Since 1942, the Swiss wage index has measured the development of gross contractual wages.
Definitions and components
The standardised gross contractual wage is the remuneration stated in the employment contract for a full-time employee.
It includes the basic salary as well as the 13th salary (including any 14th and subsequent salaries), the cost-of-living allowance, holiday pay and holiday allowances. This is the salary before any deduction of social insurance contributions (OASI/IV, LEC, AC, AANP), contributions (ordinary and voluntary) to the LPP occupational pension fund (2nd pillar) and before deduction of taxes, without family allowances and payments in kind. This excludes sporadic salary components (e.g. sporadically paid bonuses, premiums and commissions), the employer's share of lump-sum benefits or pension contributions, and overtime pay.
Supplementing the information given by wage agreements in collective labour agreements, which cover only a part of the economic branches and some 2 million employees, the wage index represents the contractual wage developments of about 5 million employees working in all industrial and service sectors.
The wage index enables the rate of change of (nominal and real) wages to be calculated for men and women in the economy, and for a given period. The index complements information on the level and distribution of wages collected by the Swiss Earnings Structure Survey (ESS) by providing a dynamic and cyclical picture of wage developments in Switzerland.
The wage index provides widely recognised reference wage indicators used at both political and economic level.
The wage index is used to:
- observe the evolution of contractual wages by sector, industry and gender;
- measure the evolution of the purchasing power of wages;
- provide a reference value in wage negotiations between social partners to adapt new or long-term contracts (see indexation);
- act as a basis for other federal indices (e.g. the Coordination Group for Construction and Property Services KBOB); Price supervision PRS;
- calculate the increase of old age and disability insurance (OASI - IV) pensions;
- provide information for decisions on economic policy and the economic cycle;
- compare wage growth in Switzerland with other countries.
Statistical bases and surveys
Like the consumer price index (CPI), the age index is calculated according to a fixed structure Laspeyres price index. The methodology used in 2021 is available upon request.
The current weighting model uses the following factors: economic sectors combined with sex, four age groups, nationality, and hierarchical function combined with sex and work-time percentage rate. During the COVID-19 period, the weighting was especially adapted for the two following activities: health, residential care services, social work and professional, scientific and technical activities.
The wage index is revised periodically to take into account structural changes in the labour market, occupations, enterprises and the economic cycle.
At each revision, the index is calculated using a new baseline (=100 points). The currently updated bases are from 1939 (total and by gender), 1993 (total and by sector), 2010 and 2020.
Until 1993, the wage index was based on the October survey on wages and pay (Federal Office for Industry and Labour). From 1994, data have been provided by the Central Office for Statistics under the Federal Act on Accident Insurance (SSUV).