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Top earners benefit, lower wages stagnate: an ever-growing gap is opening up in income and tax policy, as the distribution report from the Swiss Federation of Trade Unions (SGB) shows.
Lower and middle real wages are stagnating: Middle and lower income earners suffer from the increasing wage gap, as can be read in the SGB distribution report. Accordingly, their wages are not significantly higher today than in 2016. The main reason is that many employers charge their customers higher prices but do not grant their employees the cost-of-living compensation.
The burden of health insurance premiums and high rents is particularly significant for these income classes.
Higher wages have risen sharply: However, the management and top earners now have an additional 3,000 francs per month (top percent of wages). The salaries of the highest paid percent have increased in real terms by almost a quarter since 2014. For the first time, over 4,000 people in Switzerland have an annual salary of one million francs or more.
Drivers of the pay gap: The reason for the increasing inequality is the individualization of wage policy through bonus payments. Managers benefit disproportionately from this. Private-sector wage excesses can also be taken over by outsourcing administration; in recent years this has been the case, for example, in the healthcare sector.
Legend: Wages in lower income brackets are stagnating. In contrast, high earners have benefited from wage developments. Keystone/Christian Beutler
Tax and levy policy exacerbates the problem: After deducting taxes and housing costs, normal and low-income earners now have less money to live on than in 2016. Some cantons have begun to reduce income and wealth taxes. Further tax cuts are planned. But the burden of health insurance premiums is also becoming increasingly heavier for lower and middle incomes – also because the cantons only increase premium reductions slightly.
Are you satisfied with your salary?
Yes, I can afford anything I want
Yes, I can afford anything I want
%
Yes, but I live frugally
Yes, but I live frugally
%
No, I would like to have more money available
No, I would like to have more money available
%
No, I have to turn over every cent
No, I have to turn over every cent
%
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The results have been rounded and do not necessarily add up to 100%.
SGB’s proposed measures and demands: “Instead of correcting the unfair distribution of income, the current tax policy increases inequalities,” says Pierre-Yves Maillard, SGB President Distribution report from the Swiss Federation of Trade Unions. “In order to close the wage arrears and the wage gap, substantial wage increases are needed this autumn, especially for lower and middle wages,” demands Vania Alleva, Vice President of the SGB and President Unia.
In terms of tax policy, middle and low earners would also have to be relieved through premium reductions. The planned cuts in income and wealth taxes would go in the wrong direction, making those who don’t need it better off.