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Purchasing Power Blues In France

Revolution Sticker, Nantes
Revolution Sticker, Nantes

C’est la crise, madame!“, you can hear everywhere when visiting France.

Yes, indeed. The economic crisis is now pretty much global and France is no exception. Well, here it actually started quite a while ago and it doesn’t take an degree in economy to realize that French are getting poorer, and that life has became more difficult in the last decade.

These days, French are obsessed with their “pouvoir d’achat” (purchasing power) and the “precarité” (insecurity) of their job. Food and other necessary items seem to be getting more expensive everyday, and meanwhile, unemployment rate is high.

The Franc disappeared forever on February 17, 2002 and France adopted the Euro as the new currency. Shortly after, prices were raised quite dramatically (and are still rising!). Is the Euro responsible? Economists disagree: some say it is, some blame the shops (for example, the supermarkets) for raising prices more than they should have, some say life feels more expensive because meanwhile, salary haven’t been raised in years. But no matter who you blame, life is more expensive — crazy expensive.

Take a lot at a few items (all the price quoted are in US$):

  • In Canada, bananas sold in supermarkets are around 60 cents a kilo: in France, $2.60 (generally speaking, all the veggies I have bought so far at the market in France were at least double the price compared to Canada)
  • A movie ticket in a big theater is $8, versus $13 in France
  • The new MacBook Air is $1800 in Canada, $2520 in France
  • The new Ipod Nano is $140 in Canada, but $200 in France.
  • Gas was 65 cents when we left a week ago in Canada, it’s $1.30 in France

Basically, as a Canadian, the only things cheaper in France are cheeses, wines and some magazines. Phew. The French feel goods in stores cost more while they have less in their pockets… and it does look this way.

Meanwhile, massive lay-offs have raised the unemployment rate, which was already pretty high at 8.5% (January 2009). An incredible 19.1% of 15 to 24 years old in France are unemployed as of 2009… And it’s not like French who are working are rich. The minimum wage is the SMIC, which is now at 1037,53 € per month. Statistic varies, but it seems that the median salary for a household is about 2,000 € a month.

There is also a housing crisis, especially in the biggest cities. Rents are extremely expensive, there aren’t enough social housing (waiting list up to 14 years in Paris!) and landlords are kings: they don’t hesitate to demand a permanent job with a salary that is at least three times the rent. Students, immigrants and poor to middle-class professionals have the hardest time to find a place to live… even though over 10% of properties in Paris are vacant (mostly because owners keep them for real estate speculation). Forget about buying a property, unless you are very very rich. In 2009, in Paris, the average square meter price in the most expensive area of Paris (the 6th) was 9 800 €/m2, while the cheapest was the 19ème at 5 060 €/m2. Ouch.

As the result, some of the population is living in very bad conditions, because people either don’t find a place a rent, either can’t afford the rent. Recently, there have been several scandals: rundown buildings burned in Paris and students moved into squats because landlords didn’t want them as tenants. In 2007 The Children of Don Quixote set up hundreds of red tents for homeless people along a canal in a trendy part of Paris to put the plight of the homeless into the spotlight.

French aren’t exactly thriving. The gap between the affluent and the rest is widening (as I wrote last year visiting Paris) and no one seem to know how to solve all these issues. We are going through a crisis as well in North America, but there have been down times, and there will be up times. Now, France has been in crisis for a long time — what will it take to rebound to this situation?

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