Currently, the talk of the media is the growing deficit and sky-high unemployment in the U.S. The worst issue is unemployment among the young people who, in many cases, have completely missed their entry into the professional world due to lack of opportunity, and the tendency of unions to favor current employees at the cost of the next generation. These are economic defects that are difficult to correct and will need a long time to rebalance.
The Swiss Job Machine
Many Swiss like to complain about similar issues, but they are complaining on a very high level. Even during the financial crisis, the Swiss government was able to present a budget surplus and lower the national debt, while even adding some measured stimulus initiatives. One of the main reasons might be the Swiss job Machine, which produces world-class results, although it is not very well-understood. In March 2011, unemployment stood at 3.4%, down from 4.2% in March 2010. This result was achieved in spite of, or probably rather, because of, some 60,000 foreigners entering Switzerland for work. Current unemployment stands at 22,000 open jobs, or roughly four months’ worth of immigration of foreign workers. To put the icing on the cake, unemployment among the 15-24 year old professional starters stands only slightly higher than the average at 3.5%. That shows promise for the future!
Keep Feeding the Machine!
As seen above, the Swiss economy is nearly at full employment. Growth requires feeding! With the growing demographic dearth of new job entrants, economic growth in Switzerland will require additional highly qualified foreigners joining the Swiss workforce. With an already high 21.9% of the population being foreign-born, the need to explain the beneficial effect of additional migration of highly qualified people will grow. A populist and simplistic backlash would have a dire effect on the Swiss economy!
Spill-Over Effect in the USA
There is much talk about the balance of trade between our two countries. I think in times like these, when there is high unemployment, a much more important economic factor should be the balance of jobs. The “jobs balance” results from jobs offered by companies of a foreign country in the USA minus the jobs offered by American companies in that country. For Switzerland, the jobs balance with the US computes as follows: According to OECD data, Swiss companies offer 395,000 jobs in the US, while US companies offer 81,000 jobs in Switzerland. The jobs balance thus stands at 313,000 in favor of the US and it makes Switzerland the country with the highest jobs balance of all European countries in the US, by far. The US only has a positive jobs balance with four other countries (The Netherlands +143,000, Belgium +50,000, Luxembourg +22,000, and Finland +8,000). Quite an achievement for this little land-locked country in the Alps, and a great demonstration of the Swiss Job Machine!