Rise in gas and petrol prices, soaring commodity prices… the specter of inflation is resurfacing in Europe and particularly in France, fueling concerns about the maintenance of the purchasing power of the French. The question could very quickly become an issue of the presidential campaign for 2022, notes Pierre Madec, economist at the French Observatory of Economic Conjunctures (OFCE).
According to INSEE, the purchasing power of households would have increased by 0.4% in 2020, and it would even increase by 1.8% in 2021. The French are the winners of the crisis?
Indeed, household income has been largely supported by the policy of “whatever the cost”, through the financing of short-time working, the solidarity fund or targeted aid. So much so that today the purchasing power of households is rather on a dynamic trajectory. If we stick to INSEE data, we would therefore tend to think that all is well, but macroeconomic indicators have their limits.
In reality, households have suffered from the crisis in a very heterogeneous way. Unlike what has happened in other countries, the government did not choose to write everyone a check. When we look in detail, the situations are therefore very different, between those who have been unemployed, those who have received aid, the self-employed who have been more or less supported … Certain fractions of the population say today that things are not going so well and, for them, the question of purchasing power will indeed arise.
How to deal with the issue?
From a political point of view, it is very complicated. The difficulty is to identify which situations are the most problematic. We saw it clearly during the crisis: the government put in place a whole arsenal of measures, but we nevertheless noticed that there were holes in the racket. In fact, the question, taken more broadly – and which will perhaps be at the center of the presidential debate – is to improve overall social protection systems, in particular for certain more fragile categories such as young people. For example, it may be necessary to wonder whether we are putting the discussions around the “universal working income” back on the table, which were put aside for almost two years.
Should we increase the salaries of the poorest?
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