The government of Prime Minister Elisabeth Borne finally decided to use article 49 paragraph 3 of the Constitution to pass its pension reform. The question now is to know what will be the continuation of the mobilization once morest the text following this passage in force while the days of strikes and demonstrations have multiplied since the beginning of the year.
Remember that the priority objective of this parametric reform project, which the French are opposed by a majority, is to achieve nearly 18 billion euros in savings. Savings that will be dedicated to the financial balancing of the system, to the financing of new protections, but also to send a signal to our European partners and to the financial markets at a time when the sustainability of French sovereign debt is worrying.
Many things have been written regarding this project, from its financing to the question of the revaluation of small pensions, or even the development of end-of-careers, the employment of seniors and the consideration of hardship.
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However, it seems to us that few voices have really questioned the legitimacy of a reform project from the angle of the fair intergenerational distribution of efforts. It is this light that we intend to shed here.
Demographic problem
Some might, indeed, consider that our pay-as-you-go pension system has become, in many respects, anachronistic. To ensure its proper functioning, and its balance, it is necessary that at constant contributions, the ratio between the number of active people and the number of retirees does not fall below a certain threshold. If this is the case, tax increases aside, the balance can only be achieved by increasing contributions, increasing working hours (which allows both to save additional contributions and shifting the age at which a pension will be received), or a mix of these different levers.
Read also: Pensions: longer working hours, the least bad solution?
However, the problem of our pay-as-you-go system is first and foremost demographic. Since 2015, the French population aged 60 and over has exceeded that under 20. It was even in 2014 that this shift took place if we consider only metropolitan France. Like what we observe in many Western countries, France is ageing.
In such a context, it is therefore hardly surprising to note that the ratio between working people and retirees is melting like snow in the sun. The latest report from the Pensions Orientation Council (COR) establishes that this ratio will continue to decline in the coming decades, due to longer life expectancy. It would thus stand at 1.5 in 2040, and 1.3 in 2070. According to the National Institute of Statistics and Economic Studies (Insee), it has already fallen from 2.02 to 1.67 between 2004 and 2020. To get an idea of the extent of the problem, this ratio was 4.69 in 1960!
Admittedly, this would be of little consequence if, at the same time, working people benefited on average from a significantly higher standard of living than their elders. However, despite the trompe-l’oeil of “small pensions” (which might very well be the subject of a specific revaluation), it is quite the opposite that is happening! In France, INSEE has thus highlighted that the standard of living of a retiree is on average higher than that of an active person, in particular because of smaller households in terms of the number of occupants, but also of an already constituted real estate portfolio and a much lower level of indebtedness.
Strange configuration that France shares with only two other countries in the world: Luxembourg and Israel!
Advantage: boomers
In our country, the baby-boom generation appears, in many respects, to be rather advantaged. Demography was favorable to it insofar as it made less of an effort to contribute, at a time when, as we have seen, there were fewer seniors in retirement and enjoyed a shorter life expectancy.
It is estimated that retirees today receive twice as much as they contributed during their period of activity. This situation also allowed boomers – as it is now customary to call them – to receive on average an inheritance earlier in their life course, at an age when there is still time to invest, as highlighted by the work of Thomas Piketty taken up by the Council economic analysis.
Piketty.pse.ens.fr
In view of this situation, it seems legitimate to wonder regarding the social justice, claimed by the President of the Republic himself, of a reform project which asks relatively poorer and precarious workers to finance a system of pensions for the benefit of people on average who are better off.
By sparing retirees, only a few months following having backpedaled on the question of the revaluation of the rate of general social contribution (CSG), the government seems – it is true – more guided by the political agenda than by the search for fairness . There is no doubt that the preponderant electoral weight of the over 60s might have had some influence on the decisions made by the government.
neglected youth
The assets of today and tomorrow seem, in fact, to be the great forgotten ones of the government. At a time when our Nation must prepare to meet the historic challenges of this century, our leaders should nevertheless be alarmed by this youth and these living forces who, beyond deserting the ballot box, are exhausted on all fronts for many years and to which all adaptation efforts seem to be systematically called for.
It first had to adapt, willy-nilly, to globalization, to mad financialization and latent cultural dilution. In the shadow of this “global village” which will have brought out its champions, there is also a procession of relocations and new demands for competitiveness or productivity which have left many “losers of the globalisation”, to use the words of labor economist Dominique Redor.
He then had to adapt to the digitization of society and production tools, accept “bullshit jobs”… at the risk of sometimes losing all motivation (as revealed by the phenomenon of “quiet quitting” (silent resignation )), and right down to the very meaning of work. A job that is increasingly carried out remotely and in a precarious way as access to city centers has become financially inaccessible, and the diploma no longer protects.
Read also: “Quiet quitting”: beyond the buzz, what “silent resignations” reveal
It is also to the working people of today and those of tomorrow that previous generations have left abysmal economic and environmental debts to be met. Should we see a cause and effect relationship when this active youth, in the end, no longer finds the resources, the meaning or the desire to have children? Seven consecutive years of decline in births in a rich country: isn’t this the major signal of a crisis of confidence which plagues a Nation which, by dint of spending its time looking in the rear view mirror, burdens its future?
Make no mistake regarding it though. The youth and working class of this country, who have often let things happen without them out of relative disinterest, have their share of responsibility in the current situation. When they still express themselves, they also despair of ever being really heard, whether on socio-economic issues or regarding the environment. And while some are resigned, others are on the contrary – in France and around the world – falling into more radical modes of protest.
On the balance sheet, the sequence will remain as a new episode in a long series which ended up giving birth to an inverted solidarity machine. A dysfunctional machine where today’s and tomorrow’s working people, on average poorer and more precarious, are called upon to settle the economic, social and environmental balance sheet of a generation, now retired, which, like the cicada of the fable, was somewhat conspicuous by its inability to foresee.
