Challenging Swiss salaries: how does your employer measure up?
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The state of Switzerland's salaries--too high, too low, or just right--depends greatly on your point of view (or your job). In 2010, Credit Suisse CEO Brady Dougan received compensation totalling SFr 12.7 million, while Chicoree Schweiz in St. Gallen paid workers SFr 12.50 an hour to clean and pack lettuce for 50 hours a week. Somewhere between the two extremes lies a fair wage, and three popular initiatives want to give Swiss citizens a chance to decide what that is.
It is expensive to live in Switzerland. Year after year, in international cost-of-living surveys, Zurich and Geneva rank among the top 10 most expensive cities in the world. Still, we are told, Swiss salaries are so high that they make up for how much Swiss residents are forced to spend on rent, food and other necessities. Right?
Keeping up with the Mullers
Well, not quite. According to the Federal Office of Statistics, when you look at Swiss wages in relation to what they will buy in Switzerland (in statistical jargon, this is called purchasing power parity or PPP), Switzerland ranks only ninth in the EU. So it turns out you'd get more bang for your buck (or punch for your pound?) in the UK, Germany and the Netherlands, for example.
Another fact about Swiss salaries is that in 2010 they went up only 0.8 per cent--but since inflation was 0.7 per cent, the actual pay raise experienced by the average resident was a pathetic 0.1 per cent. Over the past 10 years in Switzerland, wages have increased around six per cent in terms of purchasing power. But this is only taking averages into account. The 40,000 top earners in the country increased their real incomes by over 20 per cent--in some cases, way over. Since 1997, the number of people in Switzerland with an annual take-home pay of over SFr 1 million has more than quadrupled to over 5,000.
Here's another way to think about the difference between the Swiss haves and have-lesses: the average employee is paid SFr 5,823 a month (that's gross, not net, and includes a thirteenth-month's salary). The top 10 per cent of earners, however, receive an average of SFr 10,538 per month, while the bottom 10 per cent earn less than SFr 3,848. It's not surprising then, that nine per cent of Swiss residents are classified as poor.
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What about my salary?
If you are reading this magazine, chances are you are not among the nine per cent living in poverty. Still, you would probably like to know if your employer is paying you a fair wage relative to what other people in Switzerland earn. The Federal Statistical Office (FSO) provides an interesting on-line tool (in German, French or Italian--not English) for figuring out more or less how much an employee should be paid. The tool, Salarium (link in sidebar), requests details about you and your job--length of service, current responsibilities, level of education, and so on. The calculator also asks what part of Switzerland you live in, since residents of Canton Ticino, as an example, earn on average 20 per cent less than people living in Canton Zurich.
Once you have entered your profile, you are presented with a spread of monthly pay rates for men and women whose data match yours. This information was gathered in 2008 from 1.3 million employees in the private sector. It is updated every two...
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