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Latest update: 06/09/2010
- France - Nicolas Sarkozy - strike - unions
Can France really afford another strike?
From the beaches to the streets, the French have ended one annual ritual – their month long holiday in August - just in time to begin another: striking.
By Eric Olander (text)
One week after the official end to France’s legendary month-long summer holiday season, with their sun tans fading and the children back in school, the country now braces for another of its quirky traditions: the national strike.
On Tuesday, September 7, France’s two largest labour unions have organised a walk-out that will, as in years past, inconvenience tens of millions of people. Public transportation, education and telecommunication services amongst other sectors are all expected to encounter considerable disruption.
The unions assert they are taking a bold stand against President Nicolas Sarkozy’s drive to reform the country’s indebted pension system. On Tuesday, Labour Minister Eric Woerth will propose increasing the retirement age from 60 to 62 to parliament.
For most of the rest of the world, particularly in many other industrialised countries, the ongoing pension debate in France and the accompanying strikes are viewed with a certain degree of puzzlement. In most industrial countries, the raising of the pension age has been difficult but no where near as contentious as in France. There is a widespread sense across large swathes of public opinion in these countries that the current painful fiscal realities demand that workers extend their careers before accessing pension benefits.
With more and more of what the world consumes now manufactured in developing countries, the world’s former industrial powers have transformed themselves into information-powered service economies. The once mighty industrial labour unions across the United States and Europe have all shrunk dramatically in recent decades. The OECD reports that in six out of the eight largest economies in the world, less than a third of their populations currently belong to a union. This explains, in part, why strikes, particularly on a national scale, have become infrequent, even rare, across most of the industrialised world.
That is, except here in France.
In a country where just 7.7% of the population is unionised, organised labour retains extraordinary clout within French society. However, with almost 80 percent of the country’s population under the age of 64, it is perplexing to many outsiders how the French will tolerate the inconvenience of these national strikes for causes that often do not have an immediate impact on the vast majority of the population.
The American media, in particular, marvels over France’s seemingly paradoxical contradictions. “France’s powerful unions are intent on keeping the country’s generous social safety nets in place,” according to a piece in Newsweek. “But the truth is that the economic downturn has accelerated France’s pension crisis exponentially, and the French way of life is more unsustainable than ever,” the article concluded.
The Wall Street Journal is even more decisive in its prescription for what President Sarkozy needs to do to prevail against the unions and the strike on Tuesday. Nothing. It argues that with such a small percentage of the population unionised - particularly among young people - that both time and demographics are on Sarkozy’s side.
With a budget deficit at 8 percent of GDP, nearly three times higher than the 3 percent limit set by the European Unon, the Journal notes that it is imperative that the President’s reform plan prevails: “without facing down opponents of pension overhaul, Mr. Sarkozy's austerity budget will count for little.”
It’s not that French workers earn a lot of money when they finally collect their pensions, opines Christopher Caldwell in the US conservative magazine The Weekly Standard. “The problem, rather, is the absurdly early ages at which French people retire,” he concludes. The average French man will collect almost 25 years of retirement benefits and the average women will receive benefits for 28 years. With only three workers per retiree (a number that will shrink to 1.5 in 2050), Caldwell boldly predicts that the days of the public sector supporting decades of retirement for pensioners will simply have come to an end.
For many observers outside of France, there is a surreal quality to the struggle between the president and the unions. How can a country that is running record deficits, with a shrinking working-age population all in the midst of a persistent global economic recession freeze the social benefits of an earlier era?
Yet, on Tuesday, as millions of commuters navigate their way around the inconveniences of another strike, one wonders if this simple question will even be considered.
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Comments (3)
One thing that is often
One thing that is often forgotten in the international coverage of the french strike is that a french worker has to pay his contributions for more than 40 years (one of the longest periods in Europe). You can retire at 60, but if you didn't pay your contribution for 40 (41,5 in 2020) years, you won't get a full pension. Those born in 1947 or before can get a full pension at 65 even if they don't have their fourty years, as long has they have paid their contribution for a minimum amount of quarters (if you are born after 1947, there is no difference between the minimal amount of quarters and the amount of quarters needed to get your full pension).
Another thing that isn't much touched upon is that the government is losing an enormous amount of money on dubious tax breaks : various reports( most notably by "La cour des comptes) have shown that the supplementary hours (one of Sarkozy main measures in 2007, cost 4 billion euro per year) have mainly benefited to executives and not poor workers (who were intented to be the main beneficiary of the measure),that the reduced VAT for catering (took effect in july 2009 estimated cost around 4 billion per year as well) has had barely noticables effects on bar and restaurant prices, and that the reduced taxes for selling long-term assets (took effect in 2007, cost : 20 billion in two years) has very limited effects compared to its cost. With just these three tax breaks, the state has lost around 28 billions in three years, wich is nearly the same amount of money as the total estimated debt of the french social security in 2010, which is around 30 billion, if the estimated annual debt of 10 billions in 2010 is confirmed. Since the crisis, the amount of social security debt has drastically increased because of the high unemployment rate and it a very worrying trend, but it would be manageable if the government didn't deprive itself a fortune with useless taxbreaks.
history
ever heard of 1792 ? that's why french strike !
Strikes and Pensions
I am half French and half American. Although I love the life in France I am unable to understand how companies and their employees tolerate the inconvenience caused by strikers. It amazes me that a country can be brought to a standstill in this day and age. Also, given the economic times, it is amazing that they are fighting against raising the retirement age to 62 by 2018. They are living in lalaland, if they think France can survive. This is the 21st century, times have changed.
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