Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Labour share in Switzerland remains constant

18.03.2014

The contribution of wages to total income in Switzerland has remained constant in the past 30 years. In other developed countries, in contrast, the labour share has fallen, a study supported by the Swiss National Science Foundation (SNSF) reveals. One reason for the stability of the Swiss labour share is the high level of education.

The revenues earned by companies are divided between the employees (in the form of wages) and the shareholders (in the form of profits). In economics, the contribution made by wages to the population’s total income is referred to as the labour share. It is a key indicator of how income is distributed within a country.

This is because the distribution of wage income in society is far more even than that of capital income, which is focused on a small group. A reduction in the labour share tends to lead, therefore, to greater levels of inequality in the national economy, and could weaken social cohesion.

Michael Siegenthaler, Tobias Stucki and Michael Graff of KOF Swiss Economic Institute at the ETH Zurich have investigated the development of the labour share in the countries of the Organisation for Economic Co-operation and Development (OECD) in recent decades. Switzerland apparently has an exceptional role: from 1980 to 2012, the labour share here has remained stable, whilst in most other OECD countries it has fallen.

In Switzerland, the share of wages in total income has been constantly between 65 and 70 per cent. In countries such as France, Italy, Japan, the USA and Sweden, in contrast, the labour share has fallen during the past 30 years from between 65 and 70 per cent to between 55 and 60 per cent.

High labour share due to high level of education


Using data from companies, the researchers investigated the factors that explain changes in the labour share. Alongside weaker trade unions, above all the increased use of computers and the Internet have been responsible for the decrease in the labour share of most OECD countries. “Routine tasks are being done more and more by computers, rather than by people,” says Michael Siegenthaler. This reduces the labour share of total income as in particular less well qualified employees are no longer needed.

In comparison with countries like Sweden or the USA, Switzerland slept through this technological revolution from 1980 to the mid 1990s. After this point, Switzerland was able to dampen the effects of the digital revolution on the labour share, in part owing to its high standards of education, with a relatively high number of qualified employees using computers to perform complex tasks.

Switzerland to lose its special position


Another key reason for Switzerland’s special position in respect of the labour share according to the researchers is the change in the industrial landscape. In the last 30 years, the Swiss industrial scene has moved less significantly towards sectors with low labour shares than has been the case in other countries. “Switzerland has specialised in knowledge-intensive sectors of industry and services that have above-average labour shares,” says Siegenthaler. This has counteracted the decrease in the labour share.

The researchers also investigated the possible future development of the labour share in Switzerland. Their assumption is that computerisation of the workplace will further increase and the power of the unions continue to fall. Therefore, Switzerland will probably have to cede its special position to a certain extent, as the labour share is likely to fall here too by 2020.

Publication
M. Siegenthaler, T. Stucki: Dividing the pie: the determinants of labor’s share of income on the firm level. KOF Working Paper No. 352, February 2014.

Weitere Informationen:

http://www.kof.ethz.ch/de/publikationen/p/kof-working-papers/352/
http://www.snf.ch/en/researchinFocus/newsroom/Pages/news-140318-mm-labour-share-...

Media - Abteilung Kommunikation | idw - Informationsdienst Wissenschaft

Further reports about: Development OECD countries decrease employees income responsible special technological

More articles from Studies and Analyses:

nachricht Brands are Perceived in the Same Way as Faces
28.08.2015 | Leuphana Universität Lüneburg

nachricht “Bank & Zukunft 2015” trend survey highlights the need for banks to reform business models
21.08.2015 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: OU astrophysicist and collaborators find supermassive black holes in quasar nearest Earth

A University of Oklahoma astrophysicist and his Chinese collaborator have found two supermassive black holes in Markarian 231, the nearest quasar to Earth, using observations from NASA's Hubble Space Telescope.

The discovery of two supermassive black holes--one larger one and a second, smaller one--are evidence of a binary black hole and suggests that supermassive...

Im Focus: What would a tsunami in the Mediterranean look like?

A team of European researchers have developed a model to simulate the impact of tsunamis generated by earthquakes and applied it to the Eastern Mediterranean. The results show how tsunami waves could hit and inundate coastal areas in southern Italy and Greece. The study is published today (27 August) in Ocean Science, an open access journal of the European Geosciences Union (EGU).

Though not as frequent as in the Pacific and Indian oceans, tsunamis also occur in the Mediterranean, mainly due to earthquakes generated when the African...

Im Focus: Self-healing landscape: landslides after earthquake

In mountainous regions earthquakes often cause strong landslides, which can be exacerbated by heavy rain. However, after an initial increase, the frequency of these mass wasting events, often enormous and dangerous, declines, in fact independently of meteorological events and aftershocks.

These new findings are presented by a German-Franco-Japanese team of geoscientists in the current issue of the journal Geology, under the lead of the GFZ...

Im Focus: FIC Proteins Send Bacteria Into Hibernation

Bacteria do not cease to amaze us with their survival strategies. A research team from the University of Basel's Biozentrum has now discovered how bacteria enter a sleep mode using a so-called FIC toxin. In the current issue of “Cell Reports”, the scientists describe the mechanism of action and also explain why their discovery provides new insights into the evolution of pathogens.

For many poisons there are antidotes which neutralize their toxic effect. Toxin-antitoxin systems in bacteria work in a similar manner: As long as a cell...

Im Focus: Fraunhofer IPA develops prototype of intelligent care cart

It comes when called, bringing care utensils with it and recording how they are used: Fraunhofer IPA is developing an intelligent care cart that provides care staff with physical and informational support in their day-to-day work. The scientists at Fraunhofer IPA have now completed a first prototype. In doing so, they are continuing in their efforts to improve working conditions in the care sector and are developing solutions designed to address the challenges of demographic change.

Technical assistance systems can improve the difficult working conditions in residential nursing homes and hospitals by helping the staff in their work and...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Networking conference in Heidelberg for outstanding mathematicians and computer scientists

20.08.2015 | Event News

Scientists meet in Münster for the world’s largest Chitin und Chitosan Conference

20.08.2015 | Event News

Large agribusiness management strategies

19.08.2015 | Event News

 
Latest News

Interstellar seeds could create oases of life

28.08.2015 | Physics and Astronomy

An ounce of prevention: Research advances on 'scourge' of transplant wards

28.08.2015 | Health and Medicine

Fish Oil-Diet Benefits May be Mediated by Gut Microbes

28.08.2015 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>