The strikes and demonstrations that have brought France to a near-halt are provoking the usual patronizing commentaries across the Channel and on my side of the Atlantic. Those pampered French workers, not to mention schoolkids, are at it again, raising hell just because sensible President Sarkozy points out that the French pension system is simply not affordable and the retirement age must be raised from 60 to 62. It’s time for a reality check, of the sort just being imposed by Chancellor Osborne, proposing to carve $128 billion out of spending and entitlements.
Across Europe, the slash-and-burn crowd is in full cry, calling for tighter belts — though not to any stringent degree those ample ones circling the portly tums of the richer classes. Cheering them on are the neoliberals here in the U.S., urging similar retrenchment, starting with Social Security “reform” — a higher retirement age and reduced pensions. The mainstream press here, starting with The New York Times, has been florid with homages to Osborne’s estimable zeal to pare back the welfare state “excesses” of 60 years.
Such portrayals of the French pension system are grotesquely misleading. Diana Johnstone, an American journalist who has lived in Paris for more than three decades, laid out clearly on Thursday on the CounterPunch website what is actually at stake in Sarkozy’s proposals:
“The retirement issue is far more complex than ‘the age of retirement.’ The legal age of retirement means the age at which one may retire. But the pension depends on the number of years worked, or to be more precise, on the number of cotisations (payments) into the joint pension scheme. On the grounds of ‘saving the system from bankruptcy,’ the government is gradually raising the number of years of cotisations from 40 to 43 years, with indications that this will be stretched out further in the future.
“As education is prolonged, and employment begins later, to get a full pension most people will have to work until 65 or 67. A ‘full pension’ comes to about 40 percent of wages at the time of retirement. But even so, that may not be possible. Full-time jobs are harder and harder to get, and employers do not necessarily want to retain older employees. Or the enterprise goes out of business and the 58-year old employee finds himself permanently out of work. It is becoming harder and harder to work full time in a salaried job for over 40 years, however much one may want to. Thus in practice, the Sarkozy-Woerth reform simply means reducing pensions.”
Johnstone points out that the schoolkids on the streets are not there for the thrill of trashing a car or throwing a rock at the cops. They are very aware of the increasing difficulty of building a career. The trend is for qualified personnel to enter the workforce later and later, having spent years getting an education. With the difficulty of finding a stable full-time job, many depend on their parents until age 30. It is simple arithmetic to see that in this case, there will be no full retirement until after age 70.
Those supposedly pampered French workers actually achieve productivity levels that are among the highest in the world — higher than that of the Germans, for example. France also has a high birthrate, unlike its dismal levels in the 1930s when austerity programs of the sort proposed by Sarkozy produced a population dwindling at disastrous speed. So the wealth produced by high productivity should be adequate to maintain pension levels.
“Should be” are the operative words here. As in the U.S., the French workers don’t enjoy the rewards of their high productivity in the form of higher wages. Their pay packets stagnate while the profits from increased productivity are siphoned off into the financial sector. Meanwhile, in order to maintain the high profits drained by the financial sector and avoid paying higher wages, the jobs vanish overseas, and the likelihood of getting anything close to a full pension dwindles.
The bankers’ agenda on both sides of the Atlantic is the same: Cut the living standards of ordinary working people; roll back the clock to the 1920s, a decade that culminated in disaster, as the bankers insisted that the only way out of the Depression was fiercer austerity — the Osborne/Sarkozy strategy. It took mass unemployment and the ideas of John Maynard Keynes to recover from that madness. Now the Keynesian recipe is being shredded.
As the former banker and economist Michael Hudson writes, “At issue are proposals to drastically change the laws and structure of how European society will function for the next generation. …
“It is a purely vicious attempt to reverse Europe’s Progressive Era social democratic reforms achieved over the past century. Europe is to be turned into a banana republic by taxing labor — not finance, insurance or real estate.
Governments are to impose heavier employment and sales taxes while cutting back pensions and other public spending.”
Contrast the popular eruptions across France against Sarkozy with the sedate atmosphere in the U.K. after Osborne outlined a brutal agenda that will lead to 500,000 public sector job losses, pensions kicking in only at a higher retirement age of around 66, plus higher pension contributions and pain that will strike most fiercely at the poor.
Contrary to widespread belief here, levels of unionization in France are not high. But the French have a radical tradition stretching back across more than two centuries to their great revolution. Working people everywhere should raise three lusty cheers for the French strikers and their allies.
Alexander Cockburn is co-editor with Jeffrey St. Clair of the muckraking newsletter CounterPunch. He is also co-author of the new book “Dime’s Worth of Difference: Beyond the Lesser of Two Evils,” available through www.counterpunch.com.
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