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ECONOMY

IN NUMBERS: The ‘worrying’ scale of poverty in France in 2020

How many poor people are there in France and what does 'poor' even mean today? A new report has shed light on the changing face of France's most deprived groups.

IN NUMBERS: The 'worrying' scale of poverty in France in 2020
Volunteers of the charity 'Les Restos du Coeur' distribute food in Toulouse, southern France, on November 24th, 2020. The organisation expects 1 million beneficiaries this year for the winter season,

Published on Thursday by l'Observatoire des inégalités (Observatory for inequalities), the report Poverty in France 2020-2021 drew a sombre picture of situation in France.

“France remains one of the best social models in the world that protects its poor better than most other rich countries,” the authors wrote, before adding “that does not mean that the situation is not worrying.”

The report was published to, according to the authors, set the scene of the situation before the real impact of the Covid-19 pandemic hit.

“We will pay the damages, by an awaited and devastating progression of unemployment,” they said.

Young people were in an especially concerning situation, they said, outlining the under-30s as the biggest losers of the looming social and economic crisis.

The data in the report come from France's national research institute Insee. Some of them date back to 2018, due to a lack of newer numbers.
 

Here are some of the key numbers revealed in the report.

€885 – The poverty threshold the Observatory operates with. Most public institutions use €900. That means that anyone with a monthly income averaging less than €900 after taxes is regarded as poor.

In comparison, France’s minimum wage is €1,219 net. The Observatory chose to use €885 because it allowed them to “focus on the populations struggling the most”

REVEALED: Where in France has the lowest cost of living?

5.3 million – the number of people in France living on less than €885 per month on average in 2018. In comparison the number of people living on less than €900 per month on average was nearly the double, 9 million. 

The remaining numbers are calculated based on the Observatory's poverty threshold of €885 per month.

8.3 percent – the percentage of poor people in France, or more than 5 million people out of a population of 67 million.

According to Luis Maurin, President and Director of the Observatory, France's poverty level is low compared to many other European countries. “But it’s still 5 million people who live with very little, with incomes that are very different from the rest of society,” he said in a video published on their website (clip below).

This number is expected to rise in the months to come due to the negative impact from the Covid-19 health crisis on the economy.

0.4 percent – the rate of which poverty in France grew between 2013-2018. That means that back in 2013, 7.9 percent of France’s population was poor compared to 8.3 percent now. “It’s not an explosion, but it still represents 350,000 additional poor people,” Maurin said.

30 – half of France's poor were below 30 years old. Young people were those the most impacted by poverty at the time the statistics were collected and the report have outlined them as the biggest future losers of the economic downturn caused by Covid-19. 

12.5 percent – the percentage of all 18 to 25-year-olds  below the poverty threshold, a number that has been growing for years and is expected to grow in the future.

8.2 percent – the percentage of 18 to 25-year-olds who lived below the poverty threshold back in 2002.

5.5 million – the number of people in France who received food aid in 2017.

56 percent – the percentage of the French population who said the government is not doing enough to help the poorest groups of the population.

9 percent – the percentage of the French population who said the government is doing too much.

 

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ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

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