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How immigration boosts the entire Swiss economy

How immigration boosts the entire Swiss economy
Most foreign workers come from the EU. Photo by SEBASTIEN BOZON / AFP
The foreign workforce in Switzerland has been at the centre of controversy for years. But as a new study shows, immigrants are a boost to the country’s economy.

Even though some right-wing politicians have suggested that immigrants are taking jobs away from the Swiss – a claim that has been refuted by others — research shows that in reality foreign workers contribute to strengthening Switzerland’s economy.

In general terms, this question is addressed in a new study carried out by the Boston Consulting Group (BCG).

It found that “immigration countries recorded an average plus of two percentage points in the growth of the gross domestic product, because culturally mixed societies are more innovative. As a result, productivity and incomes also increased”.

While this study examined economic advantages of migration in all countries, and not particularly in Switzerland, there is enough evidence showing that foreign nationals benefit Swiss economy in numerous ways.

According to BCG Switzerland spokesperson Matthias Haymoz, 58 billion francs of the total gross domestic product are contributed each year directly and indirectly by immigrants. This corresponds to 8.2 percent of Switzerland’s total economic output – and is high in an international comparison.

One of the reasons for this is that Switzerland attracts a large number of highly qualified people, Haymoz said.

This finding is also supported by other data, like a report from University of Basel that examined  how Swiss economy benefits from immigration.

“In Switzerland there is a shortage of skilled labour in certain sectors of the economy. As a result, specialists in various fields have to be recruited from abroad”, according to the report.

“Highly qualified immigrants can help address this imbalance in the labour market”, said Basel economist Ensar Can.

“This relieves the pressure on companies, enabling them to continue operating and, in many cases, create new jobs – a good thing for the economy as a whole”, he added.

READ MORE: How can I have my foreign qualifications recognised in Switzerland?

Another report, issued by the State Secretariat for Economic Affairs (SECO), reiterates this point.

It states that the free movement of people, which allows citizens of EU and EFTA nations to work in Switzerland, is positive for the country because it meets the demands of the Swiss economy for both skilled and unskilled workers.

“Immigration from the EU / EFTA to Switzerland is strongly geared to the needs of the economy”, SECO said.

For example, the activity rate of EU nationals was 87.7 percent in 2019 — the last year for which statistics are available — compared to 84.6 percent for Swiss nationals, the report found.

Foreigners also fill other gaps in the labour market.

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

Also, while immigrants compensate for the shortage of high-skilled workers, the opposite is also true: they fill in low-skilled positions which are also essential for the country’s prosperity.

In what sectors do most immigrants work?

As this chart from the Federal Statistical Office indicates, most foreigners are employed in manufacturing, retail, as well as healthcare and social services sectors.

More immigrants in Switzerland in the first half of the year

In the first six months of 2021, immigration to Switzerland increased by 3.9 percent, compared to the same period of 2020, according to a new report released by the State Secretariat for Migration (SEM).

These developments are mainly due to the fact that, compared to the first pandemic wave of spring 2020, more third-country nationals came to Switzerland.

Net migration amounted to 26,008 people. In all, 2,128,812 foreigners were residing in Switzerland at the end of June 2021.

 READ MORE: An essential guide to Swiss work permits

 

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