5 - Interpersonal Inequality

Summary

As we saw in Chapter 4, the greatest inequalities after the Second World War were between those living and working across a range of sectors and activities in Paris and those working in the rest of the country, in what Gravier referred to as the French “desert”. Even in that desert there were distinctions within the agricultural sector between the large arable farms in the north and the Île-de-France, which employed paid labour, and the small family-run, mixed farms elsewhere. There were also distinctions between those working in industry, mainly in the north and northeast of the country, and those working in the service sector, spread across France. It was the rapid growth of the economy and the movement of millions of people out of low-productivity jobs into higher productivity ones that led to a rise in living standards and a reduction of the gap between Paris and the rest of the country. It was when growth rates slowed down after the mid-1970s and the tens of thousands made redundant in the traditional industries could not find alternative employment in the expanding service sector that inequality began to rise and mass unemployment became a structural problem. Although it was never as high as in the neighbouring countries of Italy and Spain, unemployment became a persistent problem for France, peaking at 10.8 per cent of the active labour force (2.8 million) in 1997, and reaching a new high of over 3 million people in 2015. On the other hand, income inequality levels, although rising from the 1980s onwards, were also lower than in Spain and Italy, and were much lower than in the United States and the United Kingdom. In this chapter we shall analyse the record of the French government in addressing the main forms of interpersonal inequality over the period since the “30 glorious years” came to an end.

INCOME INEQUALITY

During the early 1980s, when many OECD countries were following the example of the United States and cutting taxes and public spending, the French Socialist government did the opposite. It increased income taxes on middle and high earners while introducing an entirely new tax on wealth to help fund its nationalization and expansionist public spending programme.