500 a month is a good income
Compared to other European countries, the Swiss wage level appears very high. However, if you take a closer look at household budgets and spending, you can see that high incomes are not as high as they seem.This content was published on September 5th, 2017 - 11:00 am
When the Swiss get involved in discussions about wages abroad, they usually try to change the subject. Or lies are served up. How can you explain that the equivalent of 5,000 or 6,000 euros in wages in Switzerland cannot be compared directly with an income of 1,000 or 2,000 euros in a euro country?
In order to understand the income situation, it is worthwhile to draw up a budget. swissinfo.ch does this with information from the Federal Statistical Office on household incomes and expendituresExternal link.
Mr. Mustermann is our average Swiss. He is single, 30 years old, a commercial clerk in a financial company. And he earns the median income of a single person, that is 6250 francs (5450 euros).
It is a hypothetical mean, because in truth there can be large fluctuations in this job. The wage, for example, depends on the region. In Zurich, higher wages are paid than in Lugano.
According to the wage bookExterner Link der Schweiz, Mr. Mustermann could earn 7,000 francs in Zurich, while in Lugano he would only earn 6000 francs with the same job.
Provision, rent, taxes
At the end of the month, however, Mr. Mustermann's account is not credited with 6,250 francs. This is because the shares for old-age and survivors' insurance (AHV) are automatically deducted from the gross wage, as well as unemployment insurance, non-occupational accident insurance and the pension fund - a total of around CHF 550. 5700 francs land on Mr. Mustermann's account.
He has to pay his income tax from this amount. In contrast to many other countries - Germany or Italy - taxes are not deducted directly from wages. In our example, a tax amount of CHF 850 per month has to be budgeted. However, it must be specified that the taxes can vary greatly depending on the canton, sometimes even depending on the municipality.
Now you have to think about the expenses related to living: rent, electricity, heating, water, waste fees and much more. The rent is maybe 1250 francs for a small apartment. The rent can easily increase by 500 francs as soon as the apartment is a little bigger. And in cities like Zurich or Geneva, an apartment with 3 1/2 rooms (three rooms and a kitchen-cum-living room) can quickly cost more than CHF 2,000 a month.
Health insurance premiums as chunks
The monthly fixed costs also include health insurance premiums. Health insurance is compulsory. And the premiums put a heavy strain on the household budget. For a single person, CHF 330 per month is quite normal. In the case of a married couple - this is not the case with Mr Mustermann - this amount doubles (there is no group discount!). And for each minor child, at least 100 francs per month must be estimated. For a family with two children, the sum of the health insurance premiums can reach CHF 1,000 per month.
Then there is other insurance. In contrast to many Swiss people, Mr. Mustermann has not taken out insurance for and against everything. He makes do with a minimum: liability (compulsory in some cases) and vehicle insurance. But this also adds up to another 100 francs.
Finally, expenses for telecommunications must be subsumed under the fixed costs. The fees for radio and television, cable or satellite connection, mobile phone. That easily adds up to 150 francs a month.
After Mr. Mustermann has paid all fixed charges and bills, he still has - roughly estimated - 3,000 francs left. A nice sum, one might think. But so far, no expenses for transport and mobility, which amount to CHF 460 per month (petrol, amortization of a car, repairs, tickets for public transport) have been taken into account. The amount in your wallet melts again.
Ultimately, body and mind must also be kept alive. Shopping in a Swiss supermarket is much more expensive than in Germany, France or Italy. The price of meat in Switzerland is 152 percent higher than the average in the EU countries. Switzerland is 34 percent more expensive for clothes.
Poverty in rich Switzerland
Groceries are already expensive. But if you go out to eat, you have to be prepared for a particularly salty bill. You can easily spend 30 francs on a pizza, a beer and a coffee in a restaurant. The price comparison in the Big Mac IndexExternal Link shows that this burger sells for $ 4.80 in Italy and for $ 5.30 in the US. In Switzerland it is $ 6.74, the highest price in this comparison list. Restaurants and entertainment quickly add up to 700 francs per month.
In this hypothetical calculation, however, further expenses are missing. A single person spends an average of CHF 215 per month on gifts or invitations to dinner. Since Mr. Mustermann is a curmudgeon, we have not included this item in the budget. Any maintenance payments for children living with the ex-wife or policies for life insurance were also not taken into account (on average 360 francs).
Mr. Mustermann can count himself lucky. He has a good job. After deducting all fixed and variable costs, he still has 850 francs in his pocket. But if only one variable changes - for example a higher rent for a slightly larger apartment or maintenance payments for children - it can be tight with a wage of 6250 francs per month. In any case, big jumps cannot be made.
In addition: A consistent part of the population dreams of the salary that Mr. Mustermann receives. Because they do not come to a gross income of 6250 francs / month. Around half a million of the eight million people in Switzerland are classified as poor. Another million people are at risk of poverty.
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