Strikes disrupted travel across France for the 13th consecutive day on Tuesday, as labour unions angry over President Emmanuel Macron’s planned pension overhauls set off yet another day of demonstrations, reports The New York Times.
Trains were canceled. Some schools were closed, as was the Eiffel Tower. Doctors and nurses also went on strike on Tuesday to protest cuts to the French hospital system.
The protests represent the biggest domestic showdown for Mr. Macron since the Yellow Vest movement last year, and they are testing his reformist zeal as he tries to overhaul a complex but generous pensions system.
Labour unions and the government are at loggerheads over the changes, catching frustrated travelers and weary commuters in the middle. The strikes have affected transportation more than any other sector, and have been especially acute in Paris.
The government was further thrown off balance this week by the resignation of Jean-Paul Delevoye, Mr. Macron’s specially appointed pensions czar, who had to step down after an outcry over undeclared private-sector positions that he held while in government.
All eyes are now on the fast-approaching holiday weekend. Strikes could seriously test the mood of travelers across the country on what is normally an extremely busy period, as neither the government nor the protesters appear ready to blink first.
The French pension system has a redistributive, pay-as-you-go structure that functions like group insurance.
Workers and employers pay mandatory payroll taxes, known as social contributions, which are used to fund the pensions of retirees. Workers can also build up their own savings, but that does not constitute the backbone of the system, and private plans like 401(k)’s are uncommon.
Full benefits are earned after 41 years to 43 years of contributions, depending on when workers were born, but they can retire earlier than the legal age of 62 without full benefits.
Those are the general principles, at least: In practice, the system is complicated by 42 different pension programs.
Some plans are managed jointly by labor and employer unions, some directly by the French state, and others still by a mix. Some cover tiny segments of the population — employees of the Paris Opera, for instance — while others are vast: The biggest program, for salaried workers in the private sector, covers 80 percent of French retirees; the state is involved because it manages mandatory payroll contributions.
Some are tied to a company (like the national railway company), to a status (like civil servants) or to a profession (like lawyers). Because of demographic trends specific to each plan, some are running surpluses, while others are in deficit.
A worker who changes jobs might jump from plan to plan, paying into one and then into the other, meaning retirees often have multiple pensions.
And rules vary too. Some programs let workers retire early with a full pension, and not all plans calculate pensions the same way. In the private sector, for instance, plans are based on a worker’s 25 highest-earning years; in the public sector they’re based on the last six months, when workers are likely to be at the height of their earning power.
The pension system, like universal health care, is part of the generous welfare state that was created after World War II, and many in France are very attached to what they see as a hard-fought guarantee of high living standards for seniors.
In 2018, France had one of the highest income replacement ratios among European Union countries, at nearly 70 percent — excluding other social benefits — and one of the lowest rates of people 65 and older at risk of poverty, around 8 percent, according to Eurostat.
The OECD said in a report released this year that life expectancy after exiting the labor market was “5 years larger than in the OECD. on average.”
Philippe Martinez, the head of the CGT, one of the largest unions opposed to Mr. Macron’s plans, said France had “the best retirement system in the world” — a feeling shared by many.
But it comes at a cost. France spends roughly 14 percent of its gross domestic product on pensions, more than almost any European country.
The system’s dizzying complexity and alphabet soup of acronyms also make it difficult to understand what one is entitled to. Workers who arguably do the same job, like bus drivers in Paris and in Bordeaux, sometimes get different pensions.
“The current system provides effective social protection for current retirees, but it is overly complex,” the OECD. report said. “Differences across schemes fuel the suspicion that workers covered by other schemes might be better treated.”