Pension showdown

Print edition : October 22, 2010

France: The Sarkozy government's plan to raise the retirement age triggers waves of protests.

in Paris

VALERIY HACHE/AFP

IT was a gigantic, unending flood of people. Wave after wave of marchers, often wearing funny masks or disguises that conveyed their anger and disgust, bearing placards and banners, beating drums and cymbals, whistling, singing and shouting slogans, demonstrated across France on September 23.

There was an estimated 2.5 million of them on the streets that day. And although the government did its level best to discredit this popular elan, placing the number of demonstrators at one million, there was no gainsaying the strength of the marchers' resolve or the depth of their anger and despair. About the same number had demonstrated in a similar fashion barely two weeks earlier, on September 7.

People demonstrated in their uniforms: nurses in white, firemen with their helmets, factory workers in blue overalls, the managerial class in suit and tie, doctors with dangling stethoscopes. Many came en famille, pushing prams with young children. Life came to a virtual standstill as metro, flight and bus services were reduced to a trickle, schools and post offices remained shut, and hospitals ran on skeletal staff.

In cities such as Paris, Lyon, Marseille Toulouse, Nantes, Strasbourg and Metz, it was the same story, with the size of the protests surpassing trade union expectations. But the most significant fact was that people also demonstrated in some of the country's tiny, far-flung hamlets.

The small island of Ouessant in Brittany, not considered a hotbed of industrial action, is home to 700 people. Some 250 of them felt compelled to show their solidarity with the rest of the country.

Flushed with their repeated success, French trade unions have given out calls for fresh demonstrations on October 2 to be followed by a general strike 10 days later. France looks set for a grim, harsh winter that augurs large-scale disruption in rail, air and road traffic, health care, and postal and other public services.

Pension reform So what is this palaver all about?

President Nicolas Sarkozy with construction workers at a housing site in Villeneuve Le Roi, a Paris suburb, on September 14.-PHILIPPE WOJAZER/REUTERS

At the heart of the protests lie President Nicolas Sarkozy's plans to reform the nation's state-run pension scheme by raising the retirement age from 60 to 62 in the short run and to 67 by 2018 when the deficit-ridden system is expected to balance its books. On September 16, amid acrimonious scenes, the National Assembly, the lower house of the French Parliament where the President and his allies have an absolute majority adopted the draft Bill presented by the government. The upper house, or Senat, will begin discussions on the Bill on October 5.

The hole in the public pension system has come about because France has an ageing population where there are more pensioners than active workers who pay into the pension fund. If not tackled in time, the present system is expected to ratchet up losses to the tune of 50 billion by 2020. In 1945, when the system was introduced, there were roughly four workers for each retiree in France; today the ratio has shrunk to 1.5 workers per retiree.

Two factors have upset this balance: the fact that longevity has increased the life expectancy for men is 85 and for women is 87 now while the birth rate has dropped. The age pyramid in the developed world has been inverted, with old people far outnumbering the young. At the same time, technological advance has meant that in many industries men have been replaced by machines, leading to persistently high rates of unemployment and placing an additional burden on state-funded unemployment benefit schemes.

The economist Olivier Pastre told Frontline: In Germany, the retirement age is 67; in Britain, it is 65 and is likely to go up to 68. Our European neighbours have realised that we have to change this pay as you go' system if we want to save it. France is one of the last developed countries to want to maintain retirement at 60, but that is just not possible. The arithmetic no longer works. It is as simple as that. In France, retirees can hope to lead healthy lives for at least two decades after they stop working. So it is logical to work a couple of years more.

There has been widespread criticism that the Left in France the trade unions and the Socialists, Communists and Greens in the opposition is opposed to any reform. Not true, they riposte. They are not opposed to reform per se.

Private and public sector workers demonstrate over pension reforms in Marseille on September 23. An estimated 2.5 million workers took to the streets that day and also two weeks earlier.-JEAN-PAUL PELISSIER/REUTERS

We are opposed to Sarkozy's specific proposals because they are unjust. We understand that because of changing demographics the system has to be changed, adapted and we accept that. What we reject is this particular reform. The government is adamant about raising the retirement age. But other solutions can be found. Sarkozy has consistently given tax breaks to his rich friends and business supporters. We can look at other means of financing. This proposal is unjust because it penalises two categories of workers who find themselves on the lowest rung of the ladder manual workers and women, said Francois Chereque, the leader of the CFDT, one of France's eight major trade unions.

The 30-page draft pension reform Bill underlines the fact that raising the retirement age will make up for 50 per cent of the deficit in the pension fund between now and 2018. To this will be added 4 billion gained from cutting public sector jobs and 4.4 billion from taxing capital gains and high earners.

In addition to raising the retirement age, the legislation prolongs the number of working years for full pension entitlement to 41 years and three months. There will also be cutbacks in special privileges accorded to specific categories of workers.

Railway drivers, for instance, are allowed to retire at 50 since their work is considered insalubrious and dangerous. But as railway drivers no longer stoke coal and their trains are to a large extent automated, the government has decided to do away with this and similar privileges.

Workers involved in insalubrious and dangerous work will no longer be given blanket exemptions or early retirement. They will have to seek such dispensations on the basis of medical certificates.

Ferdinand, a smelter from France's industrial north, travelled down to Paris to demonstrate with his colleagues. I am bubbling over with anger, like the vats of molten lead I handle every day, he told this reporter. I am appalled by the arrogance, the intransigence of this government.

The Labour Minister, Eric Woerth, is embroiled in a scandal involving a conflict of interest which disqualifies him from leading these reforms. When has Sarkozy ever thought of anyone except his rich friends? I began work as a stripling of 18. I am 56 years old now and have four more years to go before I can call it a day. And now they tell me I have to work another two years? Sarkozy should come here and try it for a few days: standing before a furnace for eight hours, constantly checking its temperature, lugging buckets of molten lead. My back and shoulders are gone. I am an old man before my time. But the President and his ilk do not care for the likes of us. For them we just do not count, Ferdinand said bitterly.

At Part-Dieu Railway station in Lyon, central France, on September 23. The September strikes hit public transport, air traffic and schools across France.-LAURENT CIPRIANI/AP

Critics of the reforms point out that by insisting on a uniform increase of the retirement age, the government will be penalising two extremely vulnerable sections of the population: manual and unskilled or semi-skilled workers, and women.

Most people who work as construction labourers and street cleaners and in other labour-intensive industries do not have high levels of formal education. They thus enter the job market at a very young age as early as 16, or even 14 in some cases and their salary structure is low with very little possibility of upward revision. Often, by the time they are in their early fifties, these people are exhausted with serious health problems linked directly to their hard working conditions. To ask this category of people to work for additional years appears to them to be grossly unjust. The same is true for women, who often interrupt their careers to look after young children. In France, there is the additional problem that female workers, despite legislation stipulating equal pay for equal work, are paid 40 per cent less than their male counterparts, especially in small businesses in the private sector. To oblige these women to work until they are 67 in order to claim their full pension is a double whammy. The government has been remarkably insensitive to these genuine problems and that has added to the anger on the streets, said the economist Jean Paul Fitoussi.

The anger on the streets comes not merely from the government's plans to force the population to work longer and for fewer privileges. Among the reasons for this show of force is also a deep disenchantment with Sarkozy, his style and his message.

I am a 52-year-old divorced mother of four. My husband had a modest job and it was a struggle to make ends meet. I abandoned my job to stay home, to cook and clean and bring up our children. Six years ago I returned to work. My age meant that it took a long time to find a job, and as an office cleaner I make barely 900 euros a month. I am tired, used-up, paid less than my male counterparts. In this situation to ask me to carry on until 67 is an ignominy. I see red when I see Sarkozy cosying up to the big fortunes of this world. He lives on a different planet. He is rude, nasty and vituperative. He has brought France international condemnation and shame, and sullied the role of President. There is no consistency to this government, no sense of solidarity with the poor. The only talk is that of repression and force, of finger-pointing and exclusion against immigrants, against the Roma, against the suburbs, against the Muslims. He has divided this nation, setting one group of people against the other. I cannot support his policies and that is why I am on the streets today, said Melia, a Frenchwoman of Moroccan descent.

Sarkozy's popularity ratings are the lowest a French President has notched up in the history of the Fifth Republic established in 1958. Clearly, the street is trying to send him a message. But is he in any mood to listen?

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