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| France Pension Protests: Why Unions Are Up in Arms Against Macron | France Pension Protests: Why Unions Are Up in Arms Against Macron |
| (about 4 hours later) | |
| PARIS — Strikes disrupted travel across France for the 13th consecutive day on Tuesday, as labor unions angry over President Emmanuel Macron’s planned pension overhauls set off yet another day of demonstrations. | PARIS — Strikes disrupted travel across France for the 13th consecutive day on Tuesday, as labor unions angry over President Emmanuel Macron’s planned pension overhauls set off yet another day of demonstrations. |
| 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. | 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. | 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. |
| Labor 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. | Labor 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. | 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. | 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. |
| Here’s what you need to know about the debate. | Here’s what you need to know about the debate. |
| Everyone expects a state-guaranteed pension, but details vary. | Everyone expects a state-guaranteed pension, but details vary. |
| The French pension system has a redistributive, pay-as-you-go structure that functions like group insurance. | 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. | 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. | 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. | 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 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. | 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. | 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. | 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. |
| Mostly, but some support simplifying it — as long as pensions don’t take a hit. | Mostly, but some support simplifying it — as long as pensions don’t take a hit. |
| 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. | 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. | 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 O.E.C.D. said in a report released this year that life expectancy after exiting the labor market was “5 years larger than in the O.E.C.D. on average.” | |
| Philippe Martinez, the head of the C.G.T., 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. | Philippe Martinez, the head of the C.G.T., 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. | 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 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 O.E.C.D. report said. “Differences across schemes fuel the suspicion that workers covered by other schemes might be better treated.” | “The current system provides effective social protection for current retirees, but it is overly complex,” the O.E.C.D. report said. “Differences across schemes fuel the suspicion that workers covered by other schemes might be better treated.” |
| The government wants a unified, point-based system; but it also wants the French to work longer. | The government wants a unified, point-based system; but it also wants the French to work longer. |
| Mr. Macron does not want to change the legal retirement age or the system’s redistributive nature. Instead, he wants to unify the 42 different programs into a single system that uses points, which workers would accumulate and cash in upon retirement. | Mr. Macron does not want to change the legal retirement age or the system’s redistributive nature. Instead, he wants to unify the 42 different programs into a single system that uses points, which workers would accumulate and cash in upon retirement. |
| That will make the system clearer, fairer and better adapted to the modern labor market, Mr. Macron argues, because workers would be able to switch jobs without jumping between retirement programs and would receive points even for short periods of work that currently do not count toward pensions. | That will make the system clearer, fairer and better adapted to the modern labor market, Mr. Macron argues, because workers would be able to switch jobs without jumping between retirement programs and would receive points even for short periods of work that currently do not count toward pensions. |
| But Mr. Macron also wants to put the system on firmer financial footing. In 2018, it was facing a deficit of 2.9 billion euros, or about $3.2 billion, a figure that is projected to balloon to between €7.9 billion and €17.2 billion by 2025 if no action is taken. | But Mr. Macron also wants to put the system on firmer financial footing. In 2018, it was facing a deficit of 2.9 billion euros, or about $3.2 billion, a figure that is projected to balloon to between €7.9 billion and €17.2 billion by 2025 if no action is taken. |
| There is no imminent threat of collapse, and Mr. Macron’s critics — and even some of his allies — say he should put budgetary concerns on the back burner to focus on setting up the universal system. But the government says it would be “irresponsible” to overhaul the system without getting its finances in order. | There is no imminent threat of collapse, and Mr. Macron’s critics — and even some of his allies — say he should put budgetary concerns on the back burner to focus on setting up the universal system. But the government says it would be “irresponsible” to overhaul the system without getting its finances in order. |
| Mr. Macron wants to define a new age — separate from the legal age of retirement — that workers would have to reach to receive a full pension, with incentives and penalties encouraging people to work until then, if not longer. The government wants to set that limit, called the “pivot age” or “age of equilibrium,” at 64. | Mr. Macron wants to define a new age — separate from the legal age of retirement — that workers would have to reach to receive a full pension, with incentives and penalties encouraging people to work until then, if not longer. The government wants to set that limit, called the “pivot age” or “age of equilibrium,” at 64. |
| Prime Minister Édouard Philippe said last week that “we must, to preserve our pensions system, work a bit longer,” mainly because of increasing life expectancies. | Prime Minister Édouard Philippe said last week that “we must, to preserve our pensions system, work a bit longer,” mainly because of increasing life expectancies. |
| “Do you think for one second that the French would believe me if I said: ‘Here are some new rights that are going to cost money, and I’m not going to tell you how to pay for them,’” Mr. Philippe told TF1, referring to promised measures like a guaranteed minimum pension of €1,000. | “Do you think for one second that the French would believe me if I said: ‘Here are some new rights that are going to cost money, and I’m not going to tell you how to pay for them,’” Mr. Philippe told TF1, referring to promised measures like a guaranteed minimum pension of €1,000. |
| “To get their trust, one must say everything: the positives, and also the news that is a bit less popular,” he said. | “To get their trust, one must say everything: the positives, and also the news that is a bit less popular,” he said. |
| Labor unions oppose Mr. Macron’s proposals, but for various reasons. | Labor unions oppose Mr. Macron’s proposals, but for various reasons. |
| The strikers are angry at the prospect of losing benefits currently afforded to them by their various retirement schemes, and they are worried that their pensions will decrease significantly. | The strikers are angry at the prospect of losing benefits currently afforded to them by their various retirement schemes, and they are worried that their pensions will decrease significantly. |
| Railway workers, for example, do not want to lose the ability to retire early. Teachers, who generally have low incomes, are afraid of losing out if pensions are calculated over their entire career instead of the final six months. | Railway workers, for example, do not want to lose the ability to retire early. Teachers, who generally have low incomes, are afraid of losing out if pensions are calculated over their entire career instead of the final six months. |
| Some unions have vowed to strike through Christmas and beyond if the changes are not scrapped. | Some unions have vowed to strike through Christmas and beyond if the changes are not scrapped. |
| In a speech last week, Mr. Philippe, the prime minister, offered a few concessions, like delaying the changes and vowing that many older workers would not be affected. | In a speech last week, Mr. Philippe, the prime minister, offered a few concessions, like delaying the changes and vowing that many older workers would not be affected. |
| He also tried to reassure protesters, for instance by promising raises for teachers, insisting that the new system would take difficult working conditions into account, and vowing that the law would prevent the value of accumulated points from decreasing. | He also tried to reassure protesters, for instance by promising raises for teachers, insisting that the new system would take difficult working conditions into account, and vowing that the law would prevent the value of accumulated points from decreasing. |
| But Mr. Philippe failed to mollify the unions opposed to the proposals — and he angered more moderate ones that had been cautiously supportive of the overhaul. | But Mr. Philippe failed to mollify the unions opposed to the proposals — and he angered more moderate ones that had been cautiously supportive of the overhaul. |
| For instance, the C.F.D.T., one of France’s largest labor unions, supports a universal, point-based system but strongly opposes a “pivot age,” which it calls a thinly veiled effort to increase the effective age of retirement that would harm those who started working early. | For instance, the C.F.D.T., one of France’s largest labor unions, supports a universal, point-based system but strongly opposes a “pivot age,” which it calls a thinly veiled effort to increase the effective age of retirement that would harm those who started working early. |
| A lack of clarity — over the value of a point, for example — has also left some French people feeling that they are going to lose out, and the strikers insist that they are defending everyone’s pensions, not just their own. Polls show a majority of support for the strikers, and while they show widespread support for a unified system, many do not trust Mr. Macron to implement it. | A lack of clarity — over the value of a point, for example — has also left some French people feeling that they are going to lose out, and the strikers insist that they are defending everyone’s pensions, not just their own. Polls show a majority of support for the strikers, and while they show widespread support for a unified system, many do not trust Mr. Macron to implement it. |
| The government is expected to put legislation up for discussion in Parliament in February, and it hopes to get a vote by the summer. | The government is expected to put legislation up for discussion in Parliament in February, and it hopes to get a vote by the summer. |
| But there is no end in sight for the strikes. | But there is no end in sight for the strikes. |