#pensionreforms

‍France has been facing a great deal of political unrest due to the proposed pension reforms by President Emmanuel Macron. For weeks, millions of protesters have taken to the streets to voice their discontent with the changes. In this blog article, we will explore the protests in France and examine Macron's pension reforms.

When did this all start?

The protests in France began in December 2018, when President Emmanuel Macron proposed a series of pension reforms. The proposed changes would reform the pension system by creating a single, unified system, eliminating the 42 different pension schemes that are currently in place.  It was about to be passed as a bill in 2019 and implemented as soon as possible but due to the unexpected arrival of Corona Virus (Covid-19), it was postponed. But now that Macron has returned with his reforms it has been a source of contention for many French citizens, who have been protesting the changes for months. The protests have been widespread and have attracted a wide range of participants, from unionized workers to retirees. As the protests have continued, they have become increasingly violent, with over 4,000 people arrested since the protests began. Let me clear one thing the pension reforms are yet to be approved by the parliament in order to be implemented.

Overview of Macron's Pension Reforms

People in France went on a nationwide strike to protest the government's plans to raise the retirement age by 2 years to 64pic.twitter.com/QsftZxbrsY— Fifty Shades of Whey (@davenewworld_2) January 19, 2023 The primary goal of Macron's pension reforms is to create a unified pension system for all French citizens. The reforms would replace the current 42 different pension schemes with a single system.  This would involve the introduction of a points-based system, which would allow citizens to accumulate points that can then be used to purchase a pension. Another reform that has been the talk of the town involves an increase in the retirement age for most workers. Currently, French citizens can retire at age 62, but under the proposed reforms, the retirement age would be increased to 64.  In addition, the reforms would involve a reduction in benefits for some retirees, as well as an increase in taxes for high-income earners. Now let’s talk about the increase in the retirement age in a little detail. Le Monde reported that in a press conference, the Prime Minister of France Borne said that the minimum retirement age will gradually increase by three months every year starting this year(2023). If calculated rightly, we can find that by 2030, the retirement age will be increased to 64 from the current 62. This reform also includes that if one has to get a full pension then he/she must have worked for a minimum of 43 years according to the PM as per Le Monde. But this 43 years rule does not apply to everyone, police officers and firefighters will be the exceptions. Everyone else needs to work for 43 years and somehow if one is not able to put in 43 years of work then he/she will have to work till 67 in order to be eligible for a full pension. One good thing among the many bad decisions in the reform that no one is really talking about is for some (especially for minimum wage workers) there is an increase in pensions. For the low-earning workers who have met the 43-year working criteria, their pension has been increased to 85% which is near €1,200 at present. At the current time, more than 2 million workers fall in this specific category and most probably we will see a minimum of €100 per month rise in their pensions. Also Read: FT Tech News 04: Google lost against CCI | Samsung bans import of displays | Tesla’s Scandal | AT&T 5G in Stillwater | No more Twitter third-party apps | Google Android distribution number revealed

Why are people protesting against the pension reform? Is this not good?

People protesting against pension reforms in France Source: Google The protests in France are primarily a result of discontent with the proposed pension reforms, especially with the increase in the retirement age from 62 to 64 years.  This includes people will have to work for 43 years in order to avail full pension scheme as compared to now which is 42 years. However, there are a number of other factors that have contributed to the unrest. Chief among these is the economic policies of the Macron administration, which have been seen as favoring the wealthy over the poor. And the protests are also a result of frustration with the government's handling of the situation. Many protesters have accused the government of not listening to their concerns, and of not taking their grievances seriously.

France's history of pension reforms

This is not the first time a change is purposed in the pension system. In 1982, President Francois Mitterand changed the retirement age from 65 to 60 which was very much appreciated at that time by the people. After 13 years, President Jacques Chirac and Prime Minister Alain Juppe tried to make 40 years of work compulsory for pension in the private sector. This attempt resulted in a general strike by trade unions which stopped all the metro and train services for three weeks. At last, the government-backed off. In the year 2010, millions of people protested against the increase in the retirement age from 60 to 62 years with a mandatory minimum of 41.5 years of work by Nicolas Sarkozy. However, the reform went through. Then four years later, Francois Hollande increased the minimum number of years to be worked to get a full pension to 43 years.

How many people are participating in the protest?

But as per the BBC report, the head of the CGT union, Philippe Martinez said the number of participants is beyond 2 million which is higher than the government figure of 1.12 million. They said about 400,000 people participated from de la Republique in Paris.

Who is protesting and how are they protesting?

According to the report by Le Monde, eight main trade unions in France called for a mass strike on January 19 against the reform, and people from all over the country came to the streets for the protests. The Interior Ministry said the number of participants was more than that in 2019 when Macron first attempted to pass the reform.  Staff and workers from every industry and sector joined the nationwide march which ceased the daily services of the country damaging the economy of the country. Train services and other public transport services came to a halt. Schools were shut because 75% of teachers were on strike. Even the flights were affected. Oil refinery workers also stopped work. Electricity workers also showed their protest by reducing the electricity supply by roughly 10% of the total power. This forced the government to import electricity from other countries. Not just them, but couriers, delivery companies, truck drivers, and staff from theatres, music venues, and banks also joined the protests. The protests also ceased the main sea route for trade between Britain and the continent. The union and TotalEnergies’s officials also disclosed about the shipments being blocked at the company’s refineries. This was all done in a hope of backing off the government just like it was done in 1995 after weeks of transport strikes. Also Read: Before buying a used Tesla, pay attention to these things

What is the government saying about the pension reforms?

Macron said that the reforms are “fair and responsible” and this is very important to maintain financial stabilization in the country. According to the administration, pension reform is essential to prevent the system's collapse.  They also showed some numbers in support of their argument. According to calculations from the Labour Ministry, raising the retirement age by two years and prolonging the pay-in period would result in an extra 17.7 billion euros ($19.1 billion) in pension contributions per year, enabling the system to break even by 2027. Another reason the government gave was that the ratio of working people to retired people is very low and is in the process of decreasing rapidly. To support this, they said 50 years ago this ratio was 4 working people to one retired person. But now the ratio is 1.7 working people to one retiree. Another argument they presented was they are within the line as compared to other European countries where the retirement age is way more. For example, The retirement age in Italy and Germany is 67 years and in the UK is 66.

What did the people have to say about the pension reforms?

One banner carried by a worker in the protests wrote “It’s salaries and pensions that have to be increased not the retirement age.” One person said that increasing the age limit is only going to benefit employers and the rich, not the general public. Beverly Gahinet, a waitress who missed work because her train was canceled, said she supported the strike even if she was not participating. But not everyone was in support of the strike. Virginie Pinto, a real estate worker who had a hard time catching a train for work said “It’s always the same who are on strike…and we have to endure it.” A recent IFOP poll published showed that 68% of the general public were against the pension reform.

France’s Left Wing and Right Wing opinions

Jean-Luc Melenchon, the leader of the left-wing La France Insoumise (LFI), called the reforms a “social regression.” on Twitter. Report de l’âge de départ. Augmentation des annuités. Suppression des régimes spéciaux avantageux. La réforme #Macron #Borne c’est une grave régression sociale. #ReformeDesRetraites— Jean-Luc Mélenchon (@JLMelenchon) January 10, 2023 Marine Le Pen, leader of the far-right Rassemblement Nationale (RN), wrote on Twitter that “the French can count on all our determination to block this unjust reform.” Après avoir été élu grâce à la gauche et à la France insoumise, Emmanuel Macron va tenter désormais, avec le soutien de LR, de faire passer la retraite à 64 ans. Les Français peuvent compter sur toute notre détermination pour faire barrage à cette réforme injuste.— Marine Le Pen (@MLP_officiel) January 10, 2023

Unions’ opinion about pension reforms

Trade unions oppose the reforms claiming that there is no need to act urgently because the system is not in deficit now. One critic also revealed that the whole pension system in 2021 cost the government less than 14% of the GDP. In reply to the government's excuse of lacking the financial support to provide pensions, the unions argue that there are other numerous alternatives like taxing the extremely wealthy, raising company payments, or boosting pensioner contributions from wealthy workers. Also Read: Egypt Is Asking Its Citizen to Eat Chicken Feet According to Laurent Berger, leader of CFDT(France’s biggest union), these reforms will especially affect the most vulnerable. For instance, the new 43-year career requirement is going to hurt women the most. Many women leave employment to raise families and come back after long absences. The proposed changes would require these women to work an additional 43 years or reach the age of 67 before they could get full retirement benefits. He also said that through taxes, this issue may be resolved in a different way. Workers shouldn't be obligated to cover the deficit in the public sector.

What’s future plan for the protest?

The unions said that one strike would not be enough. Leading labor unions in the nation announced a second day of strikes on January 31 in an effort to pressure President Macron and his administration to abandon their proposed pension reform.

How effective will be the protest?

In the past, as we have discussed above, strikes had been successful but we also need to understand that was a different time. Now because of the changes in the working practices and ‘work from home’ luxury, the strike may not be as effective as it had been in the past. But it will probably be enough. The pension reforms are to be presented in the parliament next month for approval. Let’s see what happens. 

Will the bill be passed by the parliament next month?