While the number of people living in poverty in France is increasing, and the standard of living for the vast majority of the population either fell or stagnated, a minority of the richest income earners have become better off, according to a study published this week by the French national institute of statistics and economic studies, INSEE.
The 167-page 2013 edition of the institute’s annual report on ‘Household income and wealth’ is drawn up from the latest collation of nationwide statistics, and which concern the year 2010. It found that the number of people living under the poverty line rose to 14.1% of the total population, including 2.7 million children, and that the households with the lowest incomes saw their standards of living fall the most amid the growing economic crisis.
Amid a constantly worsening economic environment, with the number of unemployed continuing to rise since 2010 to reach the record high, also announced this week, of 3.224 million job seekers, the grim picture painted by the study, released on Wednesday, is plainly likely to have darkened yet further in the intervening two years.
“In 2010, the standard of living of the majority of the population stagnated or fell, after having climbed slightly the previous year,” INSEE reported. “Amongst the total population, those in the most modest situation were particularly hit since the [start of the economic] crisis. On the opposite, the standard of living for the 5% of those who are the best-off saw a new rise, after stagnating in 2009.”
The median standard of living of income earners living in a household, below which is the half of those who earn the least and above which is the half which earn the most, was 19,270 euros per year, a sum equivalent to 1,610 euros per month. That represented a fall of 0.5% in current euros. But in the detail, the fall in income was worse for those situated in the bottom 30%, where it dropped by between 1.3% and 1.6%.
Meanwhile, the top 5% of wealthiest household income earners climbed by 1.3% in 2010, while the very top 1% of these saw a progression of 4.7% in 2010 after witnessing a fall of 4.3% in 2009. “The 10% most wealthy make at least 36,270 euros per year,” reports INSEE, noting that the sum represents three and a half times more than the lowest 10%, with a yearly income of 10,430 euros per year.
INSEE reported that its findings illustrated the greatest gap yet reached between rich and poor since the economic crisis began in 2008. While the social welfare system still manages to buffer, to a degree, the fall in income to the poorest households, it is far from containing it. “Before [benefits] transfer , the bottom decile of revenue by consumption unit diminished by a yearly average of 3.2% between 2008 and 2010, and by 1.2% after transfers,” reports INSEE. “For the second decile, the evolution is respectively 1.8% and 1.3%.”
The study reported that 2.7 million children were living in poverty in France in 2010. “In 2010, the level of income poverty reached 14.1%, a rise of 0.6%. The major contributory categories to the rise in poverty in 2010 are from among the inactive population: the retired (11% of the rise in people living in poverty) inactive adults excluding the retired and students (16%) and, above all, children below the age of 18 (63%),” INSEE found. Children the most exposed to poverty are those living with single parents or in families of more than three children.
Among the retired, it is the eldest who are the most vulnerable to slipping into poverty, a category which includes a large number of women living alone and whose pensions are particularly modest from having worked little or not at all. “In 2009, the level of income poverty among people aged 75 years or more reached 13%, compared to 7.7% for people aged between 65 and 74 years, and against 12.8% for people of an active [working] age,” the study notes.
The third category of those most affected by poverty are households with a debt burden. In comparison with other European Union countries, French households are relatively little indebted. INSEE reports that 46% of French households declared to having contracted at least one ongoing loan, and of these 18% had debt repayments related solely to the purchase of a property or to finance major building work. But beyond these are households who take on debt to help meet the monthly payments, who have multiple loans for property purchase and consumer credit financing. More than 18% of households with a debt burden must meet monthly credit payments of more than 30% of their monthly income. Another 12% have debts amounting to more than 80% of their total wealth, and 9% have a debt liability of more than their total wealth.
While the table of financial inequality in France is now the widest since the end of World War II, and while the effects of the economic crisis worsen, the government has made no effort to correct the situation through significantly fiscal reform. “The fiscal reform is done,” proclaimed disgraced former budget minister Jérôme Cahuzac in January. It appears that rather than take stock of the worrying statistics at hand, many would rather continue in believing in a French social ‘model’ that has become a myth.
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English version by Graham Tearse