By Liz Alderman
PARIS — President Emmanuel Macron of France is facing the toughest crisis of his leadership after three weeks of violent protestsacross the country. “Yellow Vest” demonstrators have demanded that the government give financial relief to large parts of the population that are struggling to make ends meet.
Prime Minister Edouard Philippe sought to calm the furor on Tuesday by suspending a planned fuel tax increase for six months, reversing a policy that had set off the revolt.
But it’s not apparent that this single concession can clear the streets.
The Yellow Vest movement — whose followers wear or display high-visibility vests used in emergencies — has morphed into a collective outcry over deeper problems that have plagued France for years: declining living standards and eroding purchasing power. Both of which have worsened in the aftermath of Europe’s long-running financial crisis.
Here are some numbers that explain why France has erupted.
€1,700: Median monthly take-home pay
France, like other Western countries, has seen a deep gap grow between its richest and poorest citizens. The top 20 percent of the population earns nearly five times as much as the bottom 20 percent.
France’s richest 1 percent represent over 20 percent of the economy’s wealth. Yet the median monthly income is about 1,700 euros, or $1,930, meaning that half of French workers are paid less than that.
Many of the Yellow Vest demonstrators are protesting how difficult it is to pay rent, feed their families and simply scrape by as living costs — most notably fuel prices — keep rising while their household incomes barely budge.
It wasn’t always this way.
Living standards and wages rose in France after World War II during a 30-year growth stretch known as “Les Trente Glorieuses.” Pay gains for low- and middle-income earners continued through the early 1980s, thanks to labor union collective bargaining agreements.
But those dynamics unraveled as successive left-leaning French governments sought to improve competitiveness in part by compressing wage gains, according to the French economist Thomas Piketty. Average incomes for low- and middle-income earners stagnated, growing by around 1 percent a year or less.
The rich got richer, as top earners saw income gains of around 3 percent a year. Increasingly generous executive pay for very high earners has helped tip the scale.
French workers are still better off than those in Italy, where real wage growth has been negative since 2016. Real wages there fell 1.1 percent between the fourth quarters of 2016 and 2017, according to the Organization for Economic Cooperation and Development.
But while real hourly wages are rising in France, that growth has come slowly, even more so since the end of the eurozone debt crisis in 2012.
1.8 percent: Economic growth
France is the third biggest economy in Europe after Britain and Germany, and the world’s sixth largest before adjusting for inflation. Visitors to Paris can come away with the impression that the glitz of the French capital means the rest of the nation is just as well off.
But French economic growth was stagnant for nearly a decade during Europe’s long-running debt crisis and had only recently begun to improve.
The quality of the recovery has been uneven. Large numbers of permanent jobs were wiped out, especially in rural and former industrial areas. And many of the new jobs being created are precarious temporary contracts.
Growth is key to improving working conditions for those who have been protesting. But while a nascent economic recovery before Mr. Macron took office has helped generate jobs, growth has cooled to a 1.8 percent annual pace, in tandem with a slowdown in the rest of the eurozone.
Above 9 percent: Unemployment
The growth slowdown makes it harder to resolve another French problem: the large numbers of people out of work.
Unemployment in France has been stuck between 9 percent and 11 percent since 2009, when the debt crisis hit Europe. Joblessness has drifted back down to 9.1 percent today from 10.1 percent when Mr. Macron was elected. But it is still more than double the level in Germany.
Mr. Macron promised to lower unemployment to 7 percent by the next presidential election in 2022, and has acknowledged that a failure to do so could fan the flames of populism.
But to achieve that, the economy would have to grow by at least 1.7 percent in each of the next four years, which is by no means certain, according to the French Economic Observatory, an independent research group.
Mr. Macron has tried to re-energize the French economy.
This year, he demanded an aggressive overhaul of the nation’s rigid labor code to help employers set the rules on hiring and firing, and bypass longstanding restraints that discourage employers from hiring new workers. The provisions also limit unions’ ability to delay change, by allowing individual agreements to be negotiated at the company or industry level between bosses and workers.
Those reforms have helped draw companies like Facebook and Google to France. But they could take years to show results for average workers. And the reforms have angered workers who see a plot to strip them of hard-won labor rights in favor of big business.
€3.2 billion: Tax cut for the rich
As part of his plan to stimulate the economy, Mr. Macron cut taxes for France’s wealthiest taxpayers during his first year in office, including by creating a flat tax for capital income.
But the centerpiece of the tax package, and the one that has drawn the most ire from protesters, did away with a wealth tax that applied to many assets of France’s richest households, replacing it with one that applied only to their real estate holdings.
That lowered by €3.2 billion, or $3.6 billion, the amount of revenue the state received this year.
There has been little evidence of a stimulus effect. Instead, Mr. Macron has earned a reputation for favoring the rich — one of the biggest sources of anger among the Yellow Vest protesters.
While high earners have enjoyed tax breaks under Mr. Macron’s fiscal plan, purchasing power fell last year for the bottom 5 percent of households. The majority in the middle, about 70 percent, saw no gain or pain either way, according to the French Economic Observatory.
Even before the Yellow Vests took to the streets, Mr. Macron realized that support was withering, and his government tried to pivot toward those left behind in the previous round of tax cuts.
His 2019 budget, unveiled in October, will grant breaks next year worth €6 billion for middle- and low-income earners. It also includes an €18.8 billion reduction in payroll and other business taxes to encourage hiring and investment.
€715 billion: The social safety net
While polls show that the Yellow Vests have the backing of three-quarters of the population, questions have swirled about how much pain the protesters are really experiencing — or how much of the outpouring can be chalked up to a centuries-old culture of demonstrating against change.
France protects citizens with one of the most generous social safety nets in the world, with over one-third of its economic output spent on welfare protection, more than any other country in Europe.
In 2016, France spent around €715 billion on health care, family benefits and unemployment, among other support.
To get that help, French workers pay some of the highest taxes in Europe.
While taxes are greatest on upper-income earners, France also has a value added tax of 20 percent on most goods and services. Together with the fuel tax that Mr. Macron’s government just vowed to suppress temporarily, such measures tend to hurt the poor, while the wealthy barely notice them.
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