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Swiss Salaries to Rise in 2009

According to economists at UBS, Swiss salaries declined on average in 2008. The UBS analysts neglected to mention whether salary declines in Switzerland were aided or offset by remuneration packages paid to UBS executives.

The UBS study, which surveyed over 350 companies and more than a dozen sectors of the economy, concluded that salaries in Switzerland would rise in 2009. the projections are based on projected rises in compensation packages minus the effects of increases in the cost of living.

In 2008, salaries declined roughly .5% as a result of steep increases in the cost of living in Switzerland, notably in raw materials (gas and food) as well in rent.

Economists are betting on a trend reversal in 2009, based on the supposition of both salary increases and price deflation (or at least stagnation) based on the projected economic slow-down. The UBS analysts believe that inflation will fall below 1.4% in 2009. The net result, if the analysts are correct, will be a 1% gain in purchasing power on average.

Last week, Migros announced salary increases for its 88,000 strong workforce of roughly 3%, as well as a raise of their minimum salary from CHF 3300 to CHF 3700. The measure is expected to cost Migros approximately CHF 130 million, but the management at Migros believes the measure will buy them an important amount of confidence and good will in this period of turbulence in financial markets and the economy. Other sectors announcing wage increases: construction industry. The salaries of jobs in building and construction will rise 2.4% following vigorous negotiations and conflict between company owners and the unions.

The largest wage increases are expected to be for jobs in the IT and telecoms fields (+3%), as well as the luxury watch brands (2.9%) and the machine industry (+2.8%). Jobs in banking and finance and jobs in insurance are expected to see salary increases of slightly less than 2%.

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