Since the start of the school year, the executive has liked to highlight the purchasing power gains of the French under the five-year term of Emmanuel Macron. The President of the Republic did not fail to recall this during his interview on TF1, Wednesday, December 15. “Purchasing power has increased on average under this five-year period more than under the previous two, despite the crisis. The richest and the poorest alike. (…) But those who have had the purchasing power who have increased the most , they are the middle classes “, thus affirmed the Head of State.
Before him, Bruno Le Maire had already held the same speech throughout the month of September. “The purchasing power of the French has been maintained”, hammered the Minister of the Economy on the radio and television sets. Better, it would even be on the rise. “In 2021, it increased by more than 2%”, he said on September 13, on the set of LCI. On September 22, its Deputy Minister in charge of Public Accounts, Olivier Dussopt, went further. “Household purchasing power gains will be at a level higher than the average of the last ten years”, he announced on the occasion of the presentation of the finance bill (PLF) for 2022.
The government thus affirms that the French have seen their standard of living improve since 2017, despite the Covid-19 pandemic, thanks, among other things, to measures such as the abolition of the housing tax, the exemption from certain social contributions on overtime or the energy check. This increase would be such that at the end of the five-year term of Emmanuel Macron, the gains of the French should even be higher than those recorded under the presidencies of Nicolas Sarkozy (2007-2012) and François Hollande (2012-2017). Franceinfo took out the calculator to check whether the executive is telling the truth or “fake”.
All these assertions are based on the work of the General Directorate of the Treasury, published Monday, October 4 in the Economic, Social and Financial Report (RESF) for 2022. (PDF). A document communicated every year as an annex to the PLF. Its particularity this year lies in its chapter entitled “Redistributive balance 2017-2022”, on pages 42 to 52. This is a study which assesses the impact on the portfolio of the French of the fiscal and social measures taken since the start of the five-year term.
According to these calculations, “the purchasing power (…) of households has increased continuously since 2017”, writes the General Directorate of the Treasury. Bercy services rely, to advance this observation, on the indicator of “purchasing power of gross disposable household income”. This economic term corresponds to the addition of the money received in the context of work and income from property (rents, dividends) as well as social benefits (pensions, allowances), less social contributions and direct taxes, all in relation to inflation, that is to say to the evolution of prices.
This indicator, also used by the National Institute of Statistics and Economic Studies (Insee) to measure the evolution of household purchasing power, has indeed shown continuous growth since 2017, as shown in the graph below, which is based on data published by INSEE.
Taking into account the government’s forecasts for 2021 (+ 2.2%) and 2022 (+ 1%), the increase recorded under the five-year term of Emmanuel Macron should indeed be twice as large as under his predecessors. The Treasury expects an increase of 8% in 2022 compared to 2017, while purchasing power had increased by more than 3.5% under the presidency of Nicolas Sarkozy and more than 4% during the mandate of François Hollande .
But is this comparison relevant for all that? So, can the economic situation under Nicolas Sarkozy’s five-year term, marked by the 2008 financial crisis, be placed on the same level as the presidencies of his two successors at the Elysee Palace? “Indeed, comparisons over time are always difficult because the environment is constantly evolving, and often independently of the choices of economic policy”, acknowledges economist Xavier Jaravel to franceinfo. But the 2021 winner of the prize for the best young economist in France judges that the Covid-19 crisis was no less severe than that of 2008, quite the contrary.
“It seems difficult to say that the economic environment was more favorable during this five-year period, the crisis of 2020-2021 being much stronger than that of 2007-2008.”
Xavier Jaravel, economistto franceinfo
Economists are, however, more divided on the extent of the population affected by this increase in purchasing power. According to the Treasury report, all income categories have benefited from government measures taken since 2017. Above all, again according to the same report, it is the lowest incomes who are the greatest beneficiaries, with an increase of 4 % of purchasing power for the poorest 10% of households. Bercy services explain this higher gain by measures such as the revaluation of the allowance for disabled adults, the extension of the youth guarantee or the energy check, which now benefits nearly 6 million households.
However, other studies conducted by economists earlier in the five-year term have shown the opposite effect of executive politics. Thus, an assessment of the consequences of the measures implemented since 2018, published in February 2020 by the Public Policy Institute (IPP), revealed a beneficial effect for the purchasing power of a majority of households but not for the poorest 1%, who live on less than 789 euros per month. An update of this work, published in mid-November 2021, concludes that there has been a beneficial effect (+ 1.6%) for all French households, with the exception of the poorest 5%, who have seen their standard of living drop by 0.5%. This difference in conclusion can be explained by the breakdown of the population: the PPI breaks down the French into 100 income categories, a much finer grid than that of the government, which classifies households into only ten categories.
But the division of the population is not the only explanation. The French Observatory of Economic Conjunctures (OFCE) also published, in February 2020, an assessment of the impact of the measures taken since the start of Emmanuel Macron’s five-year term. This work showed that government policy was unfavorable to the poorest 5% of French people. According to the OFCE, the standard of living of the most modest households should be brought down, unlike the rest of the French, due to the socio-fiscal policy initiated since 2017.
Asked by franceinfo on the contradiction between this work of 2020 and the figures published this week by the government, Pierre Madec, one of the authors of the OFCE study, highlights the differences in the evaluation of the measures. “We do not assess the reform of housing assistance or the increase in tobacco taxation, for example, in the same way”, explains the economist.
“The government considers that this increase in tobacco taxes has led to a sharp drop in consumption. This leads it to reduce the impact of this tax measure which affects more severely the most modest categories.”
Pierre Madec, economistto franceinfo
Finally, the government’s figures on purchasing power are also contradicted by the opinion of the French themselves. In a survey conducted by OpinionWay-Square for The echoes and Classic Radio, published on September 20, 56% of those questioned said they felt that their purchasing power had rather decreased under the five-year term of Emmanuel Macron. For François Carlier, general delegate of the CLCV consumer association, this difference illustrates the limits of statistics. “When INSEE or the administration speak of the French, they actually speak of an average. But most French people are not like the average French”, he says.
“There is something artificial about all of these averages. They correspond to dots on income distribution charts. But they do not correspond to people.”, recognizes economist Xavier Jaravel. “It should be understood that these indicators hide great disparities”, adds this researcher, whose work has shown that 20% of French people actually experience double inflation than that displayed by INSEE.