Purchasing Power Blues In France

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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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French woman in English Canada. World citizen, new mom, traveler, translator, writer and photographer. Looking for comrades to start a new revolution.

15 Comments

  1. I had assumed that because of the social services provided by the government in France — health care, education, etc., that people would be less vulnerable to the economy. Clearly is you have no where to live and not enough to buy food for your family you are hard pressed to get by.

    In the United States we have record unemployment and a lot of people are struggling too. What bothers me a lot is the inequity between workers and corporate management. When times are good maybe we don’t care that corporate execs are over compensated. But when people are living on food stamps the gap becomes a chasm. A lot of people are looking for some real changes and Mr Obama can’t do it by himself.

  2. Haha! I have to laugh at Sidney’s comment: “…but the French always like to complain!”

    I quite agree, but as long as it’s done in a funny way I can accept it. I know some people can be completely dogmatic about it.

  3. Ah Thanks for this Zhu. It shows Europe is as affected as US, but its not been written all over in the media.

    Asia is also the same but I guess its not as much as in US or Europe. I hope so atleast.

  4. Perhaps Canada and the US have managed to keep the price low through outsourcing. Outsourcing has its own issues, though.

    France is certainly not alone. In Singapore, where my sister lives, GST has been revised from 5% to 7% last year. The government, which is obsessed with elitism, encourages wealthy people to immigrate. Such move pushed up the property price. (Of course, the bubble is burst now.)

    In many countries, middle class is shrinking, and we are having M-shaped society.

  5. Unfortunately I do not have answer to your question. I’m not an economist nor politician. But I sure hope we can bounce back real soon.

    How much is VAT is France?

  6. Salut Zhu,
    Yes, that” empty pocket” feeling is something that we know here… crisis now, but starting with the Euro. I do honestly feel that when the Euro came, prices went up. And it’s not getting any better.
    When we go back to North America, we take advantage of a lot of buys. That has been going back a long time.I regret these price differences, yet love so much here. Yes, the food is one of them.

    You just have to give and take when living abroad.

    Bonnne continuation vers Nantes !!
    Bises 🙂

  7. Since the previous last two countries is America & Vietnam I can definitely see the comparison when it comes to the pricing. Then again, it might not be fair so between USA & Singapore food is definitely cheaper in USA.

  8. Hey Zhu!

    Oh, here it is the same everywhere “É a crise!”…I think the same is being said all around the world *nodding*.

    In Portugal, when the Euro “invaded” us, the prices doubled! Can you believe it? Yet the salaries didn’t…
    I don’t think it is the Euro’s fault, I believe it was the commercial and governmental institutions’ fault.

    Ok, France is quite expensive…the prices in Portugal have decreased recently, because we are going through a deflation.
    Well, the Macbook and ipod cannot be compared to Canada because those products are American, right? American products pay a higher tax in Europe, than in Canada (in which perhaps pays no tax, the same way products from the EU do not pay taxes inside the EU member countries).

    Oh, the Portuguese wished the SMIC were €1,037.53….ours is €500 (a disgrace).

    “what will it take to rebound to this situation?” – change the way it makes business. France is very conservative and an adept of protectionism (this must end). It must adapt to modern economy, and regulate its banks (the SG scandal was ridiculous – and that is why when Monsieur le Président Sarkozy demanded, in the G20 meeting, for international regulations for this and that, I laughed like crazy).

    But worry not, France s’en va sortir!! Toute l’Europe s’en va sortir!!
    Great article, cherie :D!

    Cheers

    Cheers

  9. @Guillermo – I hope so. I hate to see my family and friends struggling…

    @Bill Miller – I came to realize that France does not have so many social services anymore… The health system for example — which is very complex –is good, but not always free. Even I was surprised because I had always heard it was the best.

    @Sidney – I understand your comment. France is rich compared to a lot of countries. Situation is much worse in parts of South America, Asia etc. Of course, there are different “levels” of poverty — I would not compare French poverty with life in Bolivia’s countryside. That said, I’m seeing my home country getting poorer and people’s life getting harder.

    @Gail at Large – I don’t complain as much as I used to! 😆 It is a French trademark… same as Canadians complaing about the weather.

    @CM-Chap – We mostly hear about the US crisis, much less about how other countries are affected.

    @Khengsiong – Interesting… I do not know much about the situation in South East Asia… but I assume every country feels the crisis as well.

    @Bluefish – It’s about 17% I think. But it’s included in the price, unlike Canada.

    @barbara – You are right. It’s difficult to compare prices anyway. Ultimately, it depends where you feel good! I like seeing expats from all over the world enjoying life in France, like I enjoy my life in Canada.

    @shionge – Food is very cheap in North America… I think it’s the cheaper among western countries!

    @Max Coutinho – I can’t believe the SMIC is so low in Portugal – surely, life must be expensive as well with the euro! I can’t see people surviving with 500 euro, even if real estate might be a bit cheaper. Wow!

  10. Max Coutinho on

    Zhu,

    It is unbelievable, isn’t it? But it is true!
    The companies accuse the working force of not being productive enough in order to increase the salaries; the workers say that for that amount of money why bust their butts working? It is shocking!

    Oh no, real estate is not cheap here! In France rents are cheaper than here. It is quite a paradox.

    Conclusion: most people receive subsidies from the government to help them pay the bills.

  11. at least in france there is “free” healthcare and other social benefits.
    when life is precarite, one can always share a banana and some veggies with someone else. i assume one can still find romance in paris even if one has to sneak into the movies without paying.

  12. This is true – however on big purchase items, we have a tax of at least 12% on that, so when you look at something at $1800 if that is what it costs, then you are looking at least $2000 for the product. I’m not saying it is equal but there are taxes worked into the price there already…

    Most people in Europe get paid a reasonable salary to work in a department store etc, you wouldn’t get that in north america…

    But it is something we all have to be so aware of!

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