Real wages in Switzerland fell last year by more than half a per cent, despite strong economic growth and falling unemployment. The fall comes against a backdrop of record low unemployment and strong economic growth.

The latest figures from the Federal Statistics Office suggest that 1999 was a bad year for Swiss wage earners.

Real earnings declined by 0.6 per cent, while nominal income - wages that have not been adjusted to take account of inflation - was virtually stagnant, compared to rises of 0.5 per cent in 1997, and 0.8 per cent in 1998, when inflation was virtually zero.

Throughout the 1990s, real incomes in Switzerland declined in four years out of the ten, but these falls mostly came in the first half of the decade when the country was in recession.

This latest drop in wages comes against a backdrop of record low unemployment and strong economic growth. This suggests that workers in Switzerland are coming under the same pressure as their counterparts in many other industrialised nations, where the link between wage levels and employment no longer applies.

Between 1998 and 1999, workers in Switzerland's services sector saw their nominal incomes rise by an average of 0.4 per cent. This was offset by a smaller rise in the industrial and agricultural sectors of just 0.1 per cent.

The fall in wages also did not apply uniformly across the sectors. In banking and information technology, wages rose by between 1.5 and two per cent, while builders and public sector workers saw declines of 0.7 per cent.

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