A recent report shows welfare spending increased 53% over ten years. From 2005 to 2015 it rose from CHF 1.7 billion to CHF 2.6 billion.
These figures only include cash payments. The sum is even more significant when other elements are included. Once added the bill rises to around CHF 8 billion. In 2005, the same figure was around CHF 5.3 billion. Most of the difference (CHF 4 billion) is help paying for health insurance.
Part of the rise in welfare expenditure is driven by rising numbers. The number of beneficiaries has risen 11.8% from 237,000 to 266,000.
The percentage of the population on welfare varies noticeably by canton. In the French-speaking cantons of Neuchâtel (7.2%), Geneva (5.5%) and Vaud (4.8%), it is well above the Swiss average (3.2%). The German-speaking cities of Basel (5.9%) and Bern (4.2%) are also well above the national average. More rural cantons, such as Graubunden (1.3%), Uri (1.1%), Obwalden (1.0%), Nidwalden (0.9%) and Appenzell-Innerrhoden (0.8%) have managed to avoid large numbers of beneficiaries. So have some largely urban regions such as Luzern (2.2%) and Zug (1.7%).
The rest of the rise in spending is driven by increased spending per recipient.
The Swiss social welfare association, CSIAS, points out that welfare spending has grown at a faster rate than Swiss GDP, which grew by around 20% over the ten-year period.
The organisation also offers some explanation for the rise in spending. In 2012, laws around the amounts paid by Switzerland’s social security system, which provides disability, unemployment and other payments to those who pay into it, were adjusted. In the same year, welfare spending jumped 16.5%.
In addition, they noticed the number of households of one person receiving welfare had risen. Two thirds of welfare recipients live alone. Over the decade to 2015, the number of such households receiving money rose by 30%. It is costly to live alone.
This has been accompanied by a marked rise in long-term unemployment. Over the ten-year period, long-term unemployed (more than 4 years) rose from 17.7% to 29.4%, according to the Federal statistical office. CSIAS reckons this is due to a structural shift. Technological progress demands higher levels of education. This has left unqualified people out of work. In 1970, 40% of Swiss workers had no professional qualification and only 5% were university graduates. By 2010, only 15% were unqualified and 25% had graduated from university.
Switzerland’s education system is different to many other parts of the world. Relatively few go to university. At the age of 12 or 13, schools typically stream children into two groups: those who might go on to university, and those who will most likely study something less academic. Streaming is based on state exams and academic performance during the year. Professional training in Switzerland is broader and less focused on university.
The rise in the number of qualified workers echoes changes in the workplace, and a sharp decline in demand for unqualified people. Even employers in fields like hospitality, cleaning and care, are now demanding professional qualifications. Between 2007 and 2009, the unemployment rate for those with no qualifications was 9.6%. By 2010 to 2012, it had risen to 10.5%.
Around 57% of long-term unemployed have no professional qualifications.
CSIAS recommends efforts to train unqualified people to boost their chances of finding and staying in work.
Report on the evolution of welfare costs PDF (in French) – Take a 5 minute French test now
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