Why the French are protesting against pension reform

The demonstration on a recent Thursday afternoon could be a bad omen for President Emmanuel Macron. About 80,000 people gathered in Paris, between one and two million across France — more than at any other French protest in over a decade. They were there to show their opposition to the government’s pension reform, which even some economists disapprove of.

Protesters in the street leading from Place de la Republique to Place de la Bastille in northeastern Paris were holding up placards saying things like “I love my pension” and “This [reform] is not inevitable, it does not create social justice.”

35-year-old Frank Lopes Costa was one of the demonstrators.

“This is not only about pensions. The plans are putting a question mark over the very heart of our social system,” the primary school teacher told DW. “Times are already incredibly difficult, also because of rising prices. The reform comes on top of all that. Our society is becoming increasingly market-orientated, but we don’t want that,” he added.

Polls show that 70% of the French are opposed to the plans — and counting.

France’s bad demographics

But the government says the reform is necessary to save France’s pay-as-you-go system, where workers pay for pensions through their levies. “The ratio of workers to pensioners is going down and that is threatening our system. With this project, we’ll guarantee the future of our retirement model,” Prime Minister Elisabeth Borne said before the Senate in mid-January.

As opposed to certain other European countries, France’s pension system does not include any capital-funded elements. It comprises general branches for private employees and public servants and 27 so-called special pension schemes for example for ballet dancers or police officers that benefit from an earlier retirement.

The government now aims to increase the system’s overall minimum retirement age from currently 62 to 64 years until 2030. And from 2027 on, people need to work for 43 years — instead of currently 42 — to receive a full-rate pension.

Macron’s plans would maintain an earlier retirement for people who have started working very young and preserve certain special pension schemes with others, such as the ones for metro drivers in Paris, to be cut. The government also aims to increase the minimum pension by about €100 ($108) to €1,200 per month.

Money is of course Macron’s main argument. The reform is based on a report by a government-mandated expert committee that predicts pension payments will amount to up to 14.7% of GDP in 2032 instead of currently 13.8%.

Economists undecided about fallout

Some economists, including Jean-Marc Daniel, therefore think the pension age needs to be pushed up. “In 1950, four workers were financing one pensioner. In 2000, that ratio was two to one. In 2040, no more than 1.3 workers will finance one pension. The financial weight on them will become unbearable,” the professor emeritus for economics at Paris-based ESCP Business School told DW.

Daniel noted that the system is only officially not running a deficit, because the government is subsidizing public workers’ pensions.

Philippe Crevel, economist and head of Paris-based think tank Cercle de l’Epargne, agrees. “This reform is necessary because we need to get more people into the workforce to foster economic growth,” he explained to DW. “The employment rate amongst older people is relatively low in France compared to other countries, increasing the minimum pension would push up that rate.”

Social model under threat

And yet, other French economists object. Paradoxically, they are basing their arguments on the very same report the government has put forward to justify its reform.

That document states that “according to political preferences, it’s perfectly legitimate to implement a pension reform or not,” adding that the report’s results “do not confirm spending will spiral out of control.”

Michael Zemmour, an economist at Sorbonne University Paris 1, hence believes the government has ulterior motives. “Our pension system is rather healthy, as previous reforms have already increased the actual pension age,” he told DW. “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.”

He thinks it’s worth putting public money into a system that reduces inequalities.

“The expert commission does predict a deficit in the coming years, but we could finance that by increasing employers’ and employees’ charges, which many people would prefer to the reform,” Zemmour said.

Henri Sterdyniak, economist at left-wing Paris-based think tank Observatoire Français des Conjonctures Economiques, adds that the plans would hit the working class particularly hard. “People with a university degree have to work beyond the minimum retirement age in any case to get a full pension, as they started work later,” he told DW. “But those who are less qualified and entered the job market rather early will be impacted, as they would have already accumulated the number of working years needed for a full pension by the age of 62.”

A special relationship with work

Given the disagreement among economists, it’s not surprising that support for the reform is sluggish, says Daniele Linhart, a sociologist specializing in work relations and director emeritus at public research institution CNRS.

“The experts in the media drown us in examples and analyses that are difficult to understand,” she told DW. “People have realized their opinions depend on the ideology they believe in. It really comes down to the question of what kind of society we want to live in — one ruled through market-orientated rationality or one which is focused on reducing inequalities.”

What’s more, the sociologist says the French are particularly touchy when it comes to anything related to work — for historical reasons. “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 workforce, you’re a free citizen,” she stated.

“Work has become a symbol, also in the context of class warfare, and people have fought for the right to retire at a certain age,” Linhart added.

And they are seemingly not willing to give up easily on that right. The next days of demonstrations and strikes are already scheduled.

Edited by: Uwe Hessler

Nathalie Loiseau on Conflict Zone

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Article source: https://www.dw.com/en/why-the-french-are-protesting-against-pension-reform/a-64513082?maca=en-rss-en-bus-2091-xml-atom