Your salary number is not the whole story. What matters is what that number can actually buy, which is where real wages come in.
KOF, the economic research institute linked to ETH Zurich, expects Swiss real wages to keep climbing. The institute sees real wages gaining 0.7% over the next 12 months, which beats the past decade's 0.2% average real wage growth. KOF projects that Swiss workers will see their purchasing power improve again, surpassing the long-term norm.
It is a solid bump, though it trails last year's 1.6% gain. The forecast comes from a survey of about 3,500 private-sector companies, which gives it a pretty wide lens on the job market. It is not just one industry or one region moving the needle.
Real wages matter because they determine what an income can buy in everyday terms. Positive growth helps households rebuild purchasing power lost during the recent stretch when prices rose faster than salaries. Even a modest rise like the one KOF projects can support consumer spending and help families recover some of the ground lost during the recent inflation squeeze.
The improvement marks a shift from recent years, when real wages dropped. A chart from the Swiss Federal Statistics Office, titled "Swiss Real Wages Recover After Dropping in Recent Years," shows year-on-year change since 2010 and illustrates the recovery. The wage forecast follows a report that the Swiss economy expanded at five times the anticipated pace during the second quarter.
If this momentum continues, it could eventually push the Swiss National Bank to alter its current expansionary stance. Last month, Bloomberg reported that the central bank sees its policy rate staying at 0% until 2028 in the absence of unexpected shocks. This outlook matters for households that have felt the squeeze of rising prices over the past few years.
A real wage increase means workers can afford more goods and services without dipping into savings, which could help sustain consumer demand. The KOF survey, conducted twice a year, gathers responses from a broad cross-section of companies, making it a reliable indicator of wage trends.
Switzerland's labor market has remained tight despite global headwinds, with unemployment hovering near historic lows. This dynamic has given workers some bargaining power, though employers in export-oriented sectors face pressure from a strong franc and slowing demand in key trading partners. The KOF data captures these competing forces, offering a snapshot of how companies are balancing wage costs against profitability.
While the projected growth is modest, it signals a gradual recovery in purchasing power after several years of declines. Economists will watch whether this trend holds, especially if global trade tensions or energy price swings re-emerge.
KOF said construction will see the biggest salary increases, while pharmaceuticals, chemicals, and banking are scaling back raises relative to last year. These cuts stem from U.S. tariffs, elevated energy costs, and the merger of Credit Suisse into UBS, according to the institute.
