Opinion

Fifty shades of yellow

Who are the Yellow Vests? What are the true roots of their uprising? And what do they want? Six weeks after they started rocking French politics and a month after violence erupted on the Champs Élysées, these questions are still hotly debated in France.

By: and Date: January 10, 2019 Topic: European Macroeconomics & Governance

This opinion piece was originally published in Project Syndicate.

Project Syndicate logo

The Yellow Vests are both highly visible and highly enigmatic. Their rebellion started with the occupation of roundabouts all over the country, but it made headlines with violent demonstrations in Paris. They have kept the support of some 70% of the population and three million people signed up on the “Official Yellow Vests Counter” on Facebook, but their protests never exceeded 300,000 participants – far fewer than in past union-organised demonstrations against social reforms. They have been ubiquitous on the news channels but have no real spokespersons. When, at the peak of the crisis, Prime Minister Édouard Philippe called for a dialogue and opened his door, nobody showed up.

It is not easier to find out what they really want. The Yellow Vests have mutated twice already. The uprising was initially triggered by the announcement of additional fuel taxes, intended to encourage a reduction in carbon dioxide emissions. But after the government canceled the planned tax increase, stagnant purchasing power became the focus of the protests. Again, the government gave ground: President Emmanuel Macron announced on December 10 the repeal of tax hikes for pensioners and a top-up of in-work social benefits that will increase by 8.5% the income of people living on the minimum wage. The protesters responded dismissively and emphasised political demands, including greater scope for direct democracy, especially through popular referendums.

What motivated the initial protests is clear. Energy taxes are regressive: low- and middle-income people spend a large share of what they earn heating their homes and refueling their cars. In recent decades, many middle-class households have moved to places far from work where housing is cheaper (France has Americanised considerably in this regard). They regard carbon taxes as unfair – the rich don’t pay them on air travel, and metropolitan hipsters benefit from subsidised public transport. To make them acceptable, proceeds should either have been devoted to supporting the green transition or explicitly redistributed in the form of across-the-board tax cuts. For budgetary reasons, support measures were limited to the bottom 10% of the population. People immediately above felt neglected and squeezed. They took to the roundabouts in protest.

It is less straightforward to understand why so many lower-middle-class people feel unable to make ends meet. While median household income stagnated in the United States and Germany since the turn of the millennium, it was not the case in France. Despite the financial crisis, real household income increased by 8% from 2007 to 2017 – more than in many other European countries. Furthermore, there was significant redistribution along the income ladder. Changes in taxes and transfers took away 5% of the income of the top 10% and increased by 5% the income of the bottom 20%.

Part of the explanation is demographic: aging and the rise of single-person or single-parent households have increased the number of consumption units and decreased their individual purchasing power. Part is sociological: middle-class consumption standards – mobile phones, restaurant dinners, and beach holidays – have risen in line with the income of the well-off and have become hard for the middle class to afford. Part is geographic: since 2000, the metropolitan areas have done quite well, whereas smaller cities have struggled. House prices have risen in the former but fallen in the latter, making their owners poorer. No wonder there have been many more Yellow Vests in cities with 50,000 inhabitants than in Lyon or Toulouse.

The deeper issue is that many middle-class people feel that the social contract is broken. They once believed that rising levels of education would bring better jobs, higher income, greater prosperity, and upward social mobility for the children. But growth has become too meager to generate significant increases in income, middle-class jobs are threatened by the digital revolution, and competition for access to the best schools increasingly seems skewed to benefit those already on top. A deep-rooted French pessimism only reinforces their anxiety.

Macron had the right diagnosis. He spoke of people being relegated and deprived of opportunities. He wanted to unlock growth, foster mobility, promote equality of access. He correctly said that with public spending far higher than in other advanced countries, more taxes and social spending cannot be the answer. But he underestimated the magnitude of the change in perspective he was calling for, and he failed to respond to the demand for fairness in the design of reforms. His first moves – cutting the wealth and capital-gains taxes – earned him the sobriquet “president of the rich.” Never mind that these taxes sometimes captured all real capital income, or that, given budget constraints, the decision to front-load cutting them and backload tax cuts for the middle class was economically rational. Politically and socially, Macron was seen as serving the wealthy.

As a result, a desire for insurrection has now taken root in French society. The left and the right have shamelessly pandered to the Yellow Vests, without offering real answers. The winner may well be Marine Le Pen’s far-right National Rally (formerly the National Front). Alternatively, the Yellow Vests may end up creating a party of their own ahead of the European Parliament election in May. But it is not clear what such a party would stand for. Anecdotal evidence suggests that whereas the movement is broad-based socially and politically, activists within it are closer to the hard right and include outright anti-Semitic and anti-Muslim types.

People from across the political spectrum have shared the same anger on the roundabouts. An entire segment of French society that felt unrepresented and nearly invisible has found a colour and begun building an identity. The question now is whether the movement will find a political voice, and, if so, which one.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to [email protected].

Read article More by this author
 

Opinion

Why China should fear the EU's carbon border tax

Expect Beijing to soon start lobbying against the proposal.

By: Alicia García-Herrero Topic: Energy & Climate, Global Economics & Governance Date: July 26, 2021
Read about event More on this topic
 

Upcoming Event

Sep
2
10:15

The role of the state in providing infrastructure for decarbonisation

Bruegel Annual Meetings, Day 2 - Who should be responsible for providing crucial infrastructure for decarbonisation and how should it be managed?

Speakers: Jean-Bernard Lévy, Diederik Samsom, Simone Tagliapietra, Laurence Tubiana and Georg Zachmann Topic: Energy & Climate Location: Palais des Academies, Rue Ducale 1
Read article More on this topic More by this author
 

External Publication

A Safety Net for the Green Economy

How to protect workers hurt by the fight against climate change.

By: Simone Tagliapietra Topic: Energy & Climate Date: July 20, 2021
Read article More by this author
 

Blog Post

The European Union’s carbon border mechanism and the WTO

To avoid any backlash, the European Union should work with other World Trade Organisation members to define basic principles of carbon border adjustment mechanisms.

By: André Sapir Topic: Energy & Climate, Global Economics & Governance Date: July 19, 2021
Read article More on this topic
 

Blog Post

Making sure green household investment pays off

Policies are needed to support green fuel switching by households; support should be phased out as the carbon price rises.

By: Ben McWilliams and Georg Zachmann Topic: Energy & Climate Date: July 19, 2021
Read article More on this topic More by this author
 

Opinion

‘Fit-for-55’ package: Squaring the circle

The European Union finds itself at the centre of a three-dimensional puzzle. Burdens need to be shared between 450 million citizens, 25 million businesses and EU countries in a way that is acceptable to enough of them.

By: Georg Zachmann Topic: Energy & Climate Date: July 15, 2021
Read article More by this author
 

Blog Post

Fit for 55 marks Europe’s climate moment of truth

With Fit for 55, Europe is the global first mover in turning a long-term net-zero goal into real-world policies, marking the entry of climate policy into the daily life of all citizens and businesses.

By: Simone Tagliapietra Topic: Energy & Climate, European Macroeconomics & Governance Date: July 14, 2021
Read about event
 

Past Event

Past Event

Ensuring competitiveness of low-carbon investments

At this event, speakers will introduce the core idea of commercialisation contracts, and then discuss key design elements. This includes whether contracts should be issued at the EU or national level, how competition for contracts should be organised, and which industries should be eligible for support.

Speakers: Natalia Fabra, Peter Handley, Ben McWilliams and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance Date: July 1, 2021
Read article More on this topic More by this author
 

Opinion

Climate change and lifestyle choices

Do we need drastic changes in our lifestyles so that we can meet our climate ambitions by 2050?

By: Maria Demertzis Topic: Energy & Climate Date: June 9, 2021
Read article
 

Blog Post

For the climate, Asia-Pacific must phase out fossil-fuel subsidies

An exit from coal in the Asia-Pacific region is a global decarbonisation priority.

By: Alicia García-Herrero and Simone Tagliapietra Topic: Energy & Climate, Global Economics & Governance Date: May 31, 2021
Read article More on this topic More by this author
 

Blog Post

International tax debate moves from digital focus to global minimum

International corporate tax reform is coming closer if countries can set aside their differences and work for progress rather than the perfect deal.

By: Rebecca Christie Topic: Global Economics & Governance Date: May 27, 2021
Read article More on this topic More by this author
 

Podcast

Podcast

Towards a global corporate tax?

How will a global corporate tax affect the modern economy?

By: The Sound of Economics Topic: Global Economics & Governance Date: May 26, 2021
Load more posts