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France

Can France really afford another strike?

Text by Eric Olander

Latest update : 2010-09-06

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.

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.

 

Date created : 2010-09-04

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