Reports from the Economic Front

a blog by Marty Hart-Landsberg

The Battle In France

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What is going on in France?  The media has basically presented the story as one of typical out-of-control French strike activity caused by the unwillingness of French workers to accept a modest increase in the retirement age from 60 to 62.   What are they complaining about, you might ask, since here in the US, the retirement age has been pushed back from 65 to 67 with political pressures mounting to push it back still further–perhaps to 70.  

Well, the struggle by French workers involves a lot more than the media explains.  This is not surprising, since labor struggles in most countries get little coverage and what there is normally distorts rather than clarifies the issues. So, what is at stake in France?

Diana Johnstone, in an article published in Counterpunch offers the following explanation (and I recommend reading the entire article):

 The retirement issue [in France] is far more complex than “the age of retirement”. The legal age of retirement means the age at which one may retire. But the pension depends on the number of years worked, or to be more precise, on the number of cotisations (payments) into the joint pension scheme. On the grounds of “saving the system from bankruptcy”, the government is gradually raising the number of years of cotisations from 40 to 43 years, with indications that this will be stretched out further in the future.

As education is prolonged, and employment begins later, to get a full pension most people will have to work until 65 or 67. A “full pension” comes to about 40 per cent of wages at the time of retirement.

But even so, that may not be possible. Full time jobs are harder and harder to get, and employers do not necessarily want to retain older employees. Or the enterprise goes out of business and the 58-year old employee finds himself permanently out of work. It is becoming harder and harder to work full-time in a salaried job for over 40 years, however much one may want to. Thus in practice, the Sarkozy-Woerth reform simply means reducing pensions. That, in fact, is what the European Union has recommended to all member states as an economy measure, intended, as with most current reforms, to reduce social costs in the name of “competitivity” – meaning competition to attract investment capital.

Less qualified workers, who instead of pursuing studies may have entered the work force young, say at age eighteen, will have subscribed to the scheme for forty-two years at age 60 if indeed they manage to be employed all that time. Statistics show that their life expectancy is relatively short, so they need to leave early in order to enjoy any retirement at all.

The French system is based on solidarity between generations, in that the cotisations of today’s workers go to pay today’s retired people’s pensions. The government has subtly tried to pit one generation against another, by claiming that it is necessary to protect the future of today’s youth, who are paying for the “baby boom” pensioners. It is therefore extremely significant that this week, high school and university students massively began to enter the protest strike movement. This solidarity between generations is a major blow to the government.

The youth are even much more radical than the older trade unionists. They are very aware of the increasing difficulty of building a career. The trend is for qualified personnel to enter the work force later and later, having spent years getting an education. With the difficulty of finding a stable, full-time job, many depend on their parents until age 30. It is simple arithmetic to see that in this case, there will be no full retirement until after age 70.

In short, workers are trying to halt a clear assault on their ability to live decent lives.  We face similar challenges here in the United States.  As previously discussed, most older workers are employed in highly demanding jobs making it unlikely that they can stay employed until full retirement age.  And our government is busy debating reforms that would slash benefits or further delay the age at which full benefits are paid.  Most importantly, the rational for these attacks on our social security system–that the system is heading for collapse–is easily challenged; our system remains solid

We need to be studying the French experience closely–to better appreciate the universality of attacks on social programs and to better appreciate strategies of resistance.  In terms of the latter–did you know that (as the New York Times reports) “credible polls showed that a majority of French supported the strike”?

For more pictures of events in France visit here.

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