Why France's president and unions are at odds over pensions

Analysis: Why France’s president and labor unions are at odds over pensions

Protesters carry flags and march in streets of Paris.

By SYLVIE CORBET

Associated Press

Jan. 24, 2023 12:59 PM PT

PARIS — The French government is presenting a bill on Monday that foresees broad changes to the pension system that will notably push back the legal retirement age from 62 to 64.

Unions aren’t happy, and more than 1 million people took to the streets last week to reject the measure. More strikes and protest action are planned for next week, and probably beyond.

What does President Emmanuel Macron’s government want to change and why, and what does it mean for workers, and why are so many people opposed?

The pension system

All French retirees receive a state pension. The system’s funding is based on a tax paid by those who are working.

The system is projected to fall into deficit in the coming decade as France’s population ages.

The average French pension this year stands at 1,400 euros (about $1,500) per month, once taxes are deducted.

The system is complex, with different benefits and eligibility depending on professions, and the private and public sectors. Some workers are allowed to take early retirement, including the military, police officers and people with physically demanding jobs.

The government’s plan

The government says the changes will make the system financially sustainable.

Workers who were born in 1961, and on track to retire this year, will need to work three additional months. Those born in the next six years will have to work progressively longer periods, up to those who were born in 1968 and after, who will need to be at least 64 and have worked for 43 years to be entitled to a full pension.

Those who don’t meet the conditions, like many women who interrupted their careers to raise children or those who undertook a long period of study and started working later in life, will have to wait until the age of 67 to get a full pension — unchanged from the current system.

Those who started working between ages 14 and 19 will be allowed to take early retirement, as will people with major health issues.

The government argues that the changes will also allow for the increase of the minimum pension by 100 euros, to reach about 1,200 euros for a full career.

Opposition to the planned changes

Opinion polls show a majority of French are opposed to the plan. Thursday’s protests, the first public show of resistance toward the measures, gathered larger crowds than in past years.

France’s eight main worker unions are calling on the government to abandon the age measure altogether. It is the first time since 2010 that all the unions joined forces against a planned reform.

Opponents argue that there are other ways to get financing for the pensions — for instance via a tax on the wealthy or an increase in payroll contributions paid by employers.

Most opposition parties, including the hard-left France Unbowed, the Greens and the Socialist party, as well as the far-right National Rally, vowed to strenuously fight the bill in parliament.

What’s next?

The changes are included in a budget amendment bill that has been formally presented at a Cabinet meeting on Monday. They will start being debated at parliament on Feb. 6.

Macron’s centrist alliance lost its parliamentary majority last year, yet still has the most important group at the National Assembly, where it has hopes of being able to join up with the conservative Republicans party to pass the measure.

Otherwise, the government may use a special power to force the law through parliament without a vote — but such a move will come at the price of heavy criticism.

The bill would then have to be voted on by the Senate, where the Republicans have the majority.

The government aims at passing the bill by summer so that changes can take effect in September. Yet its plans may be disrupted depending on the scale and duration of protests and strikes.