Repercussions of the crisis in Switzerland and trade union responses
Rita Schiavi, Member of the Unia Executive
The global economic crisis has had virtually no impact on the Swiss building industry as of the end of 2009. On the contrary: we see that the building industry in Switzerland is still working at almost full capacity. There are two explanations for this:
- Building investments have a relatively long planning period. Current construction work was generally planned before the first signs of the crisis became apparent.
- Some of the contracts involve publicly financed infrastructure investment which is not at risk. On the contrary: they have even been brought forward to some extent for the purpose of counteracting the crisis. On the other hand, the Swiss population has grown in recent years, especially on account of heavy immigration. The investment in residential construction is not speculative, but the response to a need.
The building industry is, however, expecting a reduction in demand in the coming years, particularly in residential construction, on account of the fact that the flow of workers from the EU has also declined since the start of the crisis.
The biggest casualty of the crisis in Switzerland is the export industry – except for the pharmaceutical sector! It has been possible to moderate job losses in the engineering and watchmaking industries and especially among companies supplying the automobile industry by introducing short-time working. The number of employees affected by short-time working is very high by Swiss standards, though. An initial extension of the period of short-time working as demanded by the trade unions was approved by parliament, and it is quite possible that a second extension will be approved in spring 2010, if the economy has failed to recover sufficiently by that time.
The package of measures demanded by the trade unions to combat the crisis was rejected by parliament apart from the extension of short-time working. Switzerland has invested less in measures to boost the economy than any other country in Europe. The self-serving attitude of the Federal Council implies that Switzerland will be a prime beneficiary of economic stimulus programmes adopted by the EU countries on account of the fact that our export industry is heavily dependent on EU demand. In other words, they will watch idly as the EU countries and the USA get into debt to finance economic stimulus packages, and look forward to being in the best position with the lowest rate of indebtedness at the end of the crisis! The only major effort made by Switzerland concerned the rescue of its own banks: overnight and without consulting either the people or parliament, the government made CHF 68 billion available to rescue UBS.
An important demand aimed at supporting purchasing power, namely an increase in the health insurance subsidies, was rejected. The massive rise in health insurance premiums in 2010 will deprive the population of CHF 2-3 billion in purchasing power. We predict that this loss of purchasing power, together with an increase in unemployment, will have a detrimental effect on consumption in 2010.
By the end of 2009, unemployment had risen to 4.2% in Switzerland. An increase to 5% is forecast for 2010. The unemployment figures fail to reflect the actual situation adequately, however, on account of the fact that social welfare recipients, the underemployed and job seekers who participate in employment programmes and undertake further education measures, are not included in the figures.
At the present moment in Switzerland, instead of expanding social insurances, which would not only be sensible but necessary in the crisis, an unprecedented attack on the social welfare institutions is taking place: a year ago, parliament approved a reduction in occupational pensions for future retirees of 10% from the present level. To fight this, the trade unions, consumer protection organisations and left wing parties have sought a referendum. The ballot on this “pension theft” will take place in March. Parliament will deliberate and probably approve two further cut-back proposals in March: a curtailment of unemployment insurance as well as an increase in pensionable age for women in the state’s old-age pension scheme. We have already announced a referendum against these two cut-back proposals as well. Other curtailments are being planned in the disability and accident insurances.
In Switzerland, thanks to direct democracy, we have a way to fight most social cut-back measures through political channels by means of referenda. This is done in association with other progressive forces who have joined together to form an “alliance against the crisis” in some regions of Switzerland.
Trade union resistance to job losses and pay cuts in companies was more difficult. We have supported the workers wherever they were prepared to put up resistance. In some cases with success: at Alu-Menziken, for example, it proved possible to prevent a pay cut of 10%.
In order to strengthen the economy, we demanded wage rises of 2-3% in the autumn wage negotiations, although inflation was slightly negative. On average, we achieved only half.