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High salaries aren’t what they seem in Switzerland

If you are a male banker, a Swiss diplomat or a foreign CEO in Switzerland, chances are you are living quite comfortably on a salary of six to seven figures. But for many others, high salaries in Switzerland aren’t exactly what they seem. 

With an average salary of CHF6,538 ($6,750) per month it is no wonder that Switzerland is considered one of the most attractive places to work. Average salaries across many professions are higher than what you find in other countries. For example, a pre-school teacher in Switzerland makes CHF4,900 compared to around CHF2,400 in the US.  

A salesclerk earns around CHF4,400 and a trained bricklayer with over four years’ experience earns CHF5,500 a month. In other countries, these jobs might earn just over the minimum salary. 

But, deduct mandatory contributions to pensions and unemployment insurance and another 20% of gross income for rent and utilities, and the salary doesn’t look quite so generous. Unlike in many other countries, taxes and health insurance are also not automatically deducted from wages in Switzerland.  

Add to this sum, transport costs that drain an average 8% of gross income, some of the most expensive childcare in the world, and food, drink and leisure on the so-called “high price island”, the salary looks even more mediocre. Households with a gross monthly income of under CHF5,000 are unable to save any money according to government statistics.  

There are growing concerns that salaries are stagnating while cost of living continues to rise, with particularly dire consequences for low-paid workers. Some 320,000 jobs – about 12% of workers – are considered low paid. 

“Health insurance premiums and rents are on the rise, while wages are only increasing moderately. This is why times are getting tough for the Swiss lower middle-class,” says Professor Robert Fluder from the University of Bern. 

Women and foreign residents are more frequently found in low-paid jobs. The latest statistics show that half of all low paid jobs are done by foreign residents and about the same portion is offered by companies with fewer than 50 staff. 

In a wealthy country like Switzerland, people on a low income are often forced to spend much more than necessary, making it especially hard to make ends meet. Even people in the lower-middle-income bracket risk slipping down the ladder. 

“People on a low income are under a great deal of pressure in Switzerland,” explains Andrea Schmid-Fischer, president of the consumer organisation Budget Advice Switzerland.  

Paula Troxler (Illustration)