Since January 19, immense strikes have overtaken France due to Macron’s persistent efforts to “overhaul France’s pension scheme.” According to the Economist, over 68% of the French population opposed the pension reforms announced on January 10, which would raise the national retirement age from 62 to 64 years. Men and women, respectively, spend 22.2 and 26.7 years in retirement compared to approximately 20 in other countries; according to Reuters, scaling back retirement by only two years would add “17.7 billion euros back in annual pension contributions” by 2027. At least 1.3 million protestors have since flooded the city streets, driving crises such as the longest transportation walkout in the country’s history. But what does the law implicate, and why is there so much public outcry? Are the French just strikers by nature, or is there a deeper-rooted stance?
Like many European nations, France’s retirement scheme works on the basis of a “hypothecated payroll.” Within this system, workers and employers pay a mandatory direct tax that is then used to fund retiree pensions. Their system has historically been efficient, as the Organization for Economic Co-Operation and Development has stated France has one of the lowest rates of poverty risk for pensioners in Europe. However, the ratio between the number of dependents and working citizens has risen slowly due to the declining average birth rates. In 2000, this dependency ratio was at 2.1 workers per retiree; today, it has declined to 1.7 workers per retiree, and it is projected to hit 1.3 by 2070 if no immediate action is taken. In short, this means France’s pension scheme is quickly losing value due to changing population dynamics, and hence could leave the country with a yearly deficit of “0.8% of annual economic output” if the social welfare plan continues.
The benefit attached to increasing the retirement age is the allowance for lower unemployment rates in older workers, as companies will retain older employees. Additionally, greater financial flexibility would allow the government to allocate its budget towards other areas, such as green technology and AI, which would boost long-term economic stability. Despite these long-term benefits, French unions “vow a tough fight on the streets to derail the reform.” Macron did not back down from pushing for the increase, harnessing the 49.3 law to make the change in legislation. He aims to bring the pension budget back within EU limits of 3% from 5% by the end of his term, in 2027.
Economists and politicians on the left, mostly from the NUPES party, deny the possible benefits that can be brought by the rise in the pension age, which led to even greater conflicts following Macron’s invoking of the 49.3 law. Micheal Zemmour, an economist at Paris 1 Pantheon-Sorbonne University, stated, “Our pension system is rather healthy, as previous reforms have already increased the actual pension age. The government only wants to balance its budget, also to offset the impact of tax rebates for companies. They are, bit by bit, dismantling our social model.” The French, unlike other citizens, are also touchy about changes associated with work and wages, especially as inequality is seen as a grave issue. Daniele Linhart, a sociologist researching at CNRS institute, mentions that “We have a very specific relationship with work that goes back to the French Revolution, which enshrined the fact that, when you’re able to sell your capacity to work, you’re a free citizen.” This ‘right’ of working until 62 seems to have become ingrained in society on a sociocultural level. Furthermore, some protesters are striking as they believe older workers will face age discrimination in the labor market, while others protest solely because of Macron’s reputation as the out-of-touch ‘president of the rich and elites.’
It should be noted that France is not the only nation that wants to increase its retirement age. Denmark, Italy, Netherlands, and Estonia are all countries that will have a retirement age of over 69 years old by 2060. None of the countries listed have seen protests like those in France, with Germany having recently raised its retirement age to 70. This demonstrates that France has uniquely complex social and historical relations with its pension scheme, with any adjustments spurring tension not observed in other neighboring regions.
Edited by Katherine Lake
