss cities from Covid

Measures imposed due to the Covid pandemic, which began in earnest in February 2020, shuttered businesses across the country and pushed many people out of work. 

When most notable Covid rules were relaxed in Switzerland in mid-February 2022, the economic recovery – highlighted by a strong job market – began in earnest in 2021. 

READ MORE: How the Swiss job market rebounded from the Covid pandemic

Nowhere was this more evident than Zurich, Switzerland’s largest and most economically powerful city. 

How did Zurich rebound from the Covid pandemic in comparison to the rest of the country?

Even though Zurich, along with other large Swiss cities like Geneva, Basel, Bern and Lausanne, have been hit hard by the pandemic from the employment perspective, Zurich’s labour market is now growing faster than in other urban centres.

One of the reasons for this upward trend is that young, well-educated foreigners are coming back.

In the first nine months of 2021, the city’s population grew significantly.

In September alone, it recorded 2,200 additional residents.

This is mainly due to people with a B residence permit, according to Klemens Rosin, methodologist at Zurich’s Statistics Office.

During the crisis, far fewer of them left the city. “This group is made up of well-educated, younger and mobile foreigners who have made a significant contribution to Zurich’s growth”, Rosin said.

Zurich’s employment market is expect to grow even further.

READ MORE: How hard is finding work in Zurich without speaking German?

That’s because in the coming years, many Zurich workers will retire — an estimated  210,000 by year 2050 — creating more job opportunities for younger employees.

In fact, according to a study commissioned by the canton in 2021, if Zurich’s economy is to continue to flourish, it will need around 1.37 million workers by mid-century.

If these vacancies will not be filled, then income, tax revenue and the financing of social security programs will be impacted.

READ MORE: Have your say: What’s the best way to find a job in Zurich

While it is difficult to predict what jobs will be most in demand in 2050 — what new technologies will emerge in the meantime — right now and in medium term, IT workers will be especially needed, experts say, because businesses will continue to to digitalise and automate.

Lower skilled jobs will also be in higher demand, including hospitality, retail and transport. 

With hundreds of thousands of vacancies to fill, people with the permission to work in Switzerland are likely to be flush with offers – particularly skilled workers with recognised qualifications. 

READ MORE: Why finding a job in Switzerland is set to become easier 

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