IMG_0561Yesterday was unusually quiet here in France profonde. Almost no traffic. Most people stayed home if they could. We slept in late. This impromptu vacation day was thanks to the national strike against pension reform.

I wanted to have a light, happy post today after last week’s Debbie Downer rant. But yesterday’s strike, which is continuing today, is inescapable. Even if you don’t live here, you probably want to retire one day, so read on.

The French system is pretty generous, but demographics–folks live longer and have fewer babies–mean that while there were five workers for every retiree in 1960, today there are three. While pensioners and those close to becoming one argue that they paid for their retirement, the system is like many others, including Social Security in the U.S.–those working now pay for those retired now. It isn’t an account like a 401(k) where you put in your money and you have it later.IMG_0559The problems with 401(k)s are that (1) most people don’t save enough, (2) those who do save don’t invest the money wisely, being either too risky or too conservative and (3) if the market drops when you want to retire, you might not be able to afford it. As with any investment, you could lose everything.

A broader system offers better protection for the average Jacques. Also, because it’s run by the government, workers don’t have to worry about their employer going belly-up and their retirement disappearing in a poof of smoke with it. Remember Enron? A few greedy guys made some sour deals and cooked the books, bringing down the company. More than 9,000 employees had retirement plans based on Enron stock, which became worthless.IMG_0572 The problem in France lies in the details, as is often the case. There’s retirement for a special few, and then retirement for everybody else. President Emmanuel Macron wants to get rid of the 42 régimes speciaux, which cover only 3.4% of the working population. Most French think the exceptions should be abolished–most of them don’t benefit. Probably many of those with an exception think the other 41 régimes are unworthy, but don’t even THINK about touching theirs. And some fear a domino effect–if one exception is eliminated, then the others will eventually go as well.

I have a friend who retired in her 40s. Seriously. She was a secretary for a notaire, or notary. In France, notaries are inescapable, necessary for formalities for property purchases, wills, etc.–more like lawyers than like a notary public in the U.S. The notaries created a special retirement regime in 1937, before the general one, and their exceptions got grandfathered in. Granted, they pay in a lot more than regular workers do. In general they retire if they are 55 and contributed for 25 years, but there’s an exception to the exception, which my friend enjoyed: If you worked 15 years for a notary and you have three kids, you can retire at any age you want.

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Look closely–there’s a cross.

Ballerinas at the Opéra de Paris (but not ballerinas elsewhere!), can retire from age 40 to 60, having paid in for 10 to 15 years (there are subcategories to this subcategory). Extra credit for having kids. It’s true that being a ballerina is physically taxing, poorly paid and not something that translates to other professions. If you have an injury and can’t continue, your options could be limited.

We know somebody who was a train conductor (as in ticket taker, not driver). Yes, decades ago, working on a train was dirty and dangerous. But today they are electric and automated. He says, “When I was hired, I signed a contract with the terms that I would retire when I was 60. They have to honor that.” I pointed out that when he joined the railroad, life expectancy was 73. Now it’s 83. The contract was based on calculations for the lower life expectancy, even if that wasn’t stated explicitly. Was he willing to live (or die) up to his side of the bargain? He sputtered and admitted that people living longer in retirement would require more money, but that should come from somebody else, not him. Younger people should pay more. IMG_0568Not so easy. Youth unemployment is high–almost 21%–for a bunch of reasons. One is that workers enjoy some protections from being fired, so employers try to make do without hiring rather than get stuck with a bad apple. That also is changing, with protections being chipped away–sometimes for the better, sometimes not. The bane of gig jobs is creeping in, like kudzu or some other invasive species. But changes to worker protections did help lower unemployment overall to 8.5% from double digits a few years ago.

People say, well, older workers should retire and make way for younger ones who need jobs. But this is bad for the economy. The French call retirement “les grandes vacances”–the big vacation–but it’s really more akin to unemployment: It’s taking money from working people and giving it to non-working people. The more people who work, the more the economy hums, and the more jobs there are. In the case of Japan, where 30% of working-age women don’t work, every one percentage point increase in work participation by women would boost the economy by half a percentage point. It makes sense–you turn to services to make life easier, maybe ordering takeout or going out, having the house cleaned and laundry done, looking good by having haircuts more often. It doesn’t have to be all about consumption of stuff.IMG_0563Raising the retirement age is inevitable–retirement initially was based on an age that most people wouldn’t reach. So yes, you would work until you died. The idea wasn’t for a big vacation but to prevent the elderly, no longer able to earn a living, from becoming destitute.

In effect, broad-based pensions are demographic Ponzi schemes that worked until the baby bust. This is not an argument for more babies–far from it, the global population is big enough–nor is it an argument against government pensions. It’s an argument that nothing is set in stone, and that programs have to adjust. It isn’t sustainable to have people work for 30 years and be retired for 40. Even a 40-40 split doesn’t work. Retirement has to be shorter. Retiring later beats dying earlier.IMG_0571Working longer is easier said than done. I know so many people who have been laid off (not in France, though), even as their employers advertise job openings. I suspect my friends have been culled because they’re too expensive. They are all extremely sharp and diligent, so it isn’t because of their productivity. Their employers are profitable and hiring. Employers increasingly look at workers as disposable, even in sectors that need “knowledge” workers. With job applications now almost entirely online, it’s hard to cut through the algorithmic filters, even if you don’t fill in your graduation dates or if you drop off a decade or two from your résumé. If they want 5-7 years of experience for a “senior” job, then you’ll be spit out if you have pared down your experience to 10 years. Older people (anybody over 50) are considered slow, lacking innovation and tech-savvy.

It all means the problem is thornier than just changing the age, and look at what that step provoked. 800,000 protesters across France yesterday. I really love the way the French take to the streets to show what they believe in–Je Suis Charlie, Nous Toutes, the environment. On the other hand, I often disagree with their causes. The Gilets Jaunes originally were mad about a pollution tax. And with the pension strike now, it’s about people saying “I want mine even it it costs you.” Every French person under age 50 who isn’t part of the 3.4% enjoying special status should be out in the streets protesting in favor of change. They’re the ones getting stuck with the bill.

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Photos of the church at Rustiques, built in the era when you worked until you died.

29 thoughts on “On Strike

  1. So very well explained. I’m in total agreement with you but – probably same as you too – find it hard to make people understand that the long held beliefs of entitlement MUST change. The country CANNOT any longer sustain all those sub- and special-laws & conditions. You are really spot on with your observations and explanations.

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  2. Yes, it’s a complex problem. In the US, although unemployment is very low (less than 4%), social security is not paid equitably by higher earners, which seems nonsensical to me. In addition, like public pensions throughout the states, people’s contributions have been raided by the government rather than set aside for their intended use.

    I do believe that France is wise to encourage people to have more kids. Population declines among developed nations lead to economic decline and a lack of dynamism in civic life. The young care for the old— a pretty dreary prospect. My husband and I had five kids (you could call that a lack of planning). As we had each one, people would say “Don’t you know about birth control? Don’t you have anything better to do? Etc. I’d snarkily reply “Our kids will be paying your social security.”

    As it turned out, our kids were and continue to be our great delight. All were educated and they contribute to society by working, paying taxes, and living responsibly. The US offers no bonus for people who have more than one or two kids, and I think that’s a mistake. A dyn

    Liked by 1 person

    1. Yes, but did you know that in 1950 there were “only” 2.6 billion people on Earth and now there are more than 7 billion? We are destroying the place. I love kids and think that if you want 5, then have 5, but if you want none that’s OK, too. (And hopefully, if you want none or one you have that and not five or six.) But the system has to change to reflect demographic change. Longevity alone requires it.

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      1. Yes those are confounding stats. And air quality in the highest population countries is scary. I’m thinking of India in particular—beset by economic issues, climate crises, and large population. Yet I tend to believe that the dynamic population can strive to overcome the gross inequality, which is likely a first step to solving the social problems that derive from that.

        Liked by 1 person

  3. Have to come back to the end of your post which for some reason I didn’t see in the reader…. I have spoken with several people from the lower income brackets and they all are all FOR striking, but didn’t even ‘bother’ to say that the reason is ‘They are paying for the retirement of the older’. They ‘only’ strike because it’s good to be off the work, to show an acceptance of the ‘right to strike’ and when I told them they wouldn’t be able to celebrate Christmas properly with their families because they won’t be paid, it was all ??????? in their eyes. Several people, not one. In Switzerland, they up the retirement age further and further, although even there you are very hard pressed to find a job, any job, after you’ve crossed the 50th b’day off. And there are NO exceptions to the rules, if anybody wants to take retirement earlier than 67 (men), 64 (women), they can do that at their own risk. The state is not shelling out. I personally find that Mr M. at least is handling and not just talking. He clearly sees that the country is soon running out of cash and all those strikes, the destruction of material, goods and closing down of business, access to petrol, food, transport is costing SO MUCH money, it can never be picked up later on.

    Liked by 2 people

    1. I saw that in one town, protesters smashed shop windows. I thought, those poor shopkeepers try to stay in business in the face of Amazon and other cut-rate online retailers, they give some life to downtowns, and this is what they get?

      Liked by 3 people

  4. (Continued—somehow got cut off) A dynamic culture requires a burgeoning young population. At the same time, I agree that it’s irresponsible to retire at 40 or 50 and drain the public dole in doing so. To me, it’s surprising that this is allowed. It’s one thing to retire in one’s own savings, quite another to do so on other people’s money!

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  5. One of your best ever posts! I was really appalled by all the anomalies in the system — not just the 42 speciaux who don’t know how well off they are, but the cruddy end of the system where you get people in and out of work. A lot of those people under the current system are not credited with any contributions if they don’t work a minimum number of hours per quarter — so any work they do get is ‘wasted’ from that point of view. On the other hand, I got my projected pension statement the other day and was pleasantly surprised at how much it is going to be. Not a lot, but enough to pay the grocery bill at least. And that’s having arrived into the system very late.

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    1. I realize I didn’t touch half of it. Do you remember the pre-401(k) system, where you got “vested”? So after, say, 4 years, you’d be entitled to x% of a pension, and it would take years before you could get a full one. The thing is, if you switched jobs before your 4 years, then they counted for nothing. If you worked at four jobs, each for just under 4 years, then 15.5 years later you would have zero toward a pension. It was good for employers–golden handcuffs–but bad for the economy and for workers because nobody wanted to switch jobs.

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  6. This brings back so many memories of when I lived in France. Someone was always striking over something despite the fact that they had it so very good.

    Every time my husband returns to France this argument ensues. It doesn’t take a genius to see that they can’t continue doing what they’re doing. The numbers don’t add up.

    We have seen the harsh reality of ageism when it comes to jobs here in Canada. It’s not easy. Probably 95% of Canadians over 65 that want to retire can’t because they don’t have enough money. The only jobs they are left with are at Walmart and McDonalds. Even those low paying jobs will be deducted from any government assistance/welfare.

    Our systems aren’t working and will not support the ageing population.

    Suzanne
    http://www.suzannecarillo.com

    Liked by 1 person

  7. I had a conversation tonight with a friend who used to live in Paris. She pointed out that most industrialized nations (ex-the US) spend about 8% on pensions; France spends 14%. So clearly something has to be trimmed before the system devours itself.
    And while 401(k)s may seem useful, they came along late, they’re a huge giveaway to the finance industry, most people don’t understand how to utilize them wisely, and a lot of people just plain don’t have them. So if France is over-pensioned, the US is grievously under-pensioned.
    On a happier note, your pictures are, as ever, lovely.

    Liked by 1 person

      1. I heard the saddest story today about medical bankruptcy. If you’re a millionaire or billionaire (or just say you are) you can stiff your contractors and declare bankruptcy multiple times and still be OK. But if you are a regular person you can go to jail for unpaid bills, even if you are paying but not fast enough.

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        1. If you are a regular person but without insurance, or have some insurance that’s inadequate, you can also negotiate some bills in the US. The “system” bills large purchasers of its services (corporations) at wholesale but bills individuals at retail, much higher. Hospitals often have a staff person whose job it is to manage these situations. Never accept at face value any bill presented to you, always examine it carefully and ask a lot of questions.

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  8. So interesting to read about retirement in other countries. I’m 72 yrs old, was self employed for many years so paid in Social Security but set up my own retirement fund as well. I was an unsuccessful realtor but did buy rental houses as they came on the market and I could afford them. I also helped my mother invest in rentals. I was mortgaged to “the hilt” as they say. I finally took a job teaching school (special needs students) in a public school where money was paid into a retirement plan for me. After retirement from teaching I knew that full retirement was not for me and I took a part time job in the social work arena. As I neared 70 I decided it was time for me to be really retired. So now I manage my rental properties and those of my (now deceased) mother for my brother and myself. Her mortgages are all paid off and I’m now down to one mortgage which will be paid off in a couple of years. Being ever so careful about money and spending has paid off for me. Sadly what has worked for me isn’t available to lots of folks. I think of those people this time of year when I’m helping with the local volunteer fire department to put together food boxes for people in our area who are in need. I’ve said it many times but I’ll say it over and over – and over – no one in the US (one of the richest countries in the world) should be hungry. It’s a travesty!!!

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    1. It’s great that your rental investments paid off. It can seem like a smart thing, but timing also is a factor that one sees only in retrospect. My grandma also bought rental properties, which gave her a retirement.
      When so many people are working yet unable to make ends meet or to afford a home, how can they save for retirement? Even if they saved, how would they have the means to figure out how to invest wisely, so they would have enough decades later? It seems like a system designed for people already rich.

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      1. It certainly does seem as though the deck is stacked, so to speak, against many people. Even though they have worked hard it is sometimes not enough to see them through what should be the “golden” years. That fact should be a mandate to all of us to do whatever we can to help other people and to remember that, sadly, the good things in life aren’t equally distributed.

        Liked by 1 person

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