Why the poverty rate fell a bit in 2019 but is likely to rise again in 2020

According to the first estimate of INSEE, the inequalities in standard of living were reduced last year thanks in particular to the increase in the activity premium.

This would be good news if the horizon did not darken so quickly. INSEE published statistics on Wednesday which show that poverty and inequality fell in France last year. At the end of 2019, the monetary poverty rate stood at 14.5% of the population, down 0.3 points from 2018, when it had risen sharply (0.7 points). In 2019, 210,000 people would be lifted out of poverty. The figure is gratifying to the government, which nevertheless calls for it not to ignite.

First of all, 9.1 million people still had incomes below 60% of the median standard of living, estimated at just over 1,100 euros per month in 2017. Then, the figures from INSEE are only one first estimate, two years being traditionally necessary for French statisticians to produce final data. Finally “they are completely out of step with the current crisis situation», Warns Marine Jeantet, interministerial delegate for the fight against poverty.

Redistribution

The data from INSEE are however interesting in the sense that they validate the effectiveness of the French redistributive social policy. “The increase in income inequalities before redistribution would be more than offset by the socio-fiscal system, and in particular by the increase in the amount of the individual bonus of the activity bonus.“, Note the experts from INSEE. The aid included in the government’s initial poverty reduction strategy was indeed upgraded in December 2018 in response to the “yellow vests” crisis. The eligibility criteria were also broadened, which helped to increase the number of beneficiaries by 1.3 million.

More than 4.3 million people, in particular single-parent families, now receive the activity bonus. Its average amount reached 185 euros, for a total cost to the state budget of 9 billion euros in 2019. “This is the strength of our French social system. Overall without social assistance, the poverty rate would reach 22%. This means that there is a real corrective effect. The activity bonus is an accelerator out of poverty which allows the more global increase in wages to catch up.», Explains Marine Jeantet.

At the Ministry of the Economy, it is added that in addition this photograph of INSEE only focuses on personal income, without looking at the other measures taken to reduce the expenses of the poorest households. “These statistics remain a limited vision of the effect of public policies to improve the standard of living of the poorest because, in the definition of the monetary poverty rate, the measures which intervene to reduce expenses such as the cap on bank charges, the check energy, and health policies are not taken into account», Says Bercy.

Aid that is all the more useful as incomes, and in particular those of the most modest, have fallen sharply with the health crisis. The Ministry of Solidarity confirms alarming data which shows a sharp increase in RSA requests, especially since September. In question, in addition to the non-exits of the RSA, as a consequence of the fall of the interim and short contracts, the arrival of new publics such as the self-employed and traders who cannot touch unemployment. “For the moment, it is impossible to have precise data for the year 2020. The often mentioned figure of a million additional poor people cannot be considered as statistically reliable.”Pleads the Ministry of Solidarity.


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