- In 2020, 70% of French households will gain purchasing power, according to the French Observatory on Economic Conditions (OFCE).
- These increases will be concentrated more on the upper middle classes and unfavorable to certain modest households.
- An analysis challenged by the government.
Does the government's budgetary policy especially favor the wealthiest French people? While the 2020 budget was adopted last December, the French Observatory of Economic Conditions (OFCE) has made its calculations for this new year, drawing in passing the balance sheet of three years of fiscal measures.
It shows that in 2020, the purchasing power of French households will continue to grow by 5.1 billion euros. Average gain per household: 180 euros, in addition to the 460 euros paid last year following the movement of "yellow vests". This year, three measures are playing in particular on French wallets: the reduction in income tax, the abolition of the housing tax for 80% of households and the tax exemption of overtime, which continues to deploy its effects since it was restored in 2019. Measures that affect nearly 70% of French people, according to his calculations.
The OFCE notes, however, that the 2020 budget is "cut for the upper middle classes". For 2020, people whose income is between 2,090 and 2,230 euros will see their purchasing power increase by 610 euros, the maximum amount. "For households whose standard of living is between 1,860 euros and 2,750 euros per unit of consumption, the share of winners exceeds 90%", continues the OFCE. Last year, the sums devoted to purchasing power to respond to the “yellow vests” crisis were more distributed among the population, including towards poorer households.
30% losers, priority to the active
Result, 30% of households would lose with the measures planned for 2020. "In the end, more than half of households belonging to the 40% of the poorest should lose to the measures of the 2020 budget", we read in the study by OFCE.
This decrease is explained by two measures. Planned for this year, the reform of the APL calculation method provides that housing aid will be reassessed each quarter taking into account the income of the last twelve months. And next April, the second part of the unemployment insurance reform will change the way unemployment benefits are calculated. Two measures that will generate significant savings for the state. And which, overall, offset two other measures that had increased the disposable incomes of low-income households: the revaluation of the disabled adult allowance (AAH) to 900 euros as well as the solidarity allowance for the elderly (Aspa), to 903 euros per month.
For the OFCE, these statistics illustrate the policy pursued by Emmanuel Macron, centered on assets and consecrating the slogan of "working more to earn more" which was dear to a certain Nicolas Sarkozy. "What we see even more this year is the discriminating factor in activity," said Pierre Madec, one of the economists at the Observatory.
In total, since 2018, single unemployed people would see their standard of living reduced by 0.2%, the equivalent of 40 euros less per month. According to the economist, it is unwise to rely only on job creation to correct the standard of living of the poorest households. "Lower unemployment does not reduce inequality," he says.
More flattering statistics in Bercy
Yet it is the government's bet, which is counting on this fall in unemployment to lift more unemployed people out of poverty. To improve professional integration, it is also counting on its training reform, which is more geared towards job seekers and also promotes its support programs for people excluded from the labor market that are being launched. And which, inevitably, do not enter into the statistical models of the OFCE.
Bercy also partly challenges the statistical methods established by the Observatory. According to his own estimates, published in a report annexed to his finance bill, he figures for his part at 2.3% the rise in the standard of living of the 10% of the poorest households since the start of the five-year period. But if the figure is much more flattering, it is also because it incorporates more measures: among them, the “zero charge remainder” introduced by the “100% health” reform, the revaluation of the energy voucher or even the reduced prices in the canteens… So many reforms which, with the activity bonus, would represent a gain in purchasing power of up to 3,000 euros over a year for beneficiary households, we advance in Bercy.
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- Economy
- households
- taxes
- Poverty
- Unemployment
- Purchasing power
- APL
- Income tax