Wages, substitution and the wage-dumping debate

The wage gap in figures

Ticino is a low-wage canton by Swiss standards and a high-wage region by Italian standards. Both facts follow from its position between two labour markets. USTAT's analysis of the Swiss Earnings Structure Survey for 2022 shows the resulting hierarchy within the canton. The median standardized gross monthly wage of Swiss citizens working in Ticino was CHF 6,462, that of foreign workers CHF 5,000. Among foreigners, holders of a settlement permit (C) earned a median of CHF 5,632, holders of a residence permit (B) CHF 5,117 and cross-border commuters (G) CHF 4,756.¹ On the Italian side, a monthly income of CHF 4,756 corresponds at current exchange rates to a salary that few employers in Como or Varese pay for comparable work. The same amount is below the median wage of the canton and well below the Swiss median.

The raw difference between the median wages of Swiss and foreign workers in Ticino was 22.6 per cent. USTAT shows that most of it reflects differences in occupation, sector, education, age and position. After these structural factors have been taken into account, the residual gap falls to 8.6 per cent, with adjusted gaps by permit category ranging from 5.5 per cent for settled foreigners to 8.9 per cent for holders of residence permits.² The residual gap is the part that cannot be explained by the observed characteristics. It may reflect unobserved differences in experience and language, the bargaining position of workers who live in a lower-wage country, or discrimination. Its existence is the statistical basis of the political argument that cross-border recruitment depresses wages in Ticino. Its size, which is much smaller than the raw gap, is the basis of the counter-argument that most of the difference reflects the jobs that commuters take. Common misconception. It is often said that cross-border commuters in Ticino are paid about a quarter less than Swiss workers for the same job. The figures of the Earnings Structure Survey for 2022 do show a raw gap of 22.6 per cent between the median wages of Swiss and foreign workers in the canton. Most of this gap, however, reflects differences in occupations, sectors, education and position. After these factors are accounted for, the unexplained difference is 8.6 per cent for foreign workers as a whole and between 5.5 and 8.9 per cent for the individual permit categories.³ The residual gap is real and politically significant, but it is about a third of the figure often quoted.

Substitution or complementarity

The second question is whether cross-border commuters displace resident workers or fill positions for which no resident workers are available. The answer differs by sector and has been disputed for two decades. In manufacturing, construction and health care, the canton's own labour supply has long been insufficient, and USTAT's analysis of the cantonal economy describes the commuters as filling shortages of local labour in health, construction and tourism.⁴ In the services that employ Ticinese school-leavers and graduates, such as retail, administration, information technology and finance, the arrival of commuters with comparable qualifications creates real competition. Studies commissioned by the Confederation on the effects of the free movement of persons have generally found limited displacement at national level, while observing stronger effects in the border regions, including Ticino.⁵

The cantonal labour market figures are consistent with both readings. In the third quarter of 2025 Ticino counted 242,169 persons employed under the domestic concept, of whom 169,331 were residents and 79,812 cross-border commuters, together filling 254,129 positions, or 206,143 full-time equivalents. The unemployment rate according to the ILO definition was 6.0 per cent, while only 4,294 persons were registered as unemployed with the regional employment offices. At the same time 16.8 per cent of firms reported difficulties in recruiting staff, and 1,327 positions were vacant.⁶ In the fourth quarter of 2025 the number of ILO-unemployed rose to 12,166, an increase of 14.2 per cent over a year earlier, while employment fell by 1.6 per cent. USTAT described the development as a cyclical weakening.⁷ The difference between the ILO rate and the rate of registered unemployment is particularly large in Ticino, where many persons without work, especially young people and women returning to the labour market, do not register with the employment offices.

Notes

1. USTAT, Notiziario statistico 2025-18 (Giubiasco, 28 May 2025), https://www3.ti.ch/DFE/DR/USTAT/allegati/news/252079ns_2025-18.pdf (median standardized gross monthly wages 2022, private and public sector). ↩
2. Ibid. ↩
3. Ibid. ↩
4. Giancone (above). ↩
5. State Secretariat for Economic Affairs (SECO), annual Reports of the Observatory on the Free Movement of Persons between Switzerland and the EU. ↩
6. USTAT, Notiziario statistico 2025-42 (above). ↩
7. USTAT, Notiziario statistico 2026-07 (above). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.