Liberte, Egalite, Not So Much Fraternite in Tax-Weary France

The “fraternite” part of France’s famed motto “Liberte, Egalite, Fraternite” is fraying at the edges.

Ask Guillemette Monge. The 39-year-old English teacher, who with her husband is raising seven children in one of the poorest neighborhoods of Paris on a household income of 3,400 euros ($3,814) a month, says there’s something deeply wrong with the nation’s welfare state. Monge, who works part time while also taking care of her family, says she’s forced to pull more than her weight because many in the country don’t.

“People are taking advantage because they’re encouraged to think that society owes them everything and that they don’t have to contribute,” she said, preparing tea in the cluttered kitchen at the entrance of her three-bedroom apartment.

Monge isn’t alone. Studies show a decline in some of the values on which the French welfare state was built after World War II. Social security laws in 1945 gave workers access to healthcare, pensions and family support, while a state-paid minimum-income program was established in 1988 for the unemployed who’ve run out of jobless benefits -- a plan extended in 2004 to workers with low wages.

Against a backdrop of sliding support for some programs, Prime Minister Manuel Valls on Tuesday unveiled plans aimed at encouraging people to return to work, merging two complicated systems that aid the unemployed and those with low incomes. The move came as the unemployment rate may show another rise on Thursday with jobless claims stuck at close to a record high.

Recent reports have shown that the French who work are increasingly weary of aiding the less fortunate. The share of people who want the state to do more for the poor fell last year below 50 percent for the first time on record.

Wealth Distribution

It slid to 45 percent from over 70 percent in 1995, according to an October report by Paris-based research institute Credoc. Fifty-three percent said the minimum-income plan gives people an incentive not to work, up from 48 percent in 2008.

“We have to try to understand why a growing number of our citizens doubt the legitimacy of the wealth redistribution system,” Valls said. “We’re faced with the challenge of saving our welfare model.”

Poverty in France has worsened every year since 2008 with people’s perception of their living conditions at the lowest in over 30 years. One out of seven French households is under the poverty threshold because of a large number of working poor, Valls said. He unveiled a plan to ensure that in a country with a minimum wage of about 1,136 euros a month, a single person is guaranteed a monthly income of 1,400 euros and a working couple with two children 2,900 euros starting next year.

That comes as most French people are less confident the state can and should help those who are worse off, Credoc says.

Empty Pockets

President Francois Hollande is seeking to trim government spending and rein in one of the world’s most extensive welfare states to bring the budget deficit within the European Union’s limit of 3 percent of gross domestic product.

“French people feel that the state’s pockets are empty and that it can’t be as generous anymore,” Credoc said in a separate report in September. “At the same time, growing distrust of the government and disappointment with its policies to fight inequality and unemployment encourage them to think they should fend for themselves.”

Between 2000 and 2013, the portion of people who said France dedicates too big a share of its revenue to welfare has surged to 21 percent from 14 percent, according to a report published a year ago by the social affairs ministry.

More than half of French people now consider that eligibility criteria for family or jobless benefits should be tightened, it said.

Tax Weary

“Solidarity is clearly being questioned but it’s hard to tell how radical the change is,” said Nicolas Fremeaux, an economist at Cergy-Pontoise University, near Paris. “On the one hand, a growing sense of unfairness seems to have made an individualistic system attractive, on the other, most French people today have no idea what it would cost them to pay for education or healthcare out of pocket, or if childcare wasn’t tax-funded, because that’s the only system they’ve ever known.”

Still, there’s no appetite for paying for such services through higher taxes.

“The tax burden feels heavier as people’s income increases more slowly and it’ll get worse as spending cuts start to hurt,” said Antoine Bozio, director of the Institute of Public Policies in Paris. “A budget overhaul is urgently needed to improve transparency and efficiency as well as redefine the services that people want and the corresponding contributions.”

Taxes represent 45 percent of France’s GDP, the second-highest in the world behind only Denmark among the 34-member Organization for Economic Cooperation and Development, and compares with 25 percent in the U.S. and 33 percent in the U.K.

‘Killing Machine’

More than 70 percent of France’s annual budget of about 1.2 trillion euros is spent on welfare benefits such as pensions, health care, culture, education -- from pre-school to university -- as well as subsidized housing and a variety of tax-funded services from swimming pools to school canteens. France has the highest level of spending on social benefits in the world, at 31 percent of GDP, an OECD report published in November shows.

The Movement for the Freedom of Welfare, or MLPS, which is fighting for the right for private insurance instead of the tax-funded social security, says it attracts hundreds of self-employed professionals at meetings.

Another body, called Let’s Save Our Companies, expects at least 10,000 people at a demonstration on March 9 to protest against the social security system for the self-employed.

“It’s a killing machine,” the group’s president, Pascal Geay in an interview on Wednesday. “We’re forced to pay huge sums with no guarantee of any decent support in return in terms of pensions or in case of illness.”

Wasted Money

About two thirds of the French would choose a tax cut and fewer services, up from 44 percent in 2010, according to a poll published in January by the Institut Paul Delouvrier, which measures satisfaction with public services. Over half of the respondents cited cutting social benefits as a priority.

In a survey by pollster Opinionway for crowd-funding firm Finsquare in November, 84 percent of respondents said tax money is wasted. Only 14 percent said receipts are being fairly redistributed.

Over the last four years, French taxes have increased by 74 billion euros, which the national statistics office Insee says has eaten into households’ average income.

The tax increases didn’t prevent the deficit from widening last year for the first time in five years. Hollande’s government plans 50 billion euros of spending cuts, starting with 21 billion euros this year, including lower benefits for middle-income families.

National Front

While austerity policies in Greece and Spain have driven demands for higher government spending, the French have turned to the anti-immigration National Front, which aims to lighten the tax burden.

FN, as it is known, garnered 29 percent of voting intentions, leading opposition party UMP, which had 25 percent, while the ruling Socialists trailed with 22 percent, according to a poll published by Le Journal du Dimanche on Feb. 15.

Resentment has grown against homeless people and members of gypsy communities. In the southern cities of Perpignan and Angouleme, local politicians took out or fenced off public benches to prevent squatting. In Champlan, in the north, the town in December opposed the burial of a gypsy infant.

Monge says raising a family in a poor neighborhood has changed her attitude toward those she used to view as vulnerable and deserving help.

‘Not Fair’

On paper, her home’s location is attractive, a short walk from the picturesque Montmartre hill, a historical landmark dominated by the Sacre-Coeur church, and Gare du Nord station, where trains depart for countries including the U.K.

In reality, the neighborhood known as “La Goutte d’Or,” or a drop of gold, has one of the highest rates of immigrants, poverty and drug dealing at the heart of the French capital.

For two years, Monge has been writing to the police, courts, local authorities and even Hollande to complain about a makeshift market in front of her building. Residents are forced to walk on the road, dodging cars and trucks, and pick their way through garbage left each day, she said.

“It’s not fair and it’s not right,” she said, displaying a folder bulging with the complaints. “Where are we going if people don’t pay tax, don’t respect the rules?”

Monge points out her father and husband took up whatever work they could find to make ends meet.

Feel Guilty

She recalls her father selling cakes door-to-door after emerging from a serious illness because her mother, a nurse, didn’t earn enough to be the sole bread-winner. Her husband immigrated to Paris to escape mass unemployment in rural Spain, starting out as a vampire in the haunted house at Euro Disney and now works for the city as a tree doctor.

Tired of worrying about her children’s safety, Monge has put her apartment up for sale. With city plans to establish a shooting room for drug users nearby she has had no offers. She has been discouraged by her neighbors’ resignation.

“Many people seemed to feel guilty that they have a job and a roof over their heads, or that they’re white, but why should we?” she said.

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