At present in France there are strikes and public protests because of the change of retirement age proposed. It would change 62 to 64. In other European countries, people are shaking their heads at the intensity of the French demonstrations. They largely work to a greater age before being eligible for pensions. In Germany, for example, the pensionable age is climbing gradually to 67 in 2024. In the majority of states 64 would be considered early. Retirement age differs in European countries and is a matter of debate across Europe, because of an aging population. It depends heavily on the minimum duration of contribution which varies from 30 years in Germany to the forthcoming 43 years in France. At present it is 41.5 years. In fact, in France it depends on the duration of contribution which will be a minimum of 43 years, thus 67 for people who spend five years in higher education, training or any other kind of break. Moreover, receiving full pension does not only depend on time spent working, since it is given after someone has reached 67 which will remain the case after the reform. Nevertheless, for instance women who were stay at home child carers will either have a pension shortfall or probably need to work beyond age 67.
However, 62 is not the lowest retirement age in Europe, it is perhaps surprisingly in mostly eastern European countries. Ukraine is age 60 for both men and women, Slovakia is 62 for both, Malta is 62 as well but rising progressively to 65 by 2027 and Belarus is 63 and 58 respectively. At the other hand of the age range, in the UK it is 66 due to be increased to 67 by 2028 and 68 by 2046 and Netherlands already 68 and linked to life expectancy, thus could be revised downward. In some countries, for instance Germany, Ireland, Portugal and Spain pensionable ages have been increased slowly to achieve the set age by the last quarter of this decade.
In France, on average, at present men retire at 60.4 and women at 60.9; almost 3.5 and 1.5 years earlier than their OECD peers. The system used is a net pension replacement rate. That is to say that the percentage of money that remains from after tax income earned on average over a working life. In France that is 74.4% which means that if somebody received €2,500 average each month, the pension is about €1,860. The net pension replacement rate is 14% above the OECD average; for instance in Germany, pensioners receive 52.9% of after tax earnings over working lives, thus about €540 less monthly than France.
The net pension replacement rate may now fall in France; not only because minimum retirement age will rise, but also more paid working years until full pension before 67. It mainly affects low income earners who mostly start working early. Someone who did not pay pension contributions until 25 because they studied will now turn 67 after just 42 years of work. To compensate the pension reform will raise minimum pension to about €1,200 for single people whereas at present, the minimum pension is €961.08. That will make it about average compared with other OECD countries.
It has become a dilemma for France. In most other European states retirement ages are between 65 and 68 with proposals for 70 becoming common. Part of the dilemma is that even without COVID, longevity has fallen a little and looks likely to fall further. Despite that, 62 is considered to be late middle age rather than old age as it was as recently as 30 years ago. Even with life expectancy slipping back a little, relative health and fitness, with the exception of overweight, has improved exponentially. People in a good state of health continue to work and often do so because they have experience and in some professions such as medicine the shortage of medical practitioners and now students to follow them has created the need for them to continue working. One must also look at the agricultural sector; retirement at all is a dream never to come true for many of them. Where I live there are two farmers in their nineties working because their pensions would not sustain them. People say they should sell up and use the money from their farm sale to supplement their pension. Firstly, smaller farms are not very valuable, the smallest are of even less value and are now almost impossible to sell. The recent PLUi legislation means development and to an extent renovation renders many valueless. Also, people forget, many of these people have known their home all of their lives and do not want to leave; sometimes their family has been there for several generations. They work to the grave in many cases, their land and houses disused and derelict thereafter.
The issues are many sided. The situation of women needs urgent attention. France is behind other states with a punitive pensions policy for women who fulfil the role of producing new generations to keep the country running but with no ‘reward’ for what they do. Part of the same is that then most become dependent on husbands’/partners’ often inadequate pensions, so couples then depend on equally inadequate benefits. Widowed and divorced women who have not put in enough years work and contributions are really left high and dry. Perhaps Macron should have started there, reformed the pension system to be inclusive. There is also the future problem that is already accumulating as people approach retirement generationally, demographically the population is growing but the nation is gradually going to be less able to pay pensions, therefore a freeze will occur at some stage that will penalise people. The cost of everything will still rise but the pension that is already inadequate will not rise correspondingly. Even raising pensionable age by two years will be little more than a plaster on a small wound. So there will have to be a contributions rise, but even that will have to be carefully managed because it could easily cause the same kind of protest as the present ones. That would all be worse, of course, if longevity turns round and people begin to live longer again then state pension allocations will certainly not suffice.
So there is a serious dilemma that both sides in this dispute need to examine carefully, then negotiate equally carefully. It goes without saying that pensionable age will sooner or later need to rise, but not the way Macron’s government set about doing it. The arguments about the owners sucking the life blood out of workers will happen anyway, ages do not matter to them. Workers work until they go, then they are of no interest to them. Capitalism has been that way since monarchic/aristocratic systems had serfs, servants and slaves who were exploited to the grave. That makes that element a weak argument. The notion of a fair social state was the objective of 19 century anarchism and early socialism that became diluted as modern social democracy and centre right politics became dominate. They have always promised, rarely delivered. The right and left claim moral high ground but should be equally distrusted. The right is especially hypocritical on that point because whilst they steal the left’s clothes, they still march in the shoes of their wealthy oligarchic supporters and funders. They steal but then wear until they fall apart then steal again. The left is stuck in a vacuum in time, not wanting change that fits in with time therefore demands they move with changes that time brings.
France is part of the contemporary capitalist world, whatever one thinks as a country it cannot remain different whilst attempting to give the European leadership it is capable of delivering. To do so the social and economic political domains must be in step with the countries France is providing an example of governance and political competence to. Retirement age, gender equality included, must change, so too the entire system of accumulation of funds for state pensions. Macron mismanaged this reform, that is very wrong and now at least a compromise needs to be negotiated without either side needing to back down. He cannot stand for the presidency again, so nothing lost personally, and there is more than enough time until the next election for this to be forgotten as new issues arise and long enough for whoever takes over not to reverse this legislation. Bringing the government down is unlikely to achieve anything significant because all political parties know the writing is on the wall unless retirement and pensions are reformed. So, where now?
I, incidentally, have a UK basic state pension that my French friends cannot believe is so little. I began to receive it at 65 but that is now 66 and has been set to rise to 68 by 2046, with 70 on the table. The UK is differently but also equally as unjust in political decisions about retirement and pensions as France, even recently suggesting people work longer and even return to work, even though there are very few jobs that would pay what those people are worth. The agenda was set around 150 years ago throughout Europe, around 100 years ago it began to function. About 50 years ago it went into decline. By that logic it is on the point of collapse about now. That needs far greater attention than what is being fought for right now.
Image by Nicolas Savignat, on Pexels