Marseille—Emmanuel Macron has waited a long time for this.
An unrealized promise of his initial presidential campaign, pension reform represents a core piece of his pledge to transform the French welfare model. After the pandemic forced him to toss out an attempt at overhauling the system in early 2020, the president vowed during his successful bid for reelection last year to finish the job.
Macron’s pre-Covid proposal sought to unify France’s disparate regimes into a single “universal” system. But the latest reform is driven by a much cruder idea: French people need to work longer. The bill would lift retirement age eligibility for most from 62 to 64. It would also accelerate the phase-in of the new minimum time of work required to obtain a full pension, applying that 43-year-threshold in 2027 instead of 2035. In practice, it would push the effective retirement age for many beyond 64.
Like so many other reforms in the Macron era, the outcome will likely be decided in the streets. United in opposition, France’s major unions are gearing up for mass strikes starting on January 19. The movement that follows suit will loom over the president’s ultra-thin majority in the National Assembly as it takes up the legislation.
An Unpopular Swipe at a Cherished System
Even the bill’s supporters acknowledge that the reform is unpopular. According to a poll taken after the government unveiled the long-awaited legislation last week, nearly 70 percent of respondents said they’re opposed. The French remain deeply attached to their retirement system—in reality, a series of different regimes overseen by the state, into which they pay handsome amounts of contributions over the course of their careers. (These range from the general private-sector system to a small one covering the Paris Opera.)
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Many on the left share the conviction that decent retirement is a hard-won right, a pillar of a welfare state designed to deliver basic services and guarantee precious time away from the demands of the capitalist marketplace. The state pension system itself was the brainchild of a Communist labor minister, enshrined into law after World War II alongside enhanced welfare benefits. When the Socialist Party finally captured the French presidency in 1981, President François Mitterrand lowered the retirement age from 65 to 60. And when Nicolas Sarkozy braved mass strikes to hike that level to age 62 in 2010, it was considered a major step backward. Last week, La France Insoumise MP François Ruffin told me he views Macron’s plan as the latest salvo in an offensive against social progress.
But the battle isn’t just about abstract principles. While the government spends a lot of money on pensions—around 14 percent of its GDP—France also has one of the most effective retirement systems in the world. On average, take-home pension benefits make up 74 percent of workers’ pre-retirement net earnings, a rate much higher than the OECD average and the equivalent level in the United States. France can also point to the second-lowest level of elderly poverty in the OECD, besting Germany and Sweden.
The status quo doesn’t always protect everyone, but it helps deliver a decent standard of living to millions after their professional lives. For workers at the tail end of their careers—especially those scraping by in labor-intensive industries that get harder with age—retirement can provide a bulwark against the risks of health problems and material deprivation. Consider a health aide earning around minimum wage in her late 50s: In the US, she might be gearing up for another decade of work, with meager Social Security benefits and maybe some personal savings on the distant horizon. In France, she’d be on the cusp of retirement, with a state-backed pension on its way.
Macron’s message to workers like these is simple: You’re going to have to hold on a little longer.
As everyone from moderate labor leaders to welfare economists has stressed, the proposed hike in the eligibility age penalizes the least-well-off: those who’ve started their careers on the early side—typically low-wage workers who forgo university studies—and manual laborers who are already more likely than others to encounter health problems in the late stages of their careers. Even Antoine Bozio, the economist who inspired Macron’s first pension reform plan—the abandoned project to forge a single system—has criticized this second version for its lack of fairness: “Raising retirement age eligibility will affect those in the bottom income distribution much more than those at the top,” Bozio told Mediapart.
As it stands, manual laborers already live shorter lives than white-collar workers and managers. (For men, the gap is about six years.) If Macron’s plan goes through, they’ll be spending even less of those precious sunset years away from work.
No Alternative?
A common refrain from the government is that a hike in the retirement age is needed to save the system. The line of attack has been repeated by the editorial boards of the Anglo-American business press, never shy to applaud Macron for taking on the country’s pesky labor unions.
It’s true that the French pension system is projected to face a shortfall in the coming years. The government’s pension advisory council anticipates a deficit to take hold as early as next year, reaching around 0.4 percent of annual GDP per year before stabilizing sometime between the mid-2030s and late 2050s. That deficit may well be a cause for concern. But it does not indicate a system on the brink of collapse.
If the goal is to genuinely tackle the deficit, pension experts have put forth a multitude of options that don’t involve a hike in the eligibility age. Legislators could impose modest hike in payroll taxes. They could scrap a loophole exempting employers from pension contributions on a tranche of high salaries. They could toss out a recent tax cut on businesses. They might even consider a slight benefit cut for the most fortunate pensioners. Or they could reflect on ways to support older employees who want to stay in the workforce. The pension question contains degrees of complexity belied by Macron’s all-or-nothing fixation on the eligibility age.
And yet there is a compelling case to be made that the reforms are less about saving pensions and more about freeing up cash to pay for other measures, which include tax cuts. (The government’s recent move to scrap a production tax on business known as the CVAE leaves a particularly large dent in public revenue.) In the first page of its latest “stability report” to the European Commission—an annual requirement for EU member states—the French government vowed to keep public spending in check thanks to “structural reforms, notably retirement reform.” It made a similar pledge in the most recent annual budget presented before the National Assembly. If one wanted to scrounge the French budget for spare cash, pensions would be a good place to start.
There is a strong ideological component at play, too. Pensions have long been a thorn in the side of French conservatives, with one’s appetite for reform viewed as a test of political courage. As Macron’s former prime minister Edouard Philippe told AFP earlier this month, “The English have Ireland. The Americans have guns. We have pensions.”
In the end, Macron is gambling on the likelihood that unions won’t be able to muster enough street opposition. With inflation and the energy crisis occupying public concerns, a sense of resignation may allow his government to get away with an unpopular reform, or so the calculation goes.
Those hopes will be put to the test Thursday, with France’s major unions jointly calling for a day of nationwide strikes and demonstrations. That group includes the militant General Confederation of Labor, but also the General Democratic Confederation of Labor, France’s largest union confederation, which typically steers away from such strike calls. Not since Sarkozy’s pension reform in 2010 have the eight major confederations called for national strikes together. Another day of action is likely to follow. In any case, student unions and La France Insoumise have called for an additional march on Saturday.
Social movements can be notoriously hard to predict in France. Turnout numbers in the coming days will be scrutinized, with battles over the differing tallies from protest organizers and the police all but guaranteed. As is often the case, the key question is how much unions and left-wing parties can mobilize beyond their core base of sympathizers. Will their strike calls provide a spark for rank-and-file worker grievances to take more organized form or even for a larger social movement to emerge, perhaps one tapping into frustrations over the rising cost of living?
The next few weeks may well prove Macron’s analysis correct. But as Philippe candidly acknowledged in a 2021 speech, even the highest reaches of the French state are prone to misjudge the scope and appeal of protest movements. “We never know what the last straw’s going to be,” Philippe told a group of business school students. He then listed various successful reforms, before conceding that popular rage over the fuel-tax hike and the birth of the Yellow Vests caught the government off-guard.
“We can predict,” he said, “but we never know.”
