On the 10th January, Prime Minister Elisabeth Borne set out the key aims of the French government’s proposed retirement and pensions reforms at a press conference. Trade unions announced their first strike over the issue minutes later, with the head of the union Force ouvrière, Frédéric Souillot, vowing that “if retirement reform is the mother of all reforms for the government, for us it will be the mother of all battles”. The changes, which the government insists are needed to keep the system afloat, have been criticized for being unnecessary as well as for placing women at a disadvantage.
What is the government trying to do and why?
In order to somewhat mollify this criticism, the government has promised to raise the minimum pension to 85% of the minimum wage from September of this year and to give concessions to those who started working at an early age. Among the less welcome announcements was that from 2027, people will need to have worked for 43 years in order to receive a full pension, rather than 42. By far the most contentious is the government’s commitment to raise the minimum retirement age from 62 to 64 years by 2030.
Although it is disputed by opponents, the government says that reform is necessary to keep the pensions system from running a deficit in the years to come. After ruling out raising taxes or cutting pensions, it has decided that raising the retirement age is the way to go. It also argues that changes are needed to overhaul a system that is outdated and overly complicated; it is currently made up of 42 different state-supported pension schemes.
These new policies may also reflect the need to deal with demographic changes and an elderly population that is steadily growing. According to the OECD dataset, pensioners today have significantly more time left after they stop working than previously; in 1970, women could expect to live for 16 more years, whereas in 2020 this rose to 23.8 years.
Why is it so controversial?
Macron’s government has been planning to put these reforms into place for some time now. The plans had to be put on hold in 2020 due to the pandemic, and now with the backdrop of a cost of living crisis, the atmosphere is even more explosive in France. The country’s biggest union, the CFDT, who chose not to take action against the reforms three years ago, is now at the forefront of the protests. Since the government’s announcement, there have been two nationwide general strikes on the 19th and 31st January, and more planned in the next week.
One criticism of the plans is that it contributes to the issue of economic insecurity for ordinary workers. For those who are already out of work in their 60s, the difficulty involved in finding a new job means that there will be an increase in people receiving welfare benefits for longer, notably disability benefits. There are also considerations of a more philosophical nature, echoing the sentiments of the former President François Mitterrand who described the retirement question as “la bataille pour le temps de vivre” (the battle for time to live). Lifespan is not the same as healthspan, and with these reforms some may have fewer healthy years left after spending decades of their lives in the workforce.
Others also dispute the government’s claim that the pension system will go into the red without intervention, with the Pensions Advisory Council, a state body, reporting in September 2022 that the pensions system produced surpluses in 2021 (€900 million) and 2022 (€3.2 billion). It did predict that the system would go into deficit over the next 25 years, but disagreed that pensions spending is out of control as the government has claimed.
Additionally, according to reports on the impact of the proposals, women will be disproportionately affected. On average, women will have to work seven months longer, compared to five months for men, mainly due to the ramifications of maternity leave. For women born in 1972, it’s an extra nine months. Women are also more likely to be in part time work and will therefore acquire fewer pension rights and be paid less, reflecting the existing issue of the gender gap in salaries and in pensions which these policy changes do little to rectify.
Will it ever happen?
The National Assembly will start debating the pensions reform bill on the 6th February. Since Macron is now serving his second term in office and does not have to worry about getting re-elected, he is quite determined to see these reforms through – especially as it was a manifesto promise.
However, most French people – over 60% – oppose the reforms, along with trade unions who will continue to carry out industrial action. They are hoping for a repeat of what took place in 1995, when the government under President Jacques Chirac had to abandon retirement reforms due to the major protests that took place.
Macron also lacks a working majority in parliament, meaning that he will need to get the conservative Les Republicains on side, which would require concessions like the ones announced by Borne on Sunday. The President could also use his constitutional power as executive to overrule the assembly, but this would cause an uproar among the opposition and the public. However, despite widespread public dissent, in 2010 President Nicolas Sarkozy was able to pass similar reforms, subsequently raising the retirement age from 60 to 62.
We might be tempted to have little sympathy for the French predicament, given that the country has the lowest retirement age of any major European economy. Here in the UK, reports suggest that it may be raised to 68 in the 2030s. However, the French have historically been no strangers to fighting for their rights. Every time the government dares to mention retirement reform, millions take to the streets. It is no use pointing to the rest of Europe as an example of why people need to work for longer, as the feeling of French exceptionalism plays a huge role in the strength of the opposition to these reforms.
So, this represents more than a simple policy change. It raises fundamental questions about French identity, the world of work and whether a rising average lifespan combined with a worrying economic situation in Europe means that working for longer is becoming a necessity. Whether they are successful or not, the French will not take these deeply unpopular changes lying down.