Cross-border workers in Ticino: Crisis or transformation? The future of cross-border work

Post on: 18.08.2025

Fringe Workers in Ticino: Crisis or Transformation? The future of cross-border work

The cover of this magazine, with its reference to customs, takes us right to the heart of the problem. The border, once a symbol of opportunity and integration, now seems to outline a new reality, one of declining numbers and questions about the future. This is not just a simple statistic, but a phenomenon that affects thousands of families, both in Italy and Switzerland, and has direct repercussions on key sectors of Ticino's economy, from healthcare to industry, from services to trade.

This article will try to shed light, analyzing the causes of this decline, the consequences for Ticino and the border crossers themselves, and possible future prospects. It will include not only numbers and statistics, but also stories, testimonials and analysis to fully understand a complex phenomenon that is reshaping the face of the Ticino labor market. Get ready for a journey into the heart of a transformation that could change forever the relationship between Ticino and its cross-border neighbors.

The Frontier Phenomenon in Ticino: An Economic Pillar

To fully understand the magnitude of the decline of cross-border commuters, it is essential to take a step back and analyze the role these workers have always played in the Ticino economy. For decades, Italian cross-border commuters have been an irreplaceable resource for the canton, filling gaps in the local labor market and contributing significantly to the growth and development of numerous sectors.

Ticino, with its dynamic economy and geographic proximity to Italy, has always attracted large numbers of workers from neighboring regions, particularly Lombardy and Piedmont. These workers, often highly qualified and with specific skills, have found employment opportunities and more advantageous wage conditions in the canton than in their home country. At the same time, companies in Ticino have benefited from a flexible and skilled labor pool, which is essential to support production and service delivery.

Sectors such as health care, manufacturing, construction, and commerce depend heavily on the border labor force. In Ticino's hospitals and clinics, many doctors, nurses and medical staff come from Italy. In factories, border workers fill key roles in production and assembly. On construction sites, their presence is crucial to ensure the completion of projects. This interdependence has created an integrated economic system, where Ticino's prosperity is closely linked to the availability and stability of the cross-border workforce.

The numbers speak for themselves: for years, the number of G permits (those issued to cross-border commuters) has grown steadily, reaching significant peaks. This positive trend has helped to keep unemployment rates low in the canton and ensure the competitiveness of businesses. Cross-border commuters are not only workers, but also consumers who contribute to the local economy, and in many cases, people who integrate into Ticino's social fabric while maintaining their residence in Italy.

Their presence has enabled Ticino to specialize in high value-added sectors, where the demand for skilled labor is high. Without border crossers, many companies would find it difficult to find the personnel they need to sustain their business, with the risk of relocation or reduced production. This is why the recent decline in the number of cross-border commuters has generated some concern, not only among those directly affected, but also among economic and political actors in the canton.

The cross-border phenomenon is therefore more than just a matter of numbers; it is a structural element of the Ticino economy, a pillar that has sustained growth and prosperity for decades. Understanding this reality is the first step in addressing current and future challenges, and in finding solutions to ensure the long-term sustainability of Ticino's labor market.

The 2020 Fiscal Agreement: The Spark of Change

If there is one event that has shaken the foundations of Ticino's border crossings, it is undoubtedly the entry into force of the new Fiscal Agreement between Switzerland and Italy in 2020. This agreement, which replaced the outdated 1974 agreement, introduced significant changes in the taxation regime for frontier workers, generating not a few concerns and, apparently, contributing to the recent decline in their numbers.

The main objective of the new agreement was to modernize tax rules and prevent double taxation, ensuring greater fairness and transparency. However, the new provisions have had a different impact depending on whether they are 'old' or 'new' border crossers. The 'old' cross-border commuters, i.e., those who worked in Switzerland before the agreement came into force, continue to benefit from a more favorable transitional regime, with almost exclusive taxation in Switzerland and a compensatory tax paid to Italy.

For the 'new' cross-border commuters, on the other hand, things have changed radically. The new regime provides for concurrent taxation, meaning that income is taxed in both Switzerland and Italy. In Switzerland, a withholding tax is levied on 80 percent of gross income, while in Italy the income is taxed at ordinary rates, with the possibility of taking advantage of an increased tax-free allowance (from 7,500 to 10,000 euros). To avoid double taxation, Italy recognizes a tax credit for taxes already paid in Switzerland.

This change, while justified by the need to adapt tax legislation to modern times, has made working in Ticino less convenient for new hires. While the tax advantage used to be a strong incentive, now the difference in taxation between the two countries has narrowed, making the frontier option less attractive for many. Simulations by several tax studies have shown that for the same income, a 'new' frontier worker faces a significantly higher overall tax burden than an 'old' frontier worker.

The agreement also introduced a definition of 'frontier worker' based on residence in a municipality within 20 kilometers of the border, and daily return. This created a clear distinction between 'in-band' and 'out-of-band' border workers, with different tax regimes. This added complexity has generated uncertainty and, in some cases, prompted workers to reconsider their work choices.

It is important to emphasize that the tax agreement is not the only factor at play, but it is certainly one of the most relevant. It has acted as a catalyst, accelerating a process of change that was perhaps already underway, but is now manifesting itself more clearly. Its implications go beyond the mere fiscal aspect, influencing individual decisions and business strategies, and reshaping the landscape of the cross-border labor market in Ticino.

The Consequences of the New Tax Regime: An In-Depth Analysis

The introduction of the new Tax Agreement has triggered a series of direct and indirect consequences that are shaping the Ticino labor market. The decline in cross-border commuters, while not drastic, is a signal that cannot be ignored and requires a thorough analysis of its implications.

First, the most obvious finding is the decrease in Ticino's attractiveness for new cross-border workers. Whereas the wage and tax differential used to be a very strong incentive, now, with competing taxation, the economic advantage has narrowed. This has led many potential new cross-border workers to reconsider working in Switzerland, perhaps opting for jobs in Italy or other regions.

Recent statistics show a steady decline in the number of G-permits issued, in contrast to the general increase in other parts of Switzerland. This suggests that the problem is specific to Ticino and related precisely to the new fiscal conditions. Some data indicate a decrease of about 1,500 positions in two years, a significant number for a canton the size of Ticino.

The consequences are also being felt on the labor supply side. Ticino companies, particularly those that rely most heavily on cross-border labor, are beginning to experience difficulties in finding qualified personnel. This can lead to higher labor costs, delays in production or service delivery, and ultimately a loss of competitiveness for businesses. Some sectors, such as healthcare and construction, are particularly exposed to this risk.

Another side effect is the increase in Italian workers choosing to move to Ticino. If frontier work becomes less convenient, the option of relocating to Switzerland may become more attractive to some. While this phenomenon may partly offset the decline in cross-border commuters, it also raises new issues related to integration, social services, and pressure on local infrastructure.

New tax impositions have also generated a sense of uncertainty and frustration among cross-border workers, both old and new. Many feel penalized by a system they perceive as less fair, and this can affect their motivation and loyalty to the company. Managing these human dynamics is crucial for Ticino companies, which must find ways to maintain high morale and productivity among their employees.

It is clear that the new tax agreement, while having noble intentions, has triggered a series of chain reactions that are redefining the landscape of cross-border work. Understanding these dynamics is the first step in developing effective strategies that can mitigate the negative effects and turn challenges into opportunities for Ticino's future.

Beyond Taxation: Other Factors Influencing the Flow

Although the new tax agreement is a determining factor in the decline of cross-border workers, it would be reductive to attribute the entire responsibility to it. There are in fact other, often less obvious but equally influential, elements that help shape the flow of cross-border workers into Ticino. Analyzing these factors gives us a more complete and multifaceted view of the phenomenon.

One of the aspects to consider is the cost of living in Ticino. Although Swiss wages are generally higher, the cost of living, particularly for rent, consumer goods and services, is significantly higher than in Italy. This can erode some of the economic advantage of higher wages, making the idea of working in Switzerland less attractive, especially for those who have families or wish to maintain a certain standard of living. The perception of lower purchasing power, despite a higher nominal wage, may discourage new entrants.

Another factor is the dynamics of the Italian labor market. Although Italy has faced periods of economic crisis, there are sectors and regions that are showing signs of recovery and offering new employment opportunities. A more dynamic Italian labor market, with rising wages and better contract conditions, could reduce the push to seek work across borders. In addition, the possibility of working close to home, avoiding long and expensive daily commutes, is a nonnegligible advantage for many workers.

The aspect of quality of life and personal well-being should not be underestimated. Daily commuting, often characterized by long lines at the border and exhausting travel times, can have a significant impact on the quality of life of border crossers. Stress, fatigue and time taken away from family and personal activities may push some to seek work solutions closer to home, even at the cost of a slightly lower salary. Finding a better work-life balance is becoming a priority for a growing number of people.

Finally, the perception of Switzerland and Ticino as a place to work may be changing. News regarding new taxation, bureaucratic difficulties, or social tensions related to border crossings can create a less inviting image. Although Ticino remains a robust economy full of opportunities, a negative perception, even if not entirely well-founded, can influence individual and collective decisions.

Understanding this complex interplay of factors is crucial to developing policies and strategies that do not just respond to the tax issue, but address the border phenomenon in its entirety, ensuring the long-term sustainability and attractiveness of the Ticino labor market.

The Future of Cross-Border Labor: Challenges and Opportunities

The decline of cross-border commuters in Ticino, although an immediate challenge, can also be seen as a catalyst for rethinking and innovating the cantonal labor market. The future of cross-border work is not written, but it will depend on Ticino's ability to adapt and seize new opportunities.

One of the main opportunities lies in valuing the local workforce. The decline in border crossers could prompt companies to invest more in training and skill development of residents, creating new employment opportunities for Ticinese and reducing dependence on outside labor. This could lead to a strengthening of the local social and economic fabric, with long-term benefits for the entire community.

Another opportunity is related to economic diversification. Ticino could focus on developing high-value-added sectors that require specialized skills and are less dependent on large volumes of labor. Sectors such as research and development, high technology, innovative finance, and consulting services could attract talent from around the world, creating an economic ecosystem that is more resilient and less vulnerable to fluctuations in border flows.

Digitalization and automation play a crucial role in this scenario. The adoption of advanced technologies can increase productivity and reduce the need for labor for repetitive tasks, allowing companies to remain competitive even with fewer employees. This does not mean eliminating jobs, but rather transforming them, creating new jobs that require digital and analytical skills.

As for challenges, the most immediate is management of the transition. The decline in border crossers cannot be managed passively, but requires active policies to mitigate the negative effects on the labor market and to support companies in the adaptation process. This includes training and retraining programs, incentives for hiring residents, and ongoing dialogue with trade associations and unions.

Another challenge is maintaining wage competitiveness. If Ticino wants to continue to attract talent, both local and international, it will have to ensure competitive wages and attractive working conditions. This means striking a balance between the economic sustainability of companies and the expectations of workers, avoiding a race to the bottom that could damage the entire cantonal economy.

Finally, it is crucial to maintain a constructive dialogue with Italy. Despite fiscal differences, cross-border collaboration remains essential to the prosperity of both regions. Finding shared solutions, promoting joint projects and exchanging best practices can help strengthen ties and turn challenges into opportunities for mutual growth.

Ticino has the chance to turn this phase of change into an opportunity to build a more resilient, innovative and sustainable labor market that can meet the challenges of the future and ensure prosperity for all its inhabitants.

Conclusion: A New Chapter for Labor in Ticino

The decline of border workers in Ticino is not just a statistic, but a sign of a profound transformation that is affecting the cantonal labor market. The 2020 tax agreement has acted as a catalyst, accelerating dynamics that may have already been in place but are now manifesting themselves more clearly. However, it would be a mistake to limit the analysis to just one factor, ignoring the role of the cost of living, opportunities in the Italian labor market, and the search for a better work-life balance.

Ticino is faced with a crucial choice: passively undergo these changes or turn them into an opportunity to build a more resilient and innovative future. Making the most of the local workforce, diversifying the economy toward high value-added sectors, and adopting advanced technologies are the keys to meeting today's challenges and ensuring the Canton's prosperity.

Constant dialogue with Italy, the search for shared solutions, and the ability to adapt will be key to maintaining Ticino's competitiveness and attractiveness as a place to work. The history of the canton is littered with examples of how its people have met challenges with pragmatism and foresight. Once again, Ticino has all the makings of a new chapter, in which cross-border work, while evolving, will continue to be a valuable resource, but in a more balanced and sustainable context.

The future is uncertain, but one thing is clear: Ticino is not giving up. With intelligence, flexibility and a good dose of innovation, the canton will be able to navigate these turbulent waters, emerging stronger and better prepared for the challenges of tomorrow. And we at SwissMag will be here to tell you about it, step by step.