France pension protests: Why pots, pans and police could clash on International Workers’ Day

The recent demonstrations in France against President Emmanuel Macron’s proposed pension reforms are nothing new for the country. According to the interior ministry, a record 119,000 protesters marched in Paris alone on March 23 and 1.08 million marched in France — that’s one in every 65 people in the country.

A new set of protests rocked the country after the constitutional court confirmed the legality of the reforms on April 14.

And Monday — May Day — looks to be another flashpoint.

Street protests are a legitimate forum for democracy for the French, says Daniel Béland, a professor of political science at McGill University who did his PhD in Paris. They view democracy as a continuous process, not something that happens just once every five years when they vote in local and national elections.

All social classes, from blue-collar workers to the bourgeoisie, will join in. For example, the gilets jaunes (yellow vests) began in 2018 as a movement of the working class against rising fuel prices. Before that, 2013’s Manif pour tous (“Protest for All”) assembled mainly right-wing and religious protesters against the introduction of same-sex marriage.

Today’s protests aren’t even the first ones against pension reform. In 1995, President Jacques Chirac had to abandon his reforms because protesters brought the country to a standstill (especially because teleworking was not commonplace at the time).

They did this by shutting down railway lines, which run through most of the country and are essential for transportation, even in small towns, says Béland. The railway network is heavily centralized around Paris, which means that protesters who shut down Paris can shut down most of the country. Canada is far less centralized, so it would be more difficult to inflict the same pain here.

One of the main reasons Macron is so unpopular today is that French society puts a high premium on self-expression, says Jean-Benoît Nadeau, the Montreal-based author (with his wife, Julie Barlow) of “Sixty Million Frenchmen Can’t Be Wrong,” a book about the French world view based on their experiences during their years living in Paris. Workers in a company will expect to be consulted about major decisions, even if such a consultation would change nothing because the owners and senior executives have already made a decision.

Macron’s invocation of article 49.3 — passing the pension reform by force instead of through a vote in Parliament — was considered the ultimate shutdown of expression. It also means that the street protests today are not just about pension reforms, but about the perceived denial of democracy and the general feeling that Macron is out of touch.

He is viewed as a puppet of big business, says Béland; Macron’s background as an investment banker is viewed with suspicion. Instead of asking workers to give more, opposition parties across the political spectrum would prefer to increase corporate taxes, especially for giants like Amazon and Google.

Béland says that Macron “sees this as part of his political legacy: something that’s not popular now, but that, 20 years from now, people will see was the right thing to do to preserve the French pension system … He had the courage to reform the French pension system, something that several presidents before him failed at.” This is Macron’s second term as president and thus his legacy mandate, as French law bars him for standing for re-election again.

Béland believes he will try to hold on for a few more months and wait for the protests to lose steam in the summer, when the French go on vacation and aren’t around to mobilize on the streets.

“When the trash bins aren’t removed for weeks and weeks, it smells bad. At some point, people get fed up with it, just like how people in Ottawa got fed up with the convoy. If Macron can brace for the next two or three months, he might get away with it.”

The trash in Paris has been removed, and strikes in early April were much smaller than at their height in March. A strike on the Paris metro system two weeks ago did not seriously impede transportation in the city.

In the hipster Butte-aux-Cailles neighbourhood in Paris that day, the protests had already died down by the evening and turned into something more akin to an outdoor drinking party. Students sitting on pavement with a glass in their hand greatly outnumbered labour organizers in vests angrily demanding concessions from the government.

But anger has mounted again now that Macron has pushed through the law. Protesters have brought pots and pans to drown out the voices of Macron and his ministers, and unions have called for fresh protests on May 1, International Workers’ Day (and a bank holiday in France). Macron still has four more years left in power for his opponents to make their voices heard.

What are the French pension reforms about, anyway?

The first pillar of the reforms is to raise the retirement age from 62 to 64. The French retired at 60 until president Nicolas Sarkozy’s reforms in 2010, and 64 would still be younger than most Europeans.

Retiring at 62, or even 64, might sound like a luxury to Canadians; many international commentators deride the French as simply being lazy. But “it’s a very different vision of society,” counters Yan Chantrel, a French opposition politician who lives in Montreal and represents the interests of other French citizens who live overseas.

“Some Canadians think there’s nothing in life but work … but retirement doesn’t mean disengagement,” he adds. “There are an enormous number of retirees in France who volunteer or who are part of clubs. They give a lot to society.

“They create art or they make music … They also look after their grandchildren. We want to preserve this time for old people.”

The French actually don’t dislike work, says Denis Latulippe, a professor at the Université Laval and a director at Desjardins, a financial services company. They simply think that “after (they) have worked or have delivered an adequate performance at work, they have the right to a vacation worthy of the name … I have given, so now, I have the right to retire.”

The reforms also remove the special advantages that many workers had, allowing them to retire even earlier while still receiving a full pension. These régimes spéciaux (special regimes) exist in many countries for, for instance, police officers, members of the military and prison guards in order to recognize the pénibilité (the burden or hardship) of their job.

In France, they also apply to workers on the national railways, the Paris metro system, thecentral bank and the Paris National Opera — whose jobs might not be as “hard” as that of a police officer. The many unions representing these workers are proactive in organizing strikes.

Unions cover less of the workforce in France (11 per cent in 2016, the most recent year with available data) than they do in Canada (26 per cent in 2016), says Béland, but they have a formal role in managing the state pension system, and are able to mobilize more than just their own members onto the streets.

They “frame the régimes spéciaux as part of an attack to people’s entitlements and say that this is an attack against workers in general,” says Béland, “even if it affects only people covered by these régimes spéciaux.”

How France compares to Canada

Another important form of solidarity binds French workers together: intergenerational solidarity. France has a pay-as-you-go pension system, where today’s workers pay for today’s retirees; instead of saving for their own retirement, today’s workers will rely on tomorrow’s workers to pay for their retirement.

In contrast, Canada’s pension system has three main components. Two are public: Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), which pay a basic amount independent of workers’ lifetime contributions, and the Canada Pension Plan and Quebec Pension Plan, which pay more to those who earned (and thus contributed) more during their career. The third component are private pension plans, managed by individuals themselves.

“If I participate in a private pension scheme today, it’s as if I’m putting money in a bank account with my name on it that I will use when I retire,” says Latulippe. “There’s no solidarity with others there.”

Pensions are as fundamental to French identity as health insurance is to Canadian identity, says Latulippe. The French associate private pensions with an unwanted Anglo-Saxon cultural invasion. “(Public) pensions are the incarnation of French solidarity,” he says. “Talking about private pension funds is like trying to break the French apart.

“The Canadian social contract involves ensuring that the public pension system (CPP/QPP) survives and that those on low incomes have a basic pension (OAS and GIS). We cover the basics of people’s retirements.”

Indeed, there was anger when then-Prime Minister Stephen Harper raised the age of eligibility for OAS and GIS to 67 from 65; other parts of the pension system weren’t touched, and Trudeau had an easy time reversing the “cavalierly introduced” policy, says Latulippe.

“For those who earned higher incomes when they were working, it’s their own responsibility and not the government’s to ensure they have sufficient income in retirement.

“On continental Europe, there’s less room for personal responsibility.”

Shaky financial footing

But although the French government has much more responsibility for its citizens’ retirement, its pension system is nowhere near as financially sound. Its reserve funds (the investment assets it holds to manage funding shortfalls and generate more assets for future shortfalls) are only seven per cent of its GDP, compared to roughly 26 per cent in Canada. In addition, almost 180 per cent of Canada’s yearly GDP was invested in private pension schemes in Canada in 2021, compared to only 12 per cent in France.

The French system’s shakier financial foundations, says Latulippe, have convinced Macron of the need for reform. The pension system is currently balanced, according to projections by the Conseil d’orientation de retraites, a non-partisan public body cited by politicians from all political parties in France.

But the problem is that the system is predicted to spend more than it brings in for at least the next 20 years, in the best-case scenario. Despite this, opposition parties contest the need for reform, although they do not contest the projections by the Conseil.

Without reforms, “there are projected deficits on the order of (at least) 0.5 per cent (of GDP) per year, every year,” says Hervé Boulhol, a pensions economist at the OECD. “The most reasonable assumptions show a deficit for the next 50 years … and 0.5 per cent is with very optimistic assumptions.

Deficits accumulate and become debt, so after 50 years, this would be on the order of an additional debt of 25 per cent of GDP.

Winners and losers

So under the assumption that pension reform is necessary, three approaches can bring the system back into balance: reducing benefits, increasing contributions or increasing the retirement age.

France already spends 14 per cent of its GDP on public pensions, which is the third highest among OECD countries; Canada spends only five per cent of its GDP on public pensions.

But pensions (relative to average wages) are already anticipated to go down over the next 40 years — one component by 10 per cent and another component by what Boulhol calls a “drastic” 50 per cent on average for those in the private sector and 35 per cent for civil servants. (The estimates of future pension deficits already take these reduced pensions into account.)

France’s employees and employers must also contribute, in total, 28 per cent of employees’ salaries to fund pensions, which is the second highest in the OECD, where the average is just 18 per cent.

So the most obvious way, from an international perspective, to improve the pension system’s finances is through raising the retirement age, says Boulhol.

But choosing how to carry out pension reform is a political decision, Boulhol adds, because some people will lose out. According to Macron’s opponents across the political spectrum, it is those who work in more menial and physical jobs who will lose. They have lower life expectancy and fewer years of life expectancy in good health.

Macron’s opponents claim that the proposed reforms raise the retirement age to 64 for everyone, so those with lower life expectancy — by and large the lower classes — will have fewer years of good health in retirement.

This is debatable: Those who have lower life expectancy often start work before the age of 20 and are still entitled to retire before the age of 64 (as long as they have put in a certain number of years of work).

However, it is true that a uniform increase of two years for everyone is a larger hit for those with lower life expectancy. The government has also admitted that women will be slightly more penalized than men, because they have generally spent more time out of the workforce and thus will need to work longer to meet the number of years for a full pension.

The reform is also harsh to those in their 50s who were on the cusp of retirement, says Nadeau. What’s more, these workers also have the toughest time looking for work because, with the exception of an underclass of poorly regarded and poorly paid service jobs, the French receive a lot of on-the-job training.

“Tax collectors will get six months of training,” says Nadeau. “Even blue-collar workers will be trained extensively for what they do.

“If you hire someone who’s 50, you’re hiring someone for (maybe) eight years. You have to train him for six months out of those eight years. It’d be better to train a young person.

The French “have a strong streak of ageism,” says Nadeau.

And an employment contract is often a prerequisite to signing a rental contract, as insurers won’t insure landlords without this guarantee. It can also be hard to open a bank account without a job.

Some opposition politicians believe that before increasing the retirement age, the government needs to improve the employment prospects of older workers.So this month’s ruling by the constitutional court angered the opposition beyond just paving the way for Macron to pass his reforms: It also struck down several articles in the proposed reform that made companies more accountable for how many older workers they hired, saying that they were tangential to the main reforms.

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