One day before the presentation of the 2025 draft budget which provides for significant cuts in state spending, a collective of around thirty associations is publishing a report on the cost of poverty. According to this collective, poverty costs the State nearly 119 billion euros per year.
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The report entitled Fighting poverty: a profitable social investment was produced at the request of the Alerte collective, which brings together, among others, the Abbé Pierre foundation, Emmaüs, the Little Brothers of the Poor and Secours catholique.
According to this studyproduced by the consultancy firm Oliver Wyman, 119 billion euros are spent each year by the State to reduce poverty in France. In detail, a little more than 51 billion euros are spent in the form of social minima or other support.
But poverty also generates indirect costs in areas such as education, justice and even health. These additional costs, which also include uncollected tax revenue, amount to more than 67 billion euros per year.
State inaction would cost even more
More than nine million people in France live below the poverty line, that is to say with less than 1,216 euros per month. This situation concerns 14% of the French population.
This figure is not new. What is, on the other hand, is an economic approach to this scourge, especially since by taking things the other way around, fighting against poverty could prove profitable, believes the president of the Alerte collective, Noam Leandri: “ Each euro that you invest against poverty will generate savings elsewhere at least to the tune of one euro, if not more. This is a unique study in France because there have never been calculations of what we call cost benefit. That is to say how much it would cost me and how much it would gain me in the fight against poverty. This is more common in Canada, England and Ireland. “.
A virtuous circle for the economy
The date of publication of this report was not chosen by chance. The government is indeed seeking to restore public finances.
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But according to the president of the Alert collective, inaction could cost the State even more. He even assures that an additional investment of 8 billion euros per year could prove beneficial for the French economy: “ And this is because you are going to put these people back into employment, you are going to give them back dignity. All of this will have a positive effect on the economy. It will even increase economic growth. An increase estimated in the long term at half a point of GDP each year “.
These 8 billion euros of investments would be divided between supporting households, returning to work and even problems linked to housing.
A plan of 60 billion savings
The collective wishes to convince French parliamentarians to adopt a law which would commit the State to significantly reducing poverty, or even eradicating it, by the end of the decade. But it is not certain that the message will be heard.
For now, Michel Barnier’s government is seeking exactly the opposite. On Thursday October 10, he must present a austerity plan with the objective of finding at least 60 billion euros in savings to reduce France’s public deficit.