Poverty and inequality are on the rise in France, according to INSEE

LPoverty in France is growing since Covid and inequalities are increasing. This is the observation made by the latest INSEE report on the subject, published this Tuesday at the end of the day. All in all, the French came out of the pandemic poorer than when they entered it. But in detail, above all, the standard of living of the poorest has fallen, while the richest have improved.

In 2021, the share of poor French increased by 0.9%, to 14.5% of the population. More than nine million people lived, therefore, two years ago below the monetary poverty threshold, set at 60% of the median income, or 1,158 euros per month for a single person, half of them had less than 924 euros per month.

If this impoverishment also applies to employed people – of whom 7.4% lived below the poverty line – the unemployed (35.1%) and large families (25.6%), as well as women, are mainly affected.

They also represent 57.5% of the people admitted by the Secours catholique last year. A rate much higher than their share of the population of France, prompting the association to speak of the “feminization” of poverty in its last annual report.

  • Single mothers and children on the front line

Many single mothers specifically seek help from Secours catholique. This year, they represented a quarter of a million users that the association supported. A situation that is partly explained by non-payment of alimony: almost a third of solvent fathers still do not pay it.

However, the trend of impoverishment is wider and is caused, according to INSEE, by the end of the aid introduced during the Covid pandemic and the non-renewal of the increase in the return to school allowance, which largely affected the most vulnerable families.

The APL reform also stands out: according to INSEE, the overall level of aid paid has fallen since its entry into force in January 2021. The result: almost a quarter (20.6%) of children living in France in 2021 were in poverty .

Inflation is finally playing its part: reaching 1.6% in 2021 compared to 0.5% in 2020, it has contributed to lower living standards as social benefits, adjusted to the previous year’s inflation rate, rise more slowly than prices.

Conversely, if poverty increased, the income of the richest benefited from the resumption of activity after the Covid-imposed shutdown. Little affected by the end of state aid, the living standards of the richest French rose in 2021, further widening the gap with the poorest.

For example, driven by rising wages and income from wealth, the living standards of the richest 5% of residents increased by 4.5% between 2020 and 2021, while the poorest 20% of French people lost 2% of their purchasing power. Taking inflation into account, the standard of living of the poorest French has only fallen in 2021, while that of the richest has improved.

“The resumption of activity in 2021 is accompanied by growth in income from work and dividends received by households, more pronounced in the richest households whose living standards are increasing. On the other hand, the non-renewal of the exceptional solidarity aid paid in 2020, linked to the health crisis, burdened the living standards of the most modest households, which fell in 2021”, writes INSEE.

If retirees continue to be in a slightly better position than the active population, the trend begins to reverse. Due to inflation, their median standard of living fell by 1.1% in 2021, a year during which 10.9% lived below the poverty line.

A trend seen since 2017: while the average pension had risen every year until then, driven by new full-time retirees, the curve has inverted. New retirees now earn slightly less than all retirees.

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