Nothing is left after the fixed costs: inflation is affecting many people in Switzerland.
Jean Claude RaemyEditor Economics
It is easy to save on holidays and other luxuries. When renting and eating less. Inflation is driving those who cannot afford luxury today to the brink of despair. Annual inflation was 2.8 percent in 2022 – higher than it has been for a long time. While a large part of the population can cope relatively well with this rise in prices, people at the lower end of the income scale face major problems.
One way to save on groceries is to shop at one of the 22 Caritas markets at a discount. This is only possible with a special shopping card. It is available to people who live at or below the subsistence level, receive economic social assistance or supplementary benefits to AHV/IV or are in the process of debt restructuring.
The frequency in the Caritas markets increased by 33 percent last year, says Caritas spokeswoman Daria Jenni: “Especially in the second half of the year, the increase in sales was between 30 and 40 percent compared to the same months last year.” According to Jenni, the advisors from the Caritas social and debt advisory service were also confronted with increasing financial concerns from those seeking advice.
“Price inflation only partially reflects the truth”
The big cost shock is still to come: Health insurance premiums will be 6.6 percent higher on average from January 2023. Electricity prices will rise by 27 percent on average in Switzerland from 2023. Added to this are higher ancillary costs and rising rents.
Philipp Frei, Managing Director of the umbrella organization Budgetberatung Schweiz, expects an increasing number of enquiries. “The 2.8 percent increase in prices only reflects the truth to a limited extent – when it comes to essential cost items such as energy, inflation is significantly higher.” Energy costs are currently the biggest problem for those seeking advice.
In a budget consultation, the leeway is explored where savings can still be made – for example in mobility, shopping or holidays. But more and more people are moving to a limit where there is hardly any savings potential, says Frei.
Less and less money for crises
The problem: the savings capital of the Swiss population has been falling continuously for 20 years. For many, there are hardly any reserves for larger jumps in prices. According to Frei, this is not only in the lowest wage brackets, but increasingly in the middle class as well. “Life has been getting more expensive for a long time, this time simply in a bigger jump.”
According to the last Swiss wage structure survey from 2020, the median wage for a full-time position in the Swiss economy as a whole was CHF 6,665 gross per month. Frei estimates that a family of four can make ends meet with this amount. It gets tighter quickly underneath. With as little as 5,000 francs, a family literally lives from hand to mouth.
If it is no longer possible, those affected turn to social institutions – such as the winter aid. This one has its hands full. “Overall, despite the end of the Corona crisis, the number of applications is still well above the level before Corona,” says Daniel Römer (60), Managing Director of the Zurich office.
Before Corona, the Zürcher Winterhilfe supported 30,000 people a year. There are now over 55,000. Römer believes that requests for help will continue to increase. “Especially the energy costs are a big problem for many people.” Römer promises that winter aid has been prepared and has sufficient reserves to help all applicants.
Caritas spokeswoman Daria Jenni agrees. Today around 700,000 people in Switzerland are considered poor. “We expect poverty to increase again in Switzerland,” warns Jenni.