Editorial of the “World”. The economic recovery is here. Just as much as the decline in unemployment or the increase in GDP, an indicator attests it for those who still doubted it: the debate on purchasing power is back, after having been put on hold at the height of the pandemic. With the presidential election approaching, the declared candidates, or in the process of being, are already positioning themselves on this theme. On the left, Anne Hidalgo claims the right for each of “To receive fair remuneration”, while Jean-Luc Mélenchon wants “Immediately increase the monthly minimum wage to 1,400 euros net”, or 14% more than today. On the right, Valérie Pécresse speaks of a drop in compulsory levies on work, promising a 10% increase in purchasing power, “But without this costing companies more”.
The problem of purchasing power in France existed before the pandemic crisis. He did not disappear with her. Initiatives have indeed been taken during the five-year term. But, despite the cuts in income taxes, the disappearance of the housing tax, the activity bonus, the reduction in employee contributions, the revaluations in the sectors of health, education and aid to the person, despite the state’s support for the economy, which allowed the purchasing power of the French to progress during the crisis, for a good number of employees, the account is still not there, of as much as inflation threatens.
There are many reasons. As in the OECD as a whole, the evolution of value-added sharing over the past two decades has benefited capital more than labor. Then, the share of constrained spending (real estate, Internet subscriptions, insurance, energy, etc.) jumped dramatically, reducing the income actually available as a shame. Finally, remember that the generosity of our social model, based almost exclusively on solidarity, has a cost that is found on everyone’s payroll.
Zero-sum game
Asking the question of purchasing power in France is quite legitimate, provided the ins and outs are given. Reducing social contributions, as proposed by the right, amounts to depriving social accounts of precious revenue when they show historic deficits. Therefore, we have to choose: reduce social benefits or compensate for the shortfall by increasing the VAT or the CSG. But this zero-sum game doesn’t fool anyone.
Raising wages, as claimed by the left, requires compromises with business leaders who promise to be complicated in view of the weakness of the unions. Of course, a new balance of power in favor of employees can be established in sectors that are unable to recruit. But the recipe cannot be generalized. The massive increase in the minimum wage is no longer a lasting solution because it would harm the hiring of the least qualified. As for the State, its room for maneuver has never been so reduced, with the explosion of debt and deficit due to the crisis.
Increasing purchasing power implies imagining the overhaul of the financing of our social model, not just letting the prospect of an increase in social benefits, wages or a reduction in taxation. The debate is too serious to be content with incantations.