On Thursday, France’s Prime Minister Elisabeth Borne resorted to invoking article 49 paragraph 3 of the country’s constitution to force through its controversial pension reform without a vote at the National Assembly. The question is now how the movement against the bill will evolve, as strikes and protests continue to add up.
Let’s remember that the main objective of this reform project, to which the French are mostly opposed, is to make nearly 18 billion euros in savings. These savings will be dedicated to balancing the system financially, to financing new welfare, but also to sending a signal to our European partners and to the financial markets at a time when the sustainability of French sovereign debt raises concern.
A lot has been written about the bill, from its financial value, to its impact on small pensions, employment of elders or its capacity to do justice to physically demanding jobs.
It appears to us, however, that few voices have really questioned the legitimacy of the reform bill from the angle of intergenerational justice. This is the light we intend to shed here.
Demographic problem
Some might indeed consider that France’s pay-as-you-go pension system has become, in many respects, anachronistic. To ensure that it functions properly and is balanced, the ratio between the number of working people and the number of pensioners must not fall below a certain threshold. If this is the case, tax increases aside, balancing can only be achieved through increased pension contributions, extended work time (which makes it possible both to record additional contributions and to postpone the age at which a pension will be received), or a mix between these different levers.
However, the problem of our pay-as-you-go system is first and foremost demographic. Since 2015, the French population aged 60 and over exceeds that of under 20 years. This shift even took place in 2014 if we exclude French overseas territories. Like many Western countries, France is ageing.
In this context, it is hardly surprising that the ratio of working people to retirees is collapsing. The latest state report on pension shows that the ratio will continue to decline in the coming decades, due to the increase in life expectancy. It will be 1.5 in 2040 and 1.3 in 2070. According to the French National Institute for Statistics and Economic Studies (INSEE), it has already fallen from 2.02 to 1.67 between 2004 and 2020. To give an idea of the scale of the problem, this ratio was 4.69 in 1960!
Of course, this would hardly be a problem were working people to enjoy a significantly higher standard of living on average than their elders. However, research has shown that the standard of living of a retired person is on average higher than that of a working person. In part, this is because households house fewer occupants, but also because of higher property ownership and much lower debt levels.
This is a strange set up that France shares with only two other countries in the world: Luxembourg and Israel.
Boomers’ prerogatives
In our country, the baby-boom generation appears, in many respects, to be at an advantage. Demographics have been favourable to them insofar as they have made less of an effort to contribute at a time when fewer older people were retiring and had a shorter life expectancy.
It is estimated that today’s pensioners receive twice as much as they contributed during their working life. This situation has also allowed boomers – as they are now commonly called – to receive on average an inheritance earlier in their life course, at an age when there is still time to invest, as highlighted by the work of Thomas Piketty taken up by the Council for Economic Analysis.
In view of this situation, it seems legitimate to question the social justice, claimed by the President of the Republic himself, of reform plans that demand that relatively poorer and more precarious workers finance a pension system that benefits people who are on average better off.
By sparing pensioners, only a few months after having retroceded on the question of the revaluation of the generalised social contribution (CSG), the government seems – it is true – to be guided more by the political agenda than by the search for equity. There is no doubt that the preponderant electoral weight of the over-60s may have had some influence on the government’s decisions.
Neglected youth
The working people of today and tomorrow seem to be the government’s great blind spots. At a time when our nation must prepare to take up the historic challenges of this century, our leaders should be concerned about the young people who are deserting the ballot box and under pressure to adapt to increasingly challenging working conditions.
At a first level, they have had to adapt to globalisation and the wild financialisation of the economy that it presupposes. Far from the lights of the “global village”, relocations and new demands for competitiveness and productivity have left many out in the cold.
They have also had to adapt to the digitalisation of society and production tools, and accept what anthropologist David Graeber has termed “&bullshit jobs” at the risk of losing all motivation (as revealed by the phenomenon of “quiet quitting”). Over the years, work has become increasingly precarious and remote, moving away from deserted city centres. Education alone no longer guarantees it.
And let us not forget that today’s youth has been saddled with abysmal economic and environmental debts by previous generations. Could there be a link here with young professionals’ failure to find the resources or desire to bear any offspring? Our rich country has seen seven consecutive years of declining births: is this not the major signal of a crisis of confidence that is eating away at a nation that, by dint of spending its time looking in the rear-view mirror, is obliterating its future?
Let’s not be mistaken, however. The youth and the working class of this country, who have often let things take place without them out of relative disinterest, have their share of responsibility in the current situation. When they do speak out, they also despair of ever really being heard, be it on socio-economic issues or the environment. And while some people are resigned, others – in France as in the rest of the world – are turning to more radical modes of protest.
All in all, the sequence will remain as a new episode in a long series that has ended up giving birth to a reverse solidarity machine. A dysfunctional machine in which today’s and tomorrow’s working people, who are on average poorer and more precarious, are called upon to pay for the economic, social and environmental balance sheet of a now-retired generation.