Because they live in small homes, the price per square meter is higher. Because their car is older, they use more fuel. Because they don’t have a machine, they pay for laundry every week. On a daily basis and for an identical service, the poorest French households usually spend more than the middle class. If this “double penalty” effect is partially corrected by social assistance, this is not always the case, points out “The Study of the Double Penalty of Poverty in France” released Monday, October 17.
“This insidious phenomenon affects many categories of spending”, Jacques Berger, director of the association Action Tank Entreprise et Pauvreté, which carried out this study with the firm Boston Consulting Group, at the request of La Banque Postale, told AFP. To achieve this, they relied in particular on INSEE data and compared the poorest households with those in the middle class.
Gas, m2: housing where everything costs more
Smaller surfaces at a more expensive price per square meter. This phenomenon, known as the “surface effect”, mainly penalizes the poorest households. “With more limited means, poor households turn to smaller properties for housing. But the price per m² increases when the total area is reduced.” The study by the association Action Tank Entreprise et Pauvreté and the Boston Consulting Group firm focused on rental prices in several cities, from Bordeaux to Paris via Lille. This is what comes up: “Poor households have an overestimated rent of 3% on average”compared to 1.4% for an average household.
A situation which, in addition to the purely economic factor, creates uncomfortable situations. Housing occupied by poor households is more humid than others, smaller, but also noisier. Factors that “exacerbating health problems that have a direct impact on health care costs”. And above all, with a cascading effect, the poorer insulation of these homes also increases the costs of gas and electricity. This particularly affects families who heat themselves with gas. The price of subscriptions to the service and the consumer price generate a 13% difference in these expenses between poor and middle-income households.
Cars that use more petrol
Transport, and in particular cars, is also a higher expenditure item among the poorest households. Again, they suffer this double punishment, as the study tells. Between the high costs and the difficulty of obtaining credit, “poor households have complicated access to ownership of new vehicles”specifies the study, adding that they “then turn to the used market. Cars bought cheaper, but which have already driven several tens of thousands of kilometers. Result: they “consumes more fuel and requires more maintenance (higher maintenance costs).”
In relation to fuel consumption alone, the annual bill is 17% higher among the poorest households. And for vehicle maintenance, that number jumps to 121%. On the other hand, families using public transport can benefit from fares adapted to the household’s standard of living. On this expenditure factor, the double penalty is therefore mainly generated by personal cars.
From bumps to the washing machine
If you don’t have a washing machine, you have to go and wash your clothes at the laundromat. And even dry it. An expense, each time, of several euros. This is another illustration of this double punishment suffered by poor households and noted by the study. Some homes simply do not have household appliances, and the absence of a refrigerator, e.g. “leads to a change in diet towards products that last longer”. “When households are equipped, they have older equipment, which leads to overconsumption of electricity, water, gas, which affects the energy bill”, also points to the study published on Monday. While 97.5% of average households are equipped with a washing machine, only 90.3% of poor households have one at home. That “double fine on average for washing machine costs for poor households” is therefore 28% here.
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As represented by the rent or the gas bill, the extra costs that poor households suffer are found in every item of everyday expenditure, from insurance to getting a loan through the drill. Why ? The investigation identified four factors that led to these sanctions: “A volume effect” with higher rental rates; “An Effect of Exclusion” especially on the purchase of cheaper but more fuel-efficient cars; “Lack of information or bad arbitration cases” for example on insurance contracts and “a localization effect”, which mainly plays on home insurance.
A high overall additional cost that is not always offset by support
“In 2022, the annual gross double fine is estimated to amount to €1,536 or 8.7% of expenditure”summarizes the study carried out by the association Action Tank Entreprise et Pauvreté and the firm Boston Consulting Group. “Show aid makes it possible to reduce its impact to EUR 96 in double annual net penalty”, which is only 0.6% of the expenditure. globally, “Depending on their profiles and ability to benefit from this support or not, many households face a double net penalty which can reach several thousand euros per year”. Some households are not taking steps to achieve them, the study also notes.
To “fight this phenomenon of double punishment”, the study recommends that companies “develop inclusive offers that have a double penalty reduction effect”. “The public authorities also have a role to play: through rules that protect the most vulnerable customers, which make it possible to reduce the double penalty.”she adds.