Pension Reform and Protests in France
French President Emmanuel Macron has been pushing proposed changes to the country's retirement system for... well, since his reelection campaign. His proposals have proved deeply unpopular, though. The French parliament made clear it would not enact them, so Macron is using a constitutional loophole to change them through executive order. Protests that have been going on for weeks turned violent late last week.
What's at stake may seem quaint to us Americans. Macron wants to increase the retirement age from 62 to 64. Here in the US the "full" retirement age is already 67 (for people born since 1960). And it's not just we Americans who work longer than the French. In Germany the retirement age is 65 years 7 months. In the UK it's 66.
Macron's reason for pushing the reform is the same as that of various US politicians who've been calling for Social Security reform for decades: the system is unsustainable. While the math is pretty clear that US Social Security will start running short of money as soon as 2033 unless something major is changed, it's not so clear how much financial jeopardy France's retirement system faces. Partly that's because it's funded differently, paid out of general taxes rather than through a separate system of levies. The same demographic realities that imperil the US system, though- longer life expectancy and declining population growth- underlie pension cost increases in France.
Social Security in the US has been called "the electrified third rail of politics", a term popularized by Speaker of the House Tip O'Neill in 1982. The metaphor refers to public safety warnings common at the time about the dangers of touching the high-voltage third rail in many electric railway systems. Touching it is often deadly. Macron may find grabbing that third rail kills his political career.
What's at stake may seem quaint to us Americans. Macron wants to increase the retirement age from 62 to 64. Here in the US the "full" retirement age is already 67 (for people born since 1960). And it's not just we Americans who work longer than the French. In Germany the retirement age is 65 years 7 months. In the UK it's 66.
Macron's reason for pushing the reform is the same as that of various US politicians who've been calling for Social Security reform for decades: the system is unsustainable. While the math is pretty clear that US Social Security will start running short of money as soon as 2033 unless something major is changed, it's not so clear how much financial jeopardy France's retirement system faces. Partly that's because it's funded differently, paid out of general taxes rather than through a separate system of levies. The same demographic realities that imperil the US system, though- longer life expectancy and declining population growth- underlie pension cost increases in France.
Social Security in the US has been called "the electrified third rail of politics", a term popularized by Speaker of the House Tip O'Neill in 1982. The metaphor refers to public safety warnings common at the time about the dangers of touching the high-voltage third rail in many electric railway systems. Touching it is often deadly. Macron may find grabbing that third rail kills his political career.