Macron’s Retirement Bill is About Far More than Policy
Sophie Ulm
Staff Writer
On April 15, French President Emmanuel Macron signed a controversial new retirement bill into law after months of anticipation. The French people have responded poorly to the path to taken for law’s implementation, coming amid some of the largest protests France has ever seen. The law is highly controversial in France not just for what it aims to do, but also for the way it was passed and the implications it could have for the future.
As with many developed countries, France has seen an increase in its average lifespan and a decrease in its birth rate. This phenomenon has sparked concern over the viability of France’s current pension plan, which requires members of the labor force to work until the age of 62 before receiving their full retirement pensions. Additionally, according to France’s Pension Advisory Council, the current system has a predicted annual deficit of 10 billion euros between 2022 and 2032. The new plan aims to gradually realign the budget, as well as adjust the mandatory retirement age to ensure the viability of the French workforce.
The most notable change the new law makes is increasing the legal retirement age in France from 62 to 64 years old. Additionally, workers will have to have worked for 43 years to access to their full pensions, up from the previous standard of 42 years. The law does not change the retirement age for people who took substantial amounts of time off during their careers, which will remain at 67 years old. The law will gradually enter effect starting September 2023, increasing the retirement age by 3 months per year until 2030. Pension payment plans will begin to shift gradually so that by 2027 workers will have to make social security contributions over a full 43 years instead of 42.
The retirement age and working years clauses go together, meaning that one must both work for 43 years and be 64 years old to retire with full benefits. There are a few exemptions to this standard, depending on an individual’s line of work and the danger associated with different jobs, however these guidelines are also changing. Despite the current minimum retirement age being 62 years in France, the average age of retirement is just over 64 due to the working period requirement. It also means that the average retirement age will likely be closer to 66 years old after the new law is implemented, rather than 64 years.
Jobs deemed dangerous or arduous will see an increase from their current earlier retirement ages by the same number of years as the general population. Currently, this category of professions include police officers, air traffic controllers, and sewer cleaners. These positions, which currently have the benefit of a retirement at the age of 52, will retain their slight benefit, although many other special groups will lose their early retirement benefits.
There are a number of “special regimes” in the French pension system that currently receive special benefits that are being phased out because of the new law. These groups include professions ranging from rail workers to bank staff to Paris Opera House performers. While the special groups containing opera house performers and seafarers will remain, the new law ends these special group designations for new members of the workforce.
While these new criteria for “special regimes” do not affect people currently in the workforce, they will have an impact on the fields of work themselves. Most of these regimes come from public sectors, one of the groups with the most to lose due to their lack of desirability for new workers. Changing the requirements for jobs that are already not the most sought after and decreasing their benefits could cause problems down the road.
Another element of the law that has not been commonly discussed is the creation of a “Seniors Index,” which will be modeled after the French Gender Index. This new system will focus on ensuring adequate training in companies surrounding the hiring and training of seniors, with the hope of reducing age-based discrimination in the workforce. Though age discrimination is illegal in France, recent studies have found that it is still an issue in the workforce, another reason that older people are worried about maintaining their working status.
Since the end of World War II, the idea of an early retirement and a state funded pension has been considered a nearly sacred right by much of the French population. This right does not, however, come without concessions from the French people. The tradeoff that the French workers have made is simple: higher taxes in exchange for a lower retirement age than much of the rest of the world. For the French people, this is not an “either … or …” situation. If the right to retire early is diminished, this trade off no longer exists, and the high taxes become a greater burden.
The tax-to-GDP rate in France was 45.1 percent in 2022, over 10 percentage points higher than the global average of 34.1 percent. This high tax rate is what the French people exchange in order to have a guaranteed security net in their retirement. This exchange has meant that the French could enjoy a long retirement, receiving on average nearly three-quarters of their pre-retirement pay through their pensions. This relationship has also contributed to France having one of the lowest poverty rates for retired people in the developed world. In France, just four percent of the retired population falls under the national poverty line, compared to the average 13 percent around the world. The torment of high taxes in France has been a willing tradeoff for a long and prosperous retirement, and for many, the increase in retirement age signals a threat to this agreement.
After the bill was adopted by the French Senate on March 16, a vote was scheduled in the lower house with much less certainty about the outcome. Pundits predicted the bill’s passage in the Senate, given the conservative majority who favored the measure as a way to combat the predicted pension issues. However, after having lost a majority in the lower house in the most recent election, Macron did not have guaranteed support. Due to this, in the minutes before the vote was to be held, President Macron’s administration made the decision to invoke Article 49.3 of the French constitution, a clause giving them the power to bypass the lower house vote and enact the bill.
This maneuver is not particularly unusual for French administrations, however, it is not usually used on bills facing national backlash. The move is often used to diffuse dissension among the Parliament’s majority, not among the general population. The current French Prime Minister, Elisabeth Borne, has used Article 49.3 ten other times in her tenure, however, all were focused on budget bills. This measure also allows for a motion of no-confidence within 24 hours of its use. This motion requires support from half of the seats in Parliament, and results in the rejection of the text and the forced resignation of the government. There was an attempted vote of no confidence against Macron, but it did not achieve the required number of votes.
Though political divisiveness over things like budget is not unusual, such an extreme lack of support by the public to a bill is. Polls have shown that roughly 80 percent of the French population does not agree with raising the retirement age, and a majority of individuals want to find another solution to the pension problem. Even without considering their stance on the bill, 58 percent of French people disagree with how the bill was passed. With that much of the country against a bill, the attempt to push it through without letting it go through the total path provided more reason for the French people to be upset than they already felt they had.
This is not the first time that the article has been invoked against the will of the people, but the outcome could be quite different. In 2006, a bill regarding work contracts for youths that went to law following the same procedure as the current retirement bill and was also met with intense protests. Many protestors have cited the similarities between these two movements, however there is one noticeable difference: the 2006 bill was scrapped, despite the use of Article 49.3, in an effort appease the public. Despite the idea that protests can change the decisions of governments being a historical belief in France, it does not appear that Macron’s bill will face the same end as the 2006 bill.
Article 49.3 is a part of the French Constitution that was adopted in 1958, and the vote of no confidence clause has only been used successfully once. The broad power granted to the president with this clause is a result of General Charles de Gaulle’s desire to stabilize the government in the tumultuous period following World War II, though the use of it to raise the retirement age seems to have more of a destabilizing impact due to the unpopularity of the move.
The last time that the retirement age was increased in France was 2010, also coming after large-scale protests. What was thought at that time to be a one-time fix is now seeming to the French people to be more of a common precedent. As life expectancies and birth rates change, many French people have begun to wonder how long this new retirement age will last, and if it will increase again in the near future. The passing of this new law, in addition to the law passed in 2010, seems to set the precedent that when the pension budget begins to fumble, the retirement age will increase despite public opinion.
Though the 2010 bill was met with large-scale protests, the protests over the current pension bill swelled much faster. This may be due to a shift in mindsets regarding working overtime in France, as the country has a high productivity rate and only a 35-hour work week, which is likely leading to the high burnout rate in the country. According to a 2018 Eurofund European Working Conditions Survey, France has a burnout rating of over 3.25 on a 5-point scale and is one of the only countries in Western Europe with a “high” ranking. The short hours combined with the expectation to compete with other countries in terms of productivity means that French workers are having to do in 35 hours what most workers around the world do in 40. The intensity of these working hours also contributes to the sacredness of retirement in France. With the new proposal to raise retirement age coming at a point when the burnout rate is so high, many people who have never protested before took to the streets, making the current demonstrations even larger and more streamlined than the 2010 protests.
Despite comparisons to past bills that led to successful protest movements, the future of this bill does not seem to be wavering. One of the biggest reasons for this is that Macron does not need to preserve himself or his party politically. As this is his final term as president owing to term limits, there is no need for Macron to be thinking about how this bill will affect his political future. Even stronger than that, perhaps, is that Macron does not need significant party continuity. Experts have cited the fact that not only is Macron’s career ending regardless of the bill, but that his party, the new Renaissance Party, was created for him and around him. Some suspect that this means there is not a need for him to keep his party popular, meaning that the end goal of the is more important to his administration than ratings.
The retirement bill has also exacerbated rising concerns about whether or not the French government is listening to the voices of its people. The use of Article 49.3 on this bill has represented the government using its powers to outweigh the voices of the people, not just the voices of the Parliament. Using the Article in this way not only goes against the will of a majority of people, but it could set a pattern in which the government easily circumvents the will of the public without taking their concerns into consideration.
In the wake of the bill’s passage and approval by the Constitutional Council, the court that reviews the constitutionality of French legislation, many French people are wondering who the government is speaking for, as it seems to not be the people. Some protestors have called out the Council for supporting the “presidential monarchy” over the will of the people, pointing out the need for the government to listen to its citizens rather than come up with solutions that many see as a band-aid fix to much larger problems.
It is still possible that something will be done to combat the bill, as left-wing leaders are attempting to move the measure to a national vote. This proposal will be decided on by the Constitutional Council in the coming months, though many leaders have already said that they are not done with the bill and that its fate “is not sealed.”
Image courtesy of Nara
