NewsWorldIn 2019, the standard of living of the French...

In 2019, the standard of living of the French saw its biggest increase since 2001 – BFM Business

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According to an INSEE report, the median standard of living was 1,837 euros per month in 2019, an increase of 2.6% compared to the previous year in constant euros.

While the government defends its record in terms of purchasing power, this INSEE report will not fail to be highlighted by the majority. According to the Insee Première report of October 2021, the median standard of living of the French experienced a substantial increase in 2019, the last year before the health crisis.

“Strongest increase since 2001”

In 2019, in mainland France, the median standard of living * per person was 22,040 euros per year, an increase of 2.6% in constant euros (corrected for inflation) compared to 2018. In other words, a single person in two had more than 1,837 euros per month against 1,771 euros in 2018 to live, and possibly save. And for a couple with two children under 14, this median was 3,857 euros per month, or 138 euros more than in 2018.

According to the Institute, this is the strongest increase in living standards since the early 2000s. In 2018, the change was almost zero (+ 0.3%).

“This increase is the strongest since 2001 and it is much higher than the average recorded for the last twenty years (+ 0.8% on average per year)”, specifies INSEE.

As a reminder, the increase in purchasing power has been weak since the 2008 crisis. Between 2013 and 2018, it was only 0.4% per year, while over the period 1996-2008, it was on average 1.4% per year according to INSEE.

An increase in living standards which can be explained firstly by an increase in wages and by reforms of the socio-fiscal system (elimination of employee unemployment insurance contributions on wages, tax and social exemptions for overtime, exceptional bonus purchasing power). Before redistribution, INSEE notes that the increase in living standards was 1.8% in 2019.

The “post-yellow vests” measures

Middle-class households have benefited from the revaluation of the activity bonus and, to a lesser extent, from the tax and social exemption of hours
as well as the continuation of the reduction of the housing tax. The amount of the activity bonus has increased. It affected 18% of households against 13% in 2018. INSEE also highlights the contribution of the “exceptional purchasing power bonus” paid by some employers.

In 2019, around 40% of employees benefited from an exemption from their overtime hours and 22% from the exceptional purchasing power bonus, specifies the Institute. The annual salary of people benefiting from these measures is on average increased by 1,150 euros for exempt overtime and by 410 euros for the exceptional purchasing power bonus. “

It is the less well-off households that have benefited the most from this increase. In 2019, this increase was greater for the 50% of the least well-off households
(between + 2.6% and + 3.4%).

These households benefit from the improvement in the economic situation on the labor market and the fall in unemployment, as well as from the dynamism of wages, analyzes INSEE. Their standard of living is further enhanced by the strong revaluation of the activity premium, the effect being however a little more limited for households under the first decile. “

For the most modest French (standard of living below 11,660 euros per year), the increase in standard of living was 2.8%. Mainly due to falling unemployment and rising wages. Before redistribution, the gain thus reached 4.6%. If the increase is lower for the most modest after redistribution, it is because the revaluation of certain social benefits (housing allowances, family benefits) was lower than inflation.

“The drop in housing allowances linked to the reform of the 2018 solidarity rent reduction also had an impact: it simultaneously lowered housing allowances for households in the social rental stock (taken into account in the standard of living) and reduced their rent of an equivalent amount “, specifies INSEE.

Taking into account the drop in rents, the increase in living standards is thus 3.2% for the 10% of the poorest households and no longer 2.8%.

Conversely, households with the highest incomes benefited less from the year 2019. The standard of living of the wealthiest 10% (from 39,930 euros per year) increased by only 1% between 2018 and 2019 .

“This slower growth comes after an atypical year 2018 where the income from wealth of the wealthiest had significantly increased, with the sharp rise in dividends in a context where the reform of capital taxation encouraged companies to distribute dividends rather than to capitalize on them, ”however specifies INSEE.

Inequalities in standard of living thus fell sharply in 2019, after increasing sharply in 2018. The Gini index which measures these inequalities in standard of living was 0.289 in 2019, as in 2017 and after 0.298 in 2018.

In 2019, 9.2 million people live below the income poverty line, or 1102 euros per month. The poverty rate stands at 14.6% and decreases by 0.2 points over one year.

* The standard of living is equal to the disposable income of the household divided by the number of consumption units (each adult counting as 1 and children for 0.3 or 0.5 depending on whether they are over or under 14 years old) . Disposable income is the amount a household has available to consume and save. It includes the salary or, for the self-employed, income, any unemployment benefits, pensions and pensions, income from assets and other social benefits received. From this addition, we subtract direct taxes (income tax, housing tax, CSG and CRDS as well as social contributions on income from property.

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