Thursday, April 08, 2010

Dear Frau: Why are the Swiss so rich?

Welcome to the seventh edition of Dear Frau. It’s kind of like Dear Abby, except with an international twist. If you have a question, be sure to contact the Frau and maybe your little Frage will be in next week’s Dear Frau Column.

Dear Frau,

Why are the Swiss so rich?

Curious

Dear Curious

Let me count the ways.

First of all, the smallest Swiss bank note is a 10. The next smallest denomination, the SFr 5 coin, is so heavy you can’t wait to get rid of it. The Swiss planned this and price their bottled water accordingly.

Then there’s the 50-cent piece. These things are so small they tend to get lost and can’t be bothered with. Score another one for Switzerland.

And did I mention the smallest coin is 5-cents? This is a country where pennies are not worthy. Round-up, say the Swiss, round-up!

Another reason the Swiss are rich has to do with loyalty. The Swiss support themselves by being willing to pay more for Swiss Made. They even get weird about stuff like strawberries. One of my Swiss friends once wrinkled his nose at the poor little berries from Spain saying he would wait to buy strawberries until the Swiss ones arrived. Imports are shunned here. See photo above--even tattoos are better Swiss Made.

The Swiss are a cash society. People pay with actual money. Not the illusion of it. So use a 1,000 SFr bill to buy a Coke and you’re fine. Try to pay for the same Coke with a credit card? Forget it.

They charge a lot for water. They charge a lot for Chinese food. They charge a lot to throw out trash.

When your wallet gets stolen (yes, there is crime in Switzerland and it’s big business because you have a pay a lot to get your Swiss cards replaced (SFr 30-40 a card)). But American companies replace stolen cards for free. Suckers.

Customer service phone numbers aren’t free to call because the customer is never right in Switzerland.

It costs three times the price to call Switzerland from Switzerland as it costs to call America from Switzerland.

The Swiss make a lot of money on foreigners by making them renew their permit every year and then they purposely take as long as possible to renew it so they can charge SFr 20 for a piece of paper that states the permit is in the process of being renewed.

Whew. There are many more reasons the Swiss are rich, but the Frau is feeling a bit stingy with her time today. Anyone else have a good reason why the Swiss are rich?

27 comments:

M'dame Jo said...

Come on, the strawberries thing doesn't have anything to do with money. Spanish strawberries are harvested green so they can travel and they're just not as good. They're not cheaper, they taste like nothing, and they're not environmentally friendly. Just wait for the swiss strawberries.

I'll refrain from taking your post too literally and commenting everything :-)

Chantal said...

Hi M'dame Jo,

I love local produce and agree it is fresher. But I would say that Swiss strawberries do have something to do with the idea of supporting all things Swiss. I think this is actually a great thing. More countries would be better off (especially the U.S.) if they would support buying local instead of what is cheapest.

Bill Harby said...

"The Swiss don't give discounts," my Swiss wife recently told me. I'd just told her how my American tax accountant had sympathized with my embarrassingly small income in 2009, and given me a nearly 50% "courtesy discount." The wife advised me to forget about any such treatment in CH.

The proof came the other day at the Neuchatel Manor, where we were buying the coolest ever knife holder in the world. They only had the exposition model, so I encouraged the wife to ask for a discount. The clerk looked at us like we must be from Mars, then smiled and replied: "Non." At least she smiled.

Chantal said...

Bill, that's a good point. If they do give discounts, they are for 10% off, like that's supposed to make me really excited...

Adrian said...

As a Swiss now living in the US let me burn off that Swiss fog on a few things. Switzerland and Swiss people are not richer they are only richer relative to other countries, i.e. currencies. As you explained they not only earn more they have to spend a lot more.

The Swiss Franc (and hence, the income) has always been higher in value against probably every currency. Consequently a Swiss on vacation on Mallorca or a shopping spree in New York could spend twice as much as like his German brethren, the Euro has changed a lot though. Also, imported stuff was always cheaper which caused a problem for the local industry.

What you call "Swiss loyalty" was an act of desperation. First with the experience of the World Wars Switzerland knew it has to stay independent with food in times of crisis. In Zurich every Swiss knows or heard about the stories when they harvested potatoes on the Sechselaeutenplatz during WWII. Probably for centuries the Swiss Government is imposing heavy border taxes on imports as well as subsidizing the local farmers. Border taxes are actually on everything that is imported into Switzerland but, nevertheless, the industry had to adjust against cheaper imports. Their solution was quality first, build better products, and second they branded and campaigned their product as "Swiss Made".

This also explains why Swiss are so reluctant and afraid to join the European Union.

Chantal said...

Adrian, thanks so much for weighing in with the Swiss perspective. Very interesting. Funny how "desperation" can lead to some great things like loyalty. It's too bad this hasn't impacted America yet. And yes, the Swiss currency seems to be changing lately, especially against the dollar. In comparison, Swiss salaries are much higher than U.S. salaries. But the Swiss need more to live in Switzerland than Americans do to live in the U.S.

Kay B.Elle said...

That was a very funny post. Thanks!

Chantal said...

Hi Kay,

Glad you liked it!

Kristi said...

I think the credit system here also benefits the consumer/individual, enabling them to have more money. You get a line of credit based on your salary and then what you accrue in credit is then automatically taken from your bank account each month. God knows what happens if you don't have enough to cover your credit charges that month. I am sure you are punished with insane interest rates. There is no "fake" money here, either you have it or you don't or you're screwed. I think the US could learn a bit from this type of set up. Promotion of living within your means is a really good thing...especially these days.

I buy non swiss produce too, otherwise I couldn't afford to get my 5 a day :)

Yo said...

Hmm, I think that Swiss buy Swiss products because they believe in their higher quality. And in 99% of the cases it is true. Swiss know that Swiss products are made by people who are properly trained and educated how to do stuff, therefore they are absolutely reliable. Have you noticed that education in Switzerland is almost a cult, you can not practice any job unless you passed certified training?

In the remaining one percent foreign and Swiss products are the same quality, so why bother taking the risk? Swiss are not risk takers anyway :). My friends here are sometimes almost offended when I make a deal on eBay or on Amazon, but at the same time they will never ever take the risk to purchase something from abroad!

For me the question always is do I really need exceptional quality for every item, and is it worth paying for it. It's just a wine opener, for example, I am not planning to fly in space with it, so why pay 80 CHF?

The discounts part is really interesting! It is probably US phenomenon, I never experienced it in shops in Europe :).

But here is a hint - be very very friendly, try to speak Swiss German, smile a lot and be remembered in your local community. That's how I get vouchers and freebies from the local businesses :). Oh, and if you tip 1 CHF the seller on the farmers market he will be so grateful, that he will fill your tote with free carrots and parsley :)

Stephersplatz said...

I recently lost my Swiss ID card. It cost me 100 CHF and a new passport photo to get a new one. I'm flying back to the US on Monday and this is Switzerland, so of course you can't just try to come back into the country with that piece of paper that says your new ID card is being processed. I had to go to the Migration office and pay another 90 CHF for a short term visa. What a nightmare...

Regarding the discounts. I passed by a restaurant bar near my office today. They had a sign outside that said "Happy Hour, every day 5-7pm, 15% off all drinks!"
Only in Switzerland is 15% off a big deal.

I completely agree on how the Swiss feel on buying local products. I'm all for buying local and organic, but they seem to take it to the extreme. I spent Easter in St. Gallen with my boyfriend's family. His brother is the typical Swiss guy...outdoorsy, health food nut. Throughout the whole dinner he expressed his disgust that the Easter lamb was not from Switzerland.

That's my rant for the day. Honestly,I really love Switzerland. :-)

Chantal said...

Kristi,

I think you're right about the "credit" system. The U.S. could learn a thing or two about that!!

Chantal said...

Yo,

I think some things are worth the money. And some are definitely not. Wine opener a good example!

Americans are much more price sensitive than their European counterparts. American stores always sell everything one sale and it makes me wonder if things really are on sale or that it is a mindset thing!

Chantal said...

Stephersplatz,

I thought you were allowed to go if you paid the price for the piece of paper stating it was being renewed. I hear different things from different people. I was under the impression that Americans are free to enter Switzerland without a Visa anyhow...

M'dame Jo said...

Stephersplatz, maybe I didn't fully understand your ID story, but no country would let you in without a proper ID, even if it is being processed and you can show a receipt. Similarly, I highly doubt that you can get through the American immigration saying your US passport is being renewed and go through with a receipt. It is all about machine readability and biometry these days.

I have a story where I was going through US custom in Montreal because my flight (to Geneva) was stopping in NYC (just stopping, no getting out of the plane for me) but they retained me 2 hrs along with 60 other non US people because the computers were down and that they couldn't record whatever they need to record. Despite having a passport and a boarding pass and not even getting out of the plane in NY. After two hours, the computers were still down, but they let us through (logic, huh?), I caught my plane when the doors were closing, but about 50 people needed to take the previous plane and missed it, despite being there on time with a valid ID... No better that the Swiss, isn't it?

The funny thing is that if this happens, the plane company considers you've been "rejected by immigration" and despite you checking in 2 hrs early, they're not responsible, the immigration is never responsible and you can pay your hotel yourself and hope they'll give you a free spot in the next flight.

Jessica said...
This comment has been removed by the author.
Jessica said...

As an American, who very briefly lived in Switzerland, I will buy a product if it is Swiss-made, even if it means paying a few dollars more. It is almost always better quality in comparison to some of the crap that the US manufactures. I believe part of the reason is because of my love for Switzerland :)

I agree with the fact that the Swiss are a cash society. For me, keeping up with my money was simpler, and I think it actually helped me hang on to most of my money while living there. With the exception of my Swiss Pass, I didn't whip out my plastic to pay for anything! Because Americans are all about direct deposit and credit cards, it seems we spend a lot more because we don't physically watch the money fill and disappear from our wallets. Since anyone can get approved for a credit card these days, Americans tend to live above their means buying unnecessary things, because they will "worry about it when the bill comes."

I completely agree with Kristi that the US could learn a lot about money from the Swiss. I can only hope we do sooner rather than later.

Chantal said...

I think a lot of Swiss Made things a good, but definitely not all live up to the price you pay for them.

And yes, yes, yes. The Americans have much to learn from the Swiss as far as how to save and not to buy things with money they don't have.

Rebel said...
This comment has been removed by a blog administrator.
Marilda said...

because people work a lot and save their money: no luxury, only buy what's necessary

Anonymous said...

But several homelessness charities have warned that the thesis writers strategy could have some major problems.

Anonymous said...

As a Swiss, living in Switzerland, this is an interesting and funny read. Love the Coke vs CC part. I never understand why it is so hard to pay with a 50 or 100 Euro bill in some EU countries, beware if it is even a 200 or 500 bill.. ,-)

I also appreciate the comments.

From a Swiss point of view I can just tell you, that we are not really all that well off. Most of us do have what we need (maybe a bit more than people in other countries, but we don't really have the time to appreciate this *g*), some are way too rich and others struggle. Social system is quite good but you might well get lost in its wheels, once they start turning. To make a more or less comfortable living in Switzerland, we work quite long hours and compared to other EU countries we do work up to older age and maybe also do have less days off (did I mention we are pretty good at complaining? *g*).

About cash / credit: many of the cars roaming our roads are not paid for. People either lease or they have a small credit, which they repay on a monthly basis. Same with credit cards. Those come with annual fees (actually even the bank/debit cards cost money), there's of course a spending limit, theoretically according to your salary, you can repay monthly at an interest rate of about 14 % (which is the discount you agreed upon when buying whatever you are paying back for). It is quite popular to buy other consumer goods like this, as well, but no one would really admit.

Swiss people sometimes might appear humble, offish or are maintaining a low profile, but in our very heart, we are quite a proud people. And in some moments, this really does show ,-)

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