Social Security on the Defensive

The Great Depression led to social plight in many areas of Switzerland. However, policymakers remained divided on a suitable response to the crisis. The cities were the first to act by expanding welfare. The Confederation only began to actively address unemployment at a later stage.

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The Great Depression posed a major challenge to the state. The crisis hit Switzerland relatively late due in part to the country’s upturn in the second half of the 1920s. However, the economy did not recover until 1937. National income fell by almost 20 percent as a result of the crisis. In the winter of 1936, the unemployment rate spiked at seven percent of the workforce and was even higher in industrial regions. The burden on the population was further exacerbated by the deflationary economic policy pursued by the bourgeois parties and business associations. They held on to the gold parity of the Swiss franc, ran contradictory domestic and taxation policies, cut wages and only took selective action in the economy, for the benefit of the agricultural sector for example. The bourgeois parties battled against deficit spending as stipulated by the defeated 1935 «crisis initiative» proposed by the federation of trade unions.

The crisis and hesitant economic policy bore bitter consequences: the number of people in need of aid soared to almost 20 percent of the population. In Neuchâtel and other cities, the welfare budget doubled between 1929 and 1937. Elderly or disabled people who only had limited financial means were hit particularly hard. As they had done in the First World War and post-war periods, cities again set up soup kitchens, workers’ shelters and emergency accommodation. Still less than a third of working men and a fifth of working women were insured against unemployment. The disbursements and membership figures of unemployment funds therefore soared during the crisis. At the end of 1931, the Confederation re-established support for jobseekers no longer entitled to benefits, which had been suspended in 1924. However, it left the major burden of unemployment aid to the cantons and municipalities. It was not until pressure came from the left-wing crisis initiative that the Confederation became involved in job creation. The effects of which, however, were not palpable until the devaluation of the Swiss franc in September 1936 and the gradual economic recovery.

Literatur / Bibliographie / Bibliografia / References: Müller Margrit, Woitek Ulrich (2012), Wohlstand, Wachstum und Konjunktur, in P. Halbeisen, M. Müller, B. Veyrasset (ed.), Wirtschaftsgeschichte der Schweiz im 19. Jahrhundert, 91–222, Basel; Tabin Jean-Pierre et al. (2010 [2008]), Temps d’assistance. L’assistance publique en Suisse romande de la fin du XIXe siècle à nos jours, Lausanne.