France's social safety net comes at considerable cost. Solidarity is expensive. According to the Ministry of Health, France's national Social Security1 system, la Sécurité sociale, which will post a deficit of 24 billion euros in 2011, each year pays out 600 billion euros in benefits that include health, pensions, family allowances and the RSA.
This represents 31% of the gross domestic product (GDP), one of the highest percentage rates among OECD member nations, whose 34 members are the richest on the planet, and almost twice as much as in the US. The safety net is significant and has helped France to weather the crisis better than many of its neighbours.
The cost, however, rises by at least 4% per year - and rose by 4.7% in 2009 because of the economic crisis - which is twice as fast as GDP.
"Among all European countries, France is the most generous in terms of social welfare payments which have increased 50% in ten years," claims IFRAP, a French think tank focussed on public sector spending and policy and which advocates decreased public spending, in its presentation of a report on welfare spending sub-titled "the uncontrollable skid". Yet, subsistence benefits are but a small part of all French Social Security system spending. About 80% of the total, or 480 billion euros, is dedicated to pension and health payments from which everybody benefits.
Ministry of Health figures show that 3.5 million people receive one of eleven means-tested benefits. Including family members, such as children and spouses, six million people receive some form of benefit. Not all are out of work. For one third of the 1.8 million homes receiving the RSA, at least one person is employed - which is the basic idea behind the RSA, providing income support to encourage finding a job.
The number of beneficiaries of subsistence benefits has not skyrocketed. As seen in the graphic below, it is mostly dependent on the economic situation. The number of RSA recipients rose by 14% between late 2007 and the end of 2010.
Graph above (in French only) shows 1999-2009 evolution of principal minimum welfare subsistence benefits (source: French ministry of Work, Employment and Health).
The unquestioned success of the RSA is also due, according to Nicolas Duvoux, to the increasingly restrictive access to unemployment benefits negotiated between trade unions and successive governments, on both the left and the right, since the 1990s. "Between 2001 and 2005, beneficiaries of the RMI [Revenue minimum d'insertion, replaced by the RSA in 2009] rose by 30 %," he said. It acts as an emergency back-up to France's social safety net when it was originally designed as a first step towards finding employment.
Contrary to conventional wisdom, subsistence benefits in France are low. While the minimum monthly working wage is set at a gross 1,365 euros per month, the base RSA payment is a monthly 467 euros for one person and 980 euros for a couple with two children. This represents barely half of the poverty level http://www.inegalites.fr/spip.php?article343&id_mot=76 for monthly incomes.
"Compared to the median income [half earn more than the median, the other half less], the RMI has lost 34 % since the beginning of the 1990s," he noted. The same relationship also holds with minimum wage, which, at least, is indexed to inflation.
According to a 2007 study of France and 11 European countries by the French Institute for Economic and Social Research (IRES), the amounts of the subsistence benefits guaranteed to poor people were "much higher" in the 11 other countries. The gap, it reported, was higher "by 30 to 40% in the United Kingdom and in Finland, by 50 to 75% in Ireland, Sweden, Belgium and Holland, by about double in Norway and in Iceland, by about double for couples and 140% for single parents in Austria, and by about 150% in Denmark".
"By making the weak more destitute, France is cultivating a noxious exception within Europe," argued Olivier Ferrand, president and founder of left-wing think tank Terra Nova and an influential member of the Socialist Party. He called for an increase in subsistence benefits, "because the quasi-majority of those under 25 are also excluded from the RSA, an exception in Europe," he said. The amount of subsistence benefits, he added, was building "a generational hierarchy in our country" by paying "709 euros as the minimum [monthly] pension, 460 euros for the RSA and zero for the young."
For many social protection experts, the significant number of subsistence benefits proves most of all that the French social model is wearing out. In this system, designed after WWII, at the dawn of 30 years of booming economic growth [called les Trente glorieuses], everybody was accorded social protection based on rights acquired through employment and family. "Social Security is not based on citizenship but on the need to protect the French worker, his wife and his family," commented sociologist Nicolas Duvoux.
With industrial decline, job insecurity, unemployment and the breakdown of traditional family structures, the system creates an increasing number of excluded people - notably among the young and single mothers - who depend on subsistence benefits. "France still deals with poverty according to the social status of the person, not according to their needs," said Duvoux.
On one hand there is a world protected by the safety net - benefits for unemployment, pension, health - regulated by trade unions and employers. In this system a job-seeking, executive-level employee benefits from the highest unemployment compensation ceiling in Europe (up to 5,700 euros per month). On the other hand, there is a world of welfare left to local communities, where subsistence benefits are very low and fail to provide for a financial and social rebound. "The social protection structures and social structures are diverging more and more. Welfare doesn't fight the causes, it just mitigates the effects," Duvoux said.
1: La Sécurité sociale (Social Security), commonly called 'la sécu', usually refers to the state system managing health care benefits. But it also includes an array of benefits including pensions and family allowances. Family allowances are available equally to all families, regardless of income, based on the number of dependent children.