Saturday, March 18, 2023

Why are the French so upset over pension reforms?

The French do a very good line in strikes and protests. Whether it's the Yellow Vests or the ongoing garbage strike, they get good turn-outs and there's a pretty good chance that things will turn nasty or violent.

The latest such example is the protests in Paris and other cities against the government's audacious plans to increase the official retirement age from 62 to 64. That might not sound like a big deal to you or me, especially given that most western democracies have a retirement age of 65 upwards, but it's apparently a step too far for many on both the right and the left in France. Huge noisy crowds have taken to the street in protest, dozens of arrests have been made, and the police have resorted to tear gas to break up the crowds which have started to turn violent, with firecrackers being thrown and vehicles (and some of that accumulating garbage) set alight.

It doesn't help that Macron and Prime Minister √Člizabeth Borne (bet you didn't even know that France HAD a Prime Minister!) decided that the issue is so important and contentious that they needed to push it through without a vote in the National Assembly (where Macron lacks an outright majority), making use of the infamous Article 49:3 of the Constitution (kind of similar to the Notwithstanding Clause in Canada, and about as popular). 58% of Macron's own party supporters think that the manner of passing the bill was "unjustified" (83% of French voters as a whole).

Raising the pensionable age was one of Macron's main promises when he was first elected in 2017, although his first attempt ended in acrimonious failure when it triggered an angry response from France's strong unions (and then COVID intervened). Several previous attempts to increase the retirement age have always run into the same vehement opposition in France. Some 80% of the population is opposed to pushing back the retirement age according to polls, despite the fact that most people agree that system does need to change and is unsustainable as it stands.

Macron insists that, because of changing demographics and an ageing population profile, there is just not enough money in France's generous pension system as it is to secure its future. And he is probably right. The pension system is stacking up debts at a rate of about $13 billion annually, and the ratio of workers to pensioners is steadily going down year after year.

The people, though, while they understand this, are very reluctant to change. Partly it is just the idea of having to work 43 years instead of 42 to qualify for a full pension (you will note that this only increased by one year, not two, but it's still a move in the wrong direction as far as most French workers are concerned). But there are few other things capable of unifying the right and left wings of French politics again the centre like pension reform. What is their boeuf?

The main reason for such staunch opposition to increasing the pensionable age seems to be a general belief that the French are taxed heavily throughout their working lives, and the least the government can do in return is to preserve their right to a dignified old age. They believe, rightly or wrongly, that the current government is trying to dismantle France's "social model", their cherished welfare state, hitting the working classes particularly hard. Some argue that France's "special relationship" to work dates back to the French Revolution of the 18th century, which enshrined the principle that only free citizens are in a position to sell their capacity to work, although frankly [sic] that seems a little cerebral for what is currently going on in the streets of France. But there seems nevertheless to be a distinct general feeling that France's social progress and hard-won rights are being irrevocably eroded.

Just for good measure, some people clearly believe that pensions are being used surreptitiously by the government to reduce the general national debt, although there seems little reason to suspect that. Of course, there is always the belief that to give in now would merely open the floodgates to even more changes. Some younger people worry that by the time they reach pensionable age, it will be so high that they will just have no time to kick back and enjoy life.

It's hard for citizens of other countries to be overly sympathetic. France has long had a highly favourable pension system compared to most countries, including high payouts and a relatively low retirement age. A quick look at some other comparable countries makes this abundantly clear. Italy, Denmark, Israel and Greece retire at 67, while many others, including the UK, USA, Australia, Spain and the Netherlands, have a pensionable age of 66. Most other developed nations have 65 as their official retirement age (women are often able to retire at a younger age). And France is complaining about an increase from 62 to 64? Among developed Western countries, only Sweden and Norway also have a retirement age as low as 62, and Japan uses 63. 

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