Services, including retail, trade, banking, and insurance, employ some two-thirds of Swiss workers. In contrast, manufacturing employs fewer than one-fifth of the workforce, and only about 5 percent of workers are employed in agriculture. Switzerland’s unemployment rate is very low in comparison with most other countries, regularly standing at less than 5 percent. Switzerland has among the highest rates of female participation in the workforce in Europe.

Employer-employee relations have generally been good. The Swiss Federation of Trade Unions (Schweizerischer Gewerkschaftbund), founded in 1880 and linked with the Social Democratic Party, is a coalition of more than a dozen individual trade unions representing nearly 400,000 workers. Other major unions include the Swiss White-Collar Federation (Vereinigung Schweizerischer Angestelltenverbände) and the Confederation of Christian Trade Unions (Christlichnationaler Gewerkschaftsbund). With about one-fifth of workers belonging to a trade union, Switzerland has among the lowest unionization rates in Europe. Since the Great Depression of the early 1930s, the unions have generally denounced the use of strikes as economic and political weapons, and disputes are usually settled by arbitration.

In matters of taxation, federal regulations extend mainly to customs duties, value-added tax, and a federal income tax. In general, income taxes, apart from the federal income tax, are cantonal responsibilities, and rates are fixed decisions of the voters of communal or cantonal parliaments. Although tax rates vary from canton to canton, Switzerland has among the lowest income and social-security tax rates in Europe.

Transportation and telecommunications

Control of the most important Alpine passes and the ancient route through the Mittelland between the Rhône, Rhine, and Danube waterways has given Switzerland a key position in European transit traffic. Indeed, the main artery of European trans-Alpine traffic, the St. Gotthard Pass, runs through Swiss territory.

The large-scale technical undertaking of modern highway construction was preceded by the building of the railway system, which has thousands of miles of track and includes hundreds of tunnels, among them the 12.5-mile (20-km) Simplon Tunnel and the famous winding tunnels of the St. Gotthard railway, by means of which elevation differences between valley levels are overcome. Nearly all of the track in the Swiss railway system has been electrified. The Swiss Federal Railways, which constitute more than half of the system, are operated by the federal government, though in 1999 they began to function as a limited company. The remainder of the railways, including the numerous mountain railways, are distributed among scores of private railroads partially owned by the cantons and municipalities. The Vitznau-Rigi Bahn, built in 1871 as the world’s first cogwheel railway, achieved early fame. The highest cogwheel railway in the world tunnels within the Jungfrau, reaching the Jungfraujoch at more than 11,400 feet (3,500 metres). Regular main-line trains link the main Swiss cities. The airports of Zürich and Geneva have their own rail stations that connect with the Swiss network. The railways account for about one-sixth of passenger and nearly three-fifths of freight traffic.

At the turn of the 21st century the Swiss planned the construction of new Alpine railway tunnels that would follow deeper and more level routes than the older tunnels. In 2007 the Lötschberg base tunnel, at that time the world’s longest overland tunnel, opened; the rail link was 21.5 miles (34.6 km) long. Another project was a railway tunnel running well below the existing St. Gotthard tunnels. Upon its completion in 2016, the 35-mile (57-km) Gotthard Base Tunnel could accommodate high-speed trains and significantly reduce the travel time for freight and passengers between northern and southern Europe.

Switzerland has among the highest numbers of automobiles per 1,000 inhabitants in Europe. Extensive use of cars has caused severe traffic and parking congestion. The network of main roads and motorways is packed, especially during the summer and winter tourist seasons, when hundreds of thousands of foreign automobiles pass through Switzerland daily. Three Alpine tunnels have been built: the Great Saint Bernard connects Valais with Valle d’Aosta in Italy; the more than 10-mile- (16-km-) long St. Gotthard links Göschenen and Airolo under the St. Gotthard Pass; and the San Bernardino binds the cantons of Graubünden and Ticino. The dense traffic, especially in the Alpine valleys, is responsible for serious air and noise pollution.

Since World War II, Switzerland has also maintained its own small “oceangoing fleet” of merchant ships (i.e., Swiss-owned ships that sail on the high seas). Regular service is provided on several lakes by more than 100 vessels, which include some paddle wheelers. In addition, the steamers cruising on several lakes in the summer are very popular.

Swissair, established in 1931 as the national airline, ranked among the world’s major commercial carriers until financial weakness caused it to stop flying in 2002. Much of Swissair’s extensive worldwide operations were sold off to other airlines or taken over by Crossair, a former regional unit of Swissair that was later renamed Swiss International Air Lines (generally known simply as Swiss). The main airports are in Zürich (Kloten) and Geneva (Cointrin). Bern (Belpmoos) and Lugano (Agno) have international flights and a few domestic flights, and Mulhouse in France is used by Basel.

The telecommunications sector was long dominated by Telecom PTT (renamed Swisscom in 1997), which enjoyed a legal government monopoly. However, during the late 1990s Swisscom, which is still partly government owned, lost its monopoly, and the sector was liberalized and opened to free competition. The telecommunications sector, regulated by the Swiss Federal Office of Communications and the Federal Communications Commission, expanded rapidly at the end of the 1990s, with more than 100 new companies entering the market. Among the leading companies are Sunrise and Cablecom. Internet use also grew dramatically during the 1990s and early 21st century.