According to the French Strategy, pensioners lost an average of 200 euros per month over ten years.
This is a note that can create a bombshell effect. France Strategy, a think tank affiliated with Matignon, has put a scalpel into the evolution of the purchasing power of more than a million people born between 1941 and 1941 as the government refines the presentation of its pension reform project, scheduled for January 10. 1980 in the last ten years.
As a result, France’s standard of living increased by just 5.4% during this period, or an average of 0.6% per year.“2010 is characterized by decades a slowdown in the growth of the standard of living compared to the previous decade, » Gautier Maigne, director of the Department of Society and Social Policy, said at a press briefing on Thursday, January 5. But this dynamic hides strong differences by age category.
An average reduction of 200 euros per month among pensioners
The big losers are retirees and people close to retirement. These are the only two categories that recorded an average decrease in living standards of €200 per month (-7%) between 2010 and 2019. Thus, their income fell from 2412 euros to 2238 euros.
On the other hand, other age groups generally experienced an increase in purchasing power. Not surprisingly, the big winners are the 40-49 and 50-54 age groups. This category is suitable for employees who sometimes experience career advancement.
Ten-year evolution of the standard of living of individuals grouped by age group
Significant decline in returns on assets since the 2008 crisis
The “great recession” of 2008 hit the European economy hard. After the crisis subprime In the United States, the shock wave spread to the Old Continent, causing a recession in southern countries and France.
After this financial crisis, the sovereign debt crisis left deep scars on European economies. These various shocks have hit the purchasing power of retirees. “Oldest people evolved more slowly than middle-aged people in the 2010s” Gautier Maigne added.
Another key factor the researchers posit is the decline in returns on assets for the wealthiest retirees. “There is a wealth-income effect for the retired generation. This generation has seen their incomes decline due to declining returns to capital. The drop in interest rates has weighed on the incomes of these households. added Clément Dherbécourt, project manager of French Strategy.
The originality of this observation is that the decline in the purchasing power of retirees is mainly explained by the decline in income from household savings, not by taxation, redistributive effects or the reduction of pensions. “Regardless of income level, observed declines in wealth returns led to an average 6.5% decline in living standards across the cohort” underline the authors of the note. They add that tax increases in 2010-2014 were offset by decreases in subsequent years.
30-39-year-olds also suffer from a decline in purchasing power
It’s not just retirees who have paid a heavy price in the post-crisis years. Young workers between the ages of 30 and 39 saw their purchasing power increase by 7% between 2010 and 2019, an average of just 0.7% per year. Thus, the average standard of living increased from 2,076 euros to 2,222 euros in this decade. Unsurprisingly, “The arrival of children will affect the standard of living of 30-39-year-olds”Clément Dherbécourt says.
Economists in their research explain this weak dynamic with income from activity. It should be noted that economic growth was particularly slow during most of the 2010-2019 decade. On the other hand, the decrease in the profitability of the capital hardly affected the purchasing power of this category. Because they have little wealth, they are logically less affected than the wealthiest retirees.
