Wages will rise in the coming year like they haven’t done in a long time. Inflation is eating away at some of it, but in the long run workers have extremely good cards to play.
It is the highest increase in 15 years in Switzerland and that should please employees. The wage increase for the coming year is 2.2 percent. This is according to the latest survey of the bank UBS on Tuesday. Accordingly, the wage settlements double those of 2022 of 1.1 percent.
In all 22 surveyed industries, both for the year 2022 as well as for the year 2023, a nominal wage increase has resulted.
Recovery after pandemic
According to the survey the highest wage increases of 3 percent were recorded in wholesale, IT and telecommunications, also in Swiss watches and jewelry.
A wage increase of 3 percent also resulted for workers in tourism and hospitality, which benefited from the recovery after the pandemic, it added.
The metal and textile industries as well as the media sector brought up the rear in this year’s wage round. However, the nominal wage increase of 2 percent is still robust, even for these three sectors.
Give and take
UBS economists expect inflation to reach 2.9 percent this year, actually resulting in an average real wage loss of 1.8 percent. According to the credit institute, this is the sharpest decline since 1942.
The demand for wage compensation for the inflation surprise is being addressed by three-quarters of companies in this year’s wage round. However, only about 20 percent of the 290 companies surveyed fully compensated for inflation.
With UBS expecting inflation of 2.1 percent, real wages are thus likely to be virtually stagnant on average in 2023.
But that is only the short-term effect. In the long term, employees can look forward to real wage increases.
80 percent complain
In addition to inflation, the shortage of labor is also posing challenges for companies. According to the UBS survey, four out of five companies are experiencing some difficulty in recruiting. In addition, it can be observed that this staff shortage is becoming more widespread.
While in 2016, for example, only 17 percent of respondents said they had problems filling positions in more than one of six business sectors, this figure increased to 50 percent in 2022.
Shortage, shortage, shortage
There is an increasing shortage not only of skilled workers, but of workers in general, UBS said in this regard.
The majority of respondents (63 percent) see demographic change as the main reason for the worsening personnel shortage. Big challenges of personnel recruitment therefore remain.
In the short term, real wages are under pressure due to inflation. But in the long term, real wages can be expected to rise due to the shortage of labor, UBS said, giving employees some hope.