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 on this topic More by this author
 

Blog Post

Has the European Union squandered its coronavirus vaccination opportunity?

The European Union’s purchases of frontrunner coronavirus vaccines are insufficient for the population’s near-term needs. The shortfall could have healthcare consequences and might delay economic reopening. Lessons should be learned for future pandemics.

By: J. Scott Marcus Topic: Innovation & Competition Policy Date: January 6, 2021
Read article More on this topic More by this author
 

Podcast

Podcast

The political economy of climate transition

Is the green deal a strategy for growth or simply a reallocation mechanism?

By: The Sound of Economics Topic: Energy & Climate Date: December 2, 2020
Read article Download PDF More on this topic
 

Working Paper

Understanding the European Union’s regional potential in low-carbon technologies

This research identifies existing and potential specialisation in green technologies in European Union regions, and proposes an approach to identify policies that can help to realise this potential.

By: Enrico Bergamini and Georg Zachmann Topic: Energy & Climate Date: November 26, 2020
Read article More on this topic
 

Blog Post

Targeted horizontal industrial policy: green, regional and European

Creating the conditions for the most promising low-carbon sectors to grow is the most efficient way to enable decarbonisation. As sector potential is regional and associated with regions' current strengths in related technologies, policy should aim to boost the growth potential of low-carbon technologies on a regional level.

By: Enrico Bergamini and Georg Zachmann Topic: Energy & Climate Date: November 23, 2020
Read article More on this topic More by this author
 

Opinion

2021 can be a climate breakthrough, but Biden and Europe need to talk

"2021 can be a breakthrough year for climate: the new US administration and the EU have a real opportunity, through a ‘global net zero coalition’, to remove some of the key bottlenecks in the global path to climate neutrality."

By: Simone Tagliapietra Topic: Energy & Climate Date: November 9, 2020
Read article More on this topic More by this author
 

Podcast

Podcast

A European common tax space

'One of the obvious measures Europe could do in order to fill public coffers is to make sure that everybody pays fairly what they are supposed to pay, rather than general tax increases.'

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: November 3, 2020
Read article More on this topic More by this author
 

Blog Post

The European climate law needs a strong just transition fund

To deliver on the goals of the European climate law, the European Union needs finally to get coal out of its energy mix: the EU should quicken the pace of decarbonisation whilst delivering on its goal of social inclusion.

By: Simone Tagliapietra Topic: Energy & Climate Date: October 6, 2020
Read about event More on this topic
 

Past Event

Past Event

On gains, losses, and trade-offs: the case of Border Carbon Adjustment

How will the border carbon adjustment be implemented and what will be the implications?

Speakers: Gabriel Felbermayr, André Sapir and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 5, 2020
Read about event More on this topic
 

Past Event

Past Event

The future of taxation in the EU: tax solidarity

Tadeusz Kościński, the Minister of Finance of Poland, talked about taxation policy in the EU.

Speakers: Piotr Arak, Agnès Bénassy-Quéré, Maria Teresa Fabregas Fernandez, Tadeusz Kościński and Guntram B. Wolff Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 17, 2020
Read article More on this topic More by this author
 

Opinion

Europe’s Apollo 11 will not be about the moon

The European Green Deal has an ambitious double target to “reconcile the economy with the planet” and to become Europe’s “new growth strategy”.

By: Simone Tagliapietra Topic: Energy & Climate Date: December 13, 2019
Read article More on this topic
 

Opinion

Four pillars to make or break the European Green Deal

The recipe for a successful European Green Deal is as simple as it is breath-taking: to intelligently promote deep decarbonisation by accompanying the economic and industrial transformation this necessarily implies, and by ensuring the social inclusiveness of the overall process.

By: Simone Tagliapietra, Grégory Claeys, Georg Zachmann and Bruegel Topic: Energy & Climate Date: November 14, 2019
Read article Download PDF
 

Policy Contribution

How to make the European Green Deal work

Ursula von der Leyen has proposed a European Green Deal that would make Europe climate neutral by 2050. With this Policy Contribution, the authors provide a first analysis on how to make this initiative work.

By: Grégory Claeys, Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance Date: November 5, 2019
Load more posts