Rich/poor divide narrows in France
The poorest 10% of the population have seen their income rise in real terms for the first time since 2008
THE GAP between rich and poor has narrowed in France with official figures showing the wealthiest saw their incomes drop slightly, while the poorest saw theirs rise.
Statistics agency Insee’s latest standards of living survey (which relates to 2013 data) showed that the incomes of the least well-off 10% rose by 1.1% in real terms – although more pensioners had slipped under the poverty level.
This is the first increase since the start of the economic crisis in 2008 and was due to factors such as salary increases and working more hours as well as registered unemployed people having more benefit coming in. The increased benefit was due to claimants being older on average, so they had paid more social security cotisations towards their benefit and built up more entitlement.
The study showed the income of the wealthiest 10% dropped 1.8%, partly due to factors like incomes from property and investments having dropped because of lower interest rates and increased tax (eg. dividends being integrated into the ordinary tax bands and being subject to social charges).
Other factors included tax policies by the Hollande government such as putting a lower cap on savings that can be made via the income tax family quotient system (which helps larger families), and introducing a 45% income tax band.
One result of the narrower wealth gap was that the number of people deemed to be living under the poverty threshold – in 2013, having a ‘standard of living’ of €1,000 per month - dropped, from 14.3% to 14%. This meant fewer ‘very poor’ people as more were pulled nearer the threshold.
However, fractionally more pensioners (7.9% from 7.7%) than before were found to be poor.
In 2013 the median ‘standard of living’ of an adult (ie. half have more and half have less) was €1,667, which refers to all money coming in minus social charges and income and local property taxes.
For its ‘standard of living’ figures Insee uses a calculation which factors in the costs of raising children – for example to have the median amount per person a couple with two children under 14 would have money after taxes and charges of €3,500 a month.
