Grandstand. Polls indicate that purchasing power has become the primary concern of the French. Among the people who express this concern, we find all types of profiles, from the manager who gives up offering ski holidays to his children to the long-term unemployed who finds it difficult to end the month, to the point of proceeding to arbitration on everyday consumer goods.
In response, many presidential candidates are embarking on a festival of electoral one-upmanship (doubling of teacher salaries for Anne Hidalgo; increase in all net salaries below 3,000 euros for Valérie Pécresse; revaluation of the minimum wage to 1,500 euros net for Yannick Jadot; allowance of 1,000 euros for students and young people and increase in pensions to a minimum of 1,400 euros for Jean-Luc Mélenchon; reduction in VAT on fuel, fuel oil and electricity and reimbursement of tolls for Marine Le Pen; scholarship of 10,000 euros to newborns in rural France for Eric Zemmour…).
The issue of purchasing power is particularly complex because it links several macroeconomic variables. Starting with inflation, which, according to Banque de France forecasts, will be 2.5% this year and 1.5% the following two years. Promising an increase in purchasing power is therefore equivalent to committing over the next three years to raising the income of the French by at least 5.5%, if only to counter the effects of inflation.
Societal issues
Tax and social contributions also play a role. Some candidates are calling for tax relief to increase household disposable income. This obscures the recent trajectory of our economy. Now that the Covid-19 crisis is receding, we are supposed to bail out the state coffers, which have largely financed the social safety net deployed to cushion the fall of the economy. To give it up could threaten our ability to absorb a future shock and, in any case, would only increase the public debt that weighs on the shoulders of the younger generations.
Salaries are also at the center of attention. The natural reflex is to want to increase them, especially the most modest ones. However, the cost of labor should not be increased. Because, according to the Observatory of inequalities, the first cause of poverty in our country is the lack of employment. Raising the minimum wage improves the daily lives of low-skilled people who are currently employed, but penalizes those who are unemployed.
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