The Costs of Pension Reform


We at Reason have been rightly warning the world of the looming pension obligation crisis facing American governments. The French government, trying some minor reform around the edges of their own coming pension crisis, runs into a sudden and severe strike crisis. The UK Guardian with the latest:

France's strikes are costing the national economy up to €400m (£355m) each day, the French finance minister said today, as workers continued to block waste incinerators in protest against a plan to raise the retirement age to 62.

Almost 9,000 tonnes of rotting piles of rubbish are becoming a health hazard in Marseille, which has been hit hard on land and at sea. Striking dockers at France's largest port are intermittently blocking ships trying to unload fuel.

Twelve striking refineries have been shut for nearly two weeks, but the protest movement appeared to weaken yesterday after workers at three refineries voted to end their walkout…

President Nicolas Sarkozy has stood firm throughout the week-long protest, insisting the reform is necessary to ensure funds for future generations as life expectancy increases and the nation's debt soars.

The bill to overhaul France's pension plan is to be definitively voted on this week by the two houses of parliament, probably by Wednesday….

Strikers were counting on derailing the measure before it is signed into law after this week's final voting.

Rubbish and petrol are critical weapons for the strikers, who say the reform is unjust. Besides raising the minimum retirement age to 62, it increases the age when full retirement benefits can be accessed from 65 to 67.

It was only in 1982 that French employees won the right to retire at 60, and since then it has been considered a well-earned right. "We aren't going to work on the docks until 65. It's just not possible," said Frederic Chabert, 47, at a Marseille port.

But having the state pay you not to work for the rest of your life might not be either, mon chere Frederic. Plus ca change and things still stay the same, as the Franglish say: a 2003 attempt to lighten the French government's pension load via increasing the number of years you had to be a state functionary to get full pension eternally also lead to angry street strikes and riots, also including a garbage-riddled Marseilles, and Reason's Matt Welch wrote about it.