Swiss Salary Survey Sees Smallest Pay Raises in Decades Are Coming

Swiss National Bank President Thomas Jordan won’t be getting much help from wage increases in his long-running quest to stoke inflation.

A UBS Group AG survey of 325 companies found nominal wages are expected to rise by just 0.3% in Switzerland next year. That’s the slowest increase since 1999.

Swiss Salary Survey Sees Smallest Pay Raises in Decades Are Coming

Like many advanced economies, Switzerland has faced anemic price pressures for years, not least because the currency -- which has been steadily appreciating -- has an outsized impact on prices.

Yet until the Covid-19 pandemic tipped the economy into its worst recession since the 1970s, SNB officials could at least take comfort from a tight labor market.

Deteriorating prospects on the jobs front are now likely to erode bargaining power.

UBS’s Daniel Kalt and Florian Germanier found that 12 of the 22 sectors in their study -- including areas like tourism and sport that have been hit by the pandemic -- foresee stagnant wages for 2021. Only one fifth of companies expect an upturn in the Swiss economy in the coming year, and 82% predict higher unemployment.

©2020 Bloomberg L.P.

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