Switzerland - Working conditions

The educated and skilled Swiss workforce, the elaborated laws promoting labor flexibility and safety, and the agreements between the influential trade unions and employers' associations have protected Switzerland from significant labor unrest. The unemployment rate dropped to 1.7 percent in September 2000 and the rate is likely to stabilize, as the principal component of unemployment was caused by the disparity between the required and offered qualifications and mostly unskilled workers continued to have problems in finding jobs. This rate of unemployment was the lowest one since December 1991 and substantially below levels prevalent in EU countries (the most favored of which, Luxembourg, had a rate of 2.2 percent in July 2000, while the preliminary EU rate for August was 8.3 percent).

The economic stagnation from 1991 to 1997 had a major impact on the labor market. Over this period, 255,000 jobs (in full-time job equivalents) were lost. Surprisingly, however, the unemployment situation improved dramatically from a rate of 5.7 percent in February 1997 (the highest in decades) to the low level found in 2000. Indeed, statistics tend to underestimate the real level of unemployment, and if the number of persons in active labor market programs, retraining schemes, and temporary jobs are added, that would raise the underlying rate of unemployment by probably 1 percentage point. Rising employment has also enabled the government to almost halve the number of publicly sponsored jobs, to 7,106 in August 2000 from 13,095 just a year earlier. The ratio of long-term unemployed among all unemployed remained relatively high at 20.9 percent in August 2000, and this number did not include those who fell out of the statistics after reaching the end of the benefit entitlement period (a total of 1,078 persons).

Mutual recognition of academic degrees, diplomas, professional certifications, and social security entitlements was an important element of the recent agreements with the EU aimed at increasing labor mobility . The government envisages the scrapping, over a 6-year period, of the Swiss quota system for work permits for EU and European Free-Trade Association (EFTA) citizens, although limits may be introduced again if inflows of immigrants are stronger than expected. After 7 years, Switzerland can opt out of the pact or continue with it for another 7 years. At this point, freedom of movement for EU and EFTA citizens will become permanent.