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COST OF LIVING

EXPLAINED: Why Switzerland’s cost of living isn’t as high as you think

Yes, Switzerland is expensive, but if you analyse things from a different angle, at least some of the country’s prices don’t look quite as bad.

EXPLAINED: Why Switzerland's cost of living isn't as high as you think
Swiss worker can afford to eat three of those for his hourly wage. Photo by Polina Tankilevitch / Pexels

In almost all the international cost of living rankings, Switzerland comes near the top. Sometimes it competes for the “winner’s spot” with Nordic countries like Norway or Iceland, but any way you look at it, you need lots of money to live here comfortably.

Have you ever heard anyone (other than possibly multi-millionaires) saying “Hey, let’s spend our vacation in Switzerland. It’s really cheap there”.

There is a number of reasons why the country is so costly, which are detailed in this article:

EXPLAINED: Why is Switzerland so expensive?

But if you look beyond the sheer statistics, Switzerland does not fare quite as badly – particularly as a place to live. 

Here’s why Switzerland isn’t as expensive as we may think. 

Inflation rate

The Covid pandemic and the war in Ukraine have pushed worldwide inflation rates upward.

While in Euro zone countries this rate stands at 8.1 percent as at May 31, in Switzerland it is a much lower 2.6 percent.

There are many reasons why Switzerland is withstanding inflationary trends better than other countries — at least so far — including the strong franc, which makes imports (though not exports) cheaper.

While prices here are going up due to reasons cited above, the increase is not as drastic as elsewhere in Europe.

READ MORE: EXPLAINED: Why Switzerland has escaped the global spike in costs of living

Strong economy

Overall, the strength of Switzerland’s economy, which withstood the pandemic much better than other countries, is worth its weight in gold —and not just literally.

“Even in a time of crisis, Switzerland scores thanks to its stability, predictability and security”, said Patrik Wermelinger, member of the executive board of Switzerland Global Enterprise (SGE), which promotes the country abroad on behalf of the federal government and the cantons.

Right now Switzerland’s unemployment rate is just over 2 percent, while it is 6. 8 percent across the EU. Looking specifically at neighbour countries, it is 7.3 percent in France, 8.4 in Italy, 5 percent in Germany, and 5.7 percent in Austria.

What exactly does all this have to do with the cost of living in Switzerland?

The country’s resilience to global crises means people remain employed, and employed people can afford to buy at least the basic necessities.

Right now, “the market situation is very positive for employees…Skilled workers are scarce and the shortage cannot simply be filled by workers from neighbouring countries”, according to Peter Unternährer, Manpower’s regional director for central and eastern Switzerland.

READ MORE: Employment: This is where Switzerland’s jobs are right now

High salaries

Okay, so your monthly income per se means nothing unless you convert it into its purchasing power.

In Switzerland, high wages are eaten up by high prices — at least that’s what many people will tell you and we won’t argue with that.

But wait before you jump to this conclusion, let’s talk about McDonald’s and its Big Mac burger (yes, you heard us right — a Big Mac burger).

The Economist magazine’s Big Mac Index is a globally accepted metric which compares how much this burger costs in every country.

Not surprisingly, this sandwich costs most in Switzerland ($6.98 = 6.71 francs).

However if you take a minimum hourly wage, say 20 francs, an average worker could buy three burgers for his hourly wage.

As a comparison, in the USA, where the Big Mac costs $5.81 (again, according to the index) but the median minimum salary on federal level is $7.25 per hour,  an average worker could have just over one burger for an hour’s work. 

All this is to say that things are not always what they seem.

Some things in Switzerland are (comparatively) cheap

Although “Switzerland” and “cheap” should never be used in the same sentence, the fact is that some things here are actually reasonably priced.

For instance, the Value Added Tax (VAT) is 7.7 percent here, while it is much higher throughout Europe, as the  chart below shows.

Tax Foundation screenshot

Because of that, prices of some goods, like electronics, are lower in Switzerland than in many European countries.

Also, the tuition fees at Swiss universities are low by the standards of many other countries. At the prestigious ETH technical institute in Zurich, for example, tuition and semester fees total 649 francs a semester.

And let’s not forget about taxes.

According to Moneyland.ch consumer website, “The average resident of Switzerland spends 10.7% of their income on income tax according to OECD estimates. For the sake of comparison, income tax eats up 14.8% of the average French income, 16.9% of an average Dutch income, 18.3% of the average U.S. resident’s income, 19% of the average German’s income, and 36.2% of the income earned by the average resident of Denmark”.

READ MORE: 13 things that are actually ‘cheaper’ in Switzerland
 

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COST OF LIVING

Five things to consider when organising childcare in Switzerland

Switzerland's childcare costs are among the world's highest, although there are some ways to save. Originally from the United States but now raising children in Zug, writer Ashley Franzen takes you through some of the most important things you need to consider when finding childcare in Switzerland.

Five things to consider when organising childcare in Switzerland

Switzerland has a peculiar dichotomy when it comes to childcare. Although many parents both work full-time, Switzerland has traditionally been hands off when it comes to childcare support for families with children under five, leading to some of the highest childcare costs in the world. 

For older kids there is before and after-school care that is offered by the canton, but for younger kids who haven’t quite started kindergarten, it can pose problems for parents who are in need of reliable care, particularly those who don’t have grandparents to rely on. 

According to the Swiss Federal Council, “Grandparents as well as daycare centres and extra-school care facilities are the most frequently used forms of childcare, with each category accounting for a third of provision for children aged 0 to 12 years. 81 percent of families in large cities turned to extra-family care for their children compared with 66 percent of families in rural areas. Parents’ satisfaction with the care facilities is high, but there is still unmet demand.” 

What alternative childcare options do I have in Switzerland?

There are various childcare and nursery options for babies and toddlers up through young children aged five or six. Each canton offers childcare, though often there are lengthy waitlists for available spots.

READ ALSO: ‘A developing country’: Why do so few Swiss children attend childcare?

An alternative might be a private or bilingual daycare, but the costs for these are even higher than the locally-run childcares, and sometimes have longer waitlists.

Get on a list early as it’s important to get the ball rolling on paperwork, especially as a foreigner in Switzerland. 

An alternate option is to find the equivalent of a Tagesmütter, or a carer who opens up their home to taking care of up to four children at a time, when there is space available.

The costs remain about the same, but it can be easier to get placement for childcare with an in-their-own-home carer.

Some families opt to hire a nanny, but it may not be possible financially for all families. As for bringing an Au Pair to join the family, there are specific rules and regulations in Switzerland surrounding pay, number of hours they can work (about half of which you would need to be present for), and language rules– the main one being they cannot speak the same language as the family. Additionally, language classes are stipulated for the duration of their stay. 

Suffice it to say, that there are quite a few hurdles to overcome and in order to make sure your family is supported with reliable childcare to meet your needs.

Below are five things to consider as you plan out and organise childcare in Switzerland.

Children play with educational tools. (Photo by Thomas SAMSON / AFP)

1. Compare the options

Childcare in Switzerland is top notch, albeit expensive, so make sure you take the time to figure out where you want to enrol your child.

Some of the best programs are actually run as not-for-profit organisations, such as KiBiz in Zug.

READ ALSO: What alternative childcare options do I have in Zurich?

Most daycares offer a pedagogically strong curriculum and having them at a local daycare gives your child the opportunity to learn the local language. 

2. Decide on someone to name as your emergency contact

This can be a bit harder if you don’t have family or friends nearby, but double check with a colleague or someone that you trust in the case of an emergency or illness.

Finding a colleague that is willing to help by picking up the kids when they were sick when both parents find themselves out of town can be incredibly helpful. 

READ MORE: How much does it cost to raise a child in Switzerland?

3. See if you qualify for subsidies

According to the OECD, Switzerland has the highest cost for childcare among wealthy countries. Cantons are in the process of trying to increase the amount of money they’re able to allocate for assisting families with the costs.

If your household income is under a certain amount (it varies by canton), then it might be possible to have some of the costs of your family’s childcare covered. 

4. Consider having a babysitter or two on hand that you can call

As a foreign parent in Switzerland, sometimes it makes sense to have someone extra to call on for help with childcare coverage– even if you don’t think you’ll need anyone.

Meetings get moved, appointments need to be rescheduled, and sometimes there’s the odd school workday, where kids do not attend classes.

READ MORE: How to save money on childcare in Switzerland

In situations like these, having someone to reach out to, who can help provide coverage (and perhaps even the occasionally date night) helps provide a safety net for parents that might not have any backup to call at the spur of the moment. 

5. Be open for and prepared to have a hurdle or two, be it language or logistics

Many of the institutions around the country, particularly for younger kids are really good at filling in the parents on what the kids have done during the day, what they’ve eaten, how they’ve acted. The seemingly hardest part is actually filing the paperwork and piecing together care, particularly if you don’t speak the local language.

Wendy Noller is originally from Australia, and now lives in Luzern with her husband, and their two children, aged five and seven.

When they were getting signed up for Kita, she expresses that there were quite a few hurdles to consider.

READ ALSO: How different is raising kids in Switzerland compared to the United States?

Initially they received a letter from Canton Luzern stating that there weren’t enough places for their daughter. “We had heard negative reviews from other expats, but learned that there really are a lot of myths around childcare– that it’s not good quality, or there aren’t enough places. My husband and I work 100 percent and [when registering the kids], found the local authority to be both very helpful and responsive.”

She adds that she would call or email every couple days after receiving the letter to express that they both worked full-time and were really interested in their daughter integrating.

In the end, just a couple days before school started, they were told there was a place available for her. 

While their situation had a happy ending, sometimes other backup plans need to be put in place. Organising childcare in Switzerland is doable and having a fellow foreigner who has gone through it before to help share their experience or how to go about it can make a difference in how easy or how difficult it feels. 

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