ValueS Middle Switzerland An information magazine of the Federal Statistical Office – Number 1/2013 Special topic: ??? Geneva Plainpalais 2 FSO ValueS Foreword On average... Dr François Baumgartner Director General ad interim, Federal Statistical Office Neuchâtel/Switzerland Let’s assume that you are an “average” reader. According to experts, you have a reading speed of between 100 and 150 words per minute. This means that you will take around 411 minutes to read this edition of ValueS. You will understand around 50–70% of the content and will still remember around 2% of what you have read the day after tomorrow. Or perhaps you are not so average? Middle Switzerland is the subject of this edition of ValueS. In order to plan for the future, it is essential to know where the “middle” or the mean is. Any decimal points required for data on humans sometimes confuse the mean value, for example, the 1.5 children born on average for every woman in Switzer- land or the 198.9 inhabitants per km2. But despite the apparent absurdity of this, the average does have a valuable, recognised value and is even a real talking point sometimes. Take the average weather, for example. A longer and colder winter than average in 2012/2013 was followed by a spring with around 40% fewer hours of sunshine than the annual average since 1959. This figure may explain the mood of some of our fellow human beings... In statistics, it is often useful to condense data volumes – including huge amounts of data – to give one value. This single number describes a phenomenon’s central trend. For example, the long list of the ages of all of a country’s inhabitants is reduced to the arithmetic average age: in Switzerland, this was 41.5 years in 2011. Sometimes, the arithmetic mean is considerably influenced by extreme val- ues. In these cases, statistics make use of the median which divides the observation values into two equally sized halves. One half of the values is above the median, the other half below. What does it mean to be to the right or left of the mean value? This means, for example, having a bi gger or smaller disposable income than average or dying earlier or later than indicated by the statistical life expectancy. Yet in the long-term and in context, averages are an essential way to identify patterns and trends and to monitor change. FSO ValueS 3 Focus on the “middle” Fears about the gradual erosion of the “middle class” or speculation on the ever-increasing burden of com- pulsory expenditure are often at the centre of public debate. Despite wide coverage in the media, the availa- bility of statistical data on the topic is sparse. This gap has now been filled with a study on the trends affec- ting middle income groups and their composition as well as the burden of compulsory expenditure on them. Caterina Modetta uch attention in politics and in the of between CHF 3693 and 7913 belonged to the media is paid to the topic of society’s middle income group as did for example couples “middle”. The financial situation usually with two children with a gross monthly household M 2 lies at the heart of the discussion. In times of eco- income of between CHF 7755 to 16,618. nomic boom the middle income groups in Switzer- Analysis of trends in the middle income group land are said to benefit too little from growth in from 1998 to 2009 has shown that this group is relation to their contribution to prosperity. During not at all homogeneous. Due to its heterogene- a recession it is feared that middle income groups ous composition, distinction is made between an will slide into a precarious existence. Sometimes upper and a lower middle for certain analyses, for conjecture is even made about an increasing po- example for the analysis of household structure. larisation of society with a dwindling “middle”. Although such ideas may appear exaggerated, No polarisation of income groups they do show that the middle income groups are According to the definition used there is no ascribed the role of supporting the state and that evidence to support the hypothesis of a polari- a weakening of this class is seen as a danger for sation of income groups with a “dwindling mid- the social peace and prosperity of the country. dle”. Overall the middle income group remained The Federal Statistical Office’s study, Focus on mostly stable in the period from 1998 to 2009 the “middle”, considers how the proportion of with regard to the upper and lower groups. people considered middle class changed from 1998 Only for the years between 2003 and 2007 to 2009 as well how great the burden of compul- can a trend towards a slight decline in the popula- sory expenditure was during this period. The analy- tion share of the “middle“ be seen. However, the ses are based on data from the Household Budget differences in income between the income groups 1 Further information on the HBS Survey (HBS) of the FSO, which collects detailed did increase slightly on occasion. From 2001 to can be found in this edition on data on the income and expenditure of private 2007, a slight widening of the income gap in par- page 7. 1 households. According to this study, in 2009 a ticular between the lower income group and the 2 person living alone with a gross monthly income middle income group can be observed. See box Who is in the “middle”? Trends in income group proportions, 1998–2009 100% High income 90% 19.5 20.6 18.7 19.7 18.4 19.8 18.4 19.5 20.2 19.9 18.7 (> 150% of median) 80% Upper middle income (> 100% to 150% 70% of median) 30.5 29.4 31.3 30.3 31.6 30.2 31.7 30.4 29.8 30.0 31.3 60% Lower middle income 50% (≥ 70% to 100% of median) 40% 26.5 28.7 28.9 27.6 29.5 29.2 27.9 27.4 27.8 27.8 30.0 Low income 30% (< 70% of median) Total percentages may not add up to 20% 100% as the figures have been rounded. 10% 23.5 21.3 21.1 22.4 20.5 20.8 22.1 22.6 22.2 22.2 20.0 All the variation coefficients < 10%. 0% Source: FSO – HBS 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4 FSO ValueS Trends in middle income group proportions, 1998–2009 1998 Lower and upper middle income group cumulated 2000 Confidence interval 95% 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: FSO – HBS 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% Household structure by income group, 1998 and 2006 –20093 Personal level 100% (6.3) 7.8 7.6 Persons in other 9.6 12.8 13.5 10.9 11.0 10.3 9.8 (2.9) household types 90% (4.3) 6.9 5.4 (0.8) (0.9) 2.3 4.1 (1.1) (2.9) (3.6) 2.3 13.3 10.3 (6.5) 4.9 10.9 8.3 Single parent family with 80% 15.7 child(ren) 19.9 21.4 21.4 70% Couples with 3 children or more 34.2 33.8 60% 38.1 35.9 31.6 43.8 Couples with 1–2 47.4 50% 32.2 child(ren) Couples with no other 40% 47.7 48.6 person in household 30% 29.0 Single person households 21.2 27.8 29.0 17.9 26.8 21.6 20% 18.0 Total percentages may not add up to 100% as the figures have been 10% 16.2 18.3 15.5 15.6 15.8 15.0 rounded. Between brackets: estimate 10.5 11.3 13.7 13.8 showing great variability, variation 0% coefficient > 10%. 1998 2006 –2009 1998 2006 –2009 1998 2006 –2009 1998 2006 –2009 1998 2006 –2009 Low income Lower middle income Upper middle income High income Total Source: FSO – HBS 3 For the years 2006–2009 a pooled sample was used. As the size of the annual sample for the HBS (e.g. 3317 households in 2009) does not allow for analysis of small population groups, as of 2000 three (or four) consecutive years are pooled together for certain analyses so that the sample can be enlarged and therefore the quality of the results improved. Increase in compulsory expenditure family households can be seen, particularly in the in all population groups middle income groups. The proportions in the The hypothesis of an “excessively burdened middle income groups at either end of the scale have class” is not backed up by the study. No excessive hardly changed. The proportion of persons in burdening of the middle income groups through larger family households (3 children and more) compulsory expenditure can be seen either in is also in decline; this is the case, however, for cross-societal comparison or within the period all income groups in the study. The share of per- under observation. The burden of compulsory ex- sons living alone has remained stable or increased penditure has increased for all population groups. slightly for all income groups. On the other hand persons in couple households without children Decline of traditional family households have slightly increased their share in particular in middle income groups in the middle income groups. They continue to Those in traditional family households (couple be well-represented among the highest income with one to two children) are typical for the group, where they make up almost half of this household structure of middle income groups.