When the UK raised the age of retirement and heightened the national insurance contribution criteria to be eligible for a state pension, there were complaints from women who were particularly affected by the changes but very little wider protest.
It has not been as easy for the French government plan to raise the retirement age from 62 to 64. Trade unions have held nationwide strikes that have brought France to standstills, hoping that strikes and accompanying demonstrations will bring about a similar outcome as in 1995 when then-president Jacques Chirac abandoned his pension change proposals. Millions of workers have been involved to disrupt industry and transport across France. However, unlike the previous five strikes, trade unions declared the 7th March strike, ‘grèves reconductibles’, meaning workers will vote at the end of each strike day on whether to continue industrial action. With no fixed end date, unions hope to damage the economy so severely that it defeats the government.
Although the country’s current retirement age is one of the lowest in the European Union, the existing rules already require most people to work past the age of 64 in order to qualify for the full pension. By raising the retirement age by two years most workers would need to work 43 years, rather than 42, to be eligible for a full pension.
The government claims postponing the retirement age by two years and extending the pay-in period would yield an additional €17.7 billion in annual pension contributions, allowing the budget to break even by 2027 and safeguarding what they say would be a failing system. But not all economists agree.
In September 2022, a report by the French Pensions Advisory Council found the pensions system actually produced surpluses in 2021 (€900 million) and 2022 (€3.2 billion), although it did predict the system would run a deficit on average over the next quarter of a century. According to its calculations, ‘between 2023 and 2027, the pension system’s finances will deteriorate’, reaching a deficit of between 0.3 and 0.4 percent of GDP, or just over €10 billion a year, until 2032. But the Council predicted an eventual balance beginning in the mid-2030s.
A deficit of €10-12 billion per year is not necessarily excessive for a pension system whose total annual expenditure amounts to around €340 billion. ‘The results of this report do not support the claim that pensions spending is out of control,’ the Council wrote. Pension spending as a proportion of GDP is expected to remain stable, at around 14 percent of GDP, before rising to up to 14.7 percent by 2032.
Pensions expert Michaël Zemmour said, ‘It has become a form of political discourse to exaggerate and dramatise the deficit issue, to claim the system urgently needs to be reformed, when in fact the deficit is rather moderate’.
He explained, ‘It’s not about saving the pension system, it’s about financing tax cuts for businesses,’ highlighting France’s intention to finance tax cuts with structural reforms to bring the national deficit under 3 percent by 2027, a requirement of EU member states (bit.ly/3kUXHlx).
Government attempts to appeal to younger generations on the grounds that it is they who carry the burden of supporting the elderly have not been successful. Despite retirement being a distant prospect, France’s younger workers have been active in the protests.
One student said, ‘We live in a productivity-obsessed society that is preoccupied with economic growth and which has been destroying our planet for decades. Now we’re being asked to work for two more years so we can produce even more.’ Another explained, ‘We should be able to live longer and in better health without working ourselves to death. Besides, if they’re talking about retiring at 64 now, what will it be when I’m 60? Will I have to work until I’m 70 or 75? ’ (bit.ly/3JofydM).
In the United States, where the retirement age for Social Security is already transitioning to 67, a Republican Party committee has called for the retirement age to increase by three years so that people born on or after 1978 will have to wait until the age of 70 for a full pension (bit.ly/3mFHwcg).
In Germany, the Federation of German Employers’ Associations in the Metal and Electrical Engineering Industries has also suggested raising its retirement age to 70. However, Johannes Geyer of the German Institute for Economic Research believes ‘Raising the retirement age puts a lot of pressure on the working population. People with low life expectancy, and those with health problems, will suffer more; a relevant part of the population dies before reaching retirement age.’ He seeks an alternative solution. ‘We need migration. It’s essential that we have enough people coming from abroad to work in Germany’ (bit.ly/3mCFM3r).
Working people must reject this capitalist imposition – ‘live longer, work longer’. We should have a society where we can appreciate the added years of our lives and not be made to work until we drop.
ALJO
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