France’s economy faces turmoil due to strikes over retirement age increase. Essential industries grind to a halt as violence and unrest dissuade tourism. This video explores economic arguments, lessons for other nations, and potential impact on the Eurozone.
We also spoke to Dr. Tomasz Michalski, a professor at HEC and a resident of Paris, living and working in the city while these events unfold. Our full interview with him is live on our Spotify podcast page now: 🎧 Listen at:
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Title: The Real Reason for France’s Pension Protests: Economics Explained in English
Introduction
France has been gripped by widespread and vehement protests against President Emmanuel Macron’s proposed pension reforms. Tens of thousands of people have taken to the streets, resulting in widespread disruptions across the country. While the media often portrays these protests as a simple resistance to change, the underlying reasons are deeply rooted in economic concerns. In this article, we will decode the economics behind these pension protests, shedding light on the real reasons motivating French citizens to voice their discontent.
Pension System: An Overview
To understand the protesters’ grievances, it is important to first grasp the structure of France’s pension system. The existing system, known as the “pay-as-you-go” system, relies on the current workforce’s contributions to fund the pensions of retirees. In simple terms, today’s workers pay for the pensions of yesterday’s workers, with the expectation that tomorrow’s workers will do the same for them.
This system has served France well for decades, providing relatively stable retirement incomes for its citizens. However, a rapidly aging population, low birth rates, and increasing life expectancy have eroded the sustainability of this system. There is now a larger number of retirees relative to the working population, resulting in an increasing burden on the current workers to finance pensions.
Macron’s Proposal: The Universal Point-based System
President Macron’s proposed pension reform aims to replace the existing complex system with a universal point-based system. Under this system, each worker accumulates points based on their contributions throughout their career, with each point having a monetary value. Upon retirement, the total points accumulated would determine the pension amount received.
The theoretical attractiveness of this system lies in its simplicity, transparency, and the promise of fairer calculations. However, it is the financial implications that have been the main driver of discontent and protests.
Economic Concerns Giving Rise to Protests
1. Increased Retirement Age: Macron’s proposal focuses on raising the minimum retirement age from 62 to 64, acknowledging the demographic challenges and increasing life expectancy. However, with retirement age being a sensitive issue, many citizens are concerned about the feasibility and fairness of delaying retirement, particularly for those in physically demanding or stressful professions.
2. Reduced Pension Benefits: Critics argue that the new point-based system would lead to a reduction in pension benefits for most workers. Concerns arise from the potential changes in the calculation of pension points, which could result in lower pensions for many compared to the existing system. This fear is particularly pronounced for those in low-paying jobs, as their lifetime contributions would be less likely to generate a decent pension.
3. Uncertain Transition Period: The reform proposals lack clarity on the transition period, leaving workers unsure about how the changes would affect them specifically. The uncertainty regarding the transfer of existing pension rights, early retirement options, and accumulated points fuels anxiety and insecurity among workers.
4. Privatization Concerns: Critics argue that the new pension system could serve as a precursor to further privatization of the pension system. This fear stems from the fact that the new system offers opportunities for private entities to manage the pension funds, raising concerns about profit motives, potential for inequality, and vulnerability to market fluctuations.
Conclusion
While the media often paints the French pension protests as mere resistance to change, the underlying reasons reflect deep-rooted economic concerns regarding retirement security, fairness, and uncertainty. President Macron’s proposed point-based system is not inherently flawed, but it is the way it has been communicated and the potential implications that have fueled the discontent. A genuine dialogue between stakeholders and an acknowledgment of the valid economic concerns can help bridge the gap and ensure a sustainable and equitable pension system for all French citizens.
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Let's wake up!!
This story that the State (whatever it may be in the West) does not have the financial capacity to pay for the reforms, because of the increase in the longevity of the population, is a gigantic fraud, to (once again) deceive the population. Why? Because in reality there are people who constitute the plutocracy, a small group of people, who are the biggest shareholders of almost all the multinationals in the West, who are the ones who govern, in fact, the "democratic" countries of the West, and who have
as clients, the oligarchs of these countries, who in turn control the political elite of these countries (you may have heard that they are the ones who financially "support" these politicians, at the time of the elections – they contribute to the campaigns) This is an old system created by the ancient Romans. These plutocrats, since the 70's created several institutions to protect their interests (Trilateral-Bilderberg Club etc.)
And as they control politicians, they control populations and society. And so they found ways to divert the added value created by the work of society as a whole, to put it in their pockets.
And they have two main forms, the 1st consists of creating an economic crisis every 10 years or so -At the end of these crises they divert all the financial gains generated by society. The second, which is already old, consists of putting it in their pocket the added value generated by technological developments generated by society – second industrial revolution, cyberbetics, office automation, internet, artificial intelligence, etc. All these technological developments are initially created by society institutions, universities, civil and military scientific institutes, etc. But then, these technological developments, as if by magic, will stop at private, multinational companies, such as Microsoft, Apple, Oracle, IBM, Pfizer, Nestlé, etc. Multinationals that have these so-called plutocrats as their largest shareholders.
This last form described here has already been used since the beginning of the industrial revolution, so you can see that if these added values had been put at the service of the well-being of the population and society as a whole instead of going to the pockets of the plutocrats , our populations had a fantastic quality of life. But instead of that, a plutocracy was created with these added values, which frankly only has a parasitic role. And so there is no money left for reforms. See if you wake up!!
Increasing the retirement age has nothing to do with counteracting people starting to work later, unlike what you say at roughly 11:20. The retirement age is the minimum, and to qualify for it you must contribute for smth like 43,5 years. 62-43.5 is basically 18. Meaning, to qualify for the minimum age before, you had to start working at 18.
This reform fucks over unskilled work while changing comparatively little for skilled workers who joined the labor force later. The typical french person undergoing tertiary studies joins the labor force by 21-23y old so to them the actual retirement age will be smth like 65-67, much more in line with the rest of the west and essentially unaffected by the change in minimum age
I think France has the same problem as all of our modern democracies. They’ve all stepped away from self reliance and individual responsibility. We all have these huge social safety, Ness, including my own country in United States, and we all have huge numbers of our population, which aren’t particularly productive. And we are all in a battle between the bakers in the takers For how to split up the economic pie. She’s a People of actually create the wealth get it or should people just by virtue of being a citizen of a country be entitled to a certain standard of living, healthcare, retirement, etc. As long as countries like France or other Democracies allow people to vote themselves money. They will continue to hit the front with bankruptcy and other financial problems. The only way a democracy such as a constitutional republic in my country can work is if people are self reliant and responsible for their own situation in life. Socialism in all of its forms cannot work, because in the end the makers, the people that are productive and create wealth, get tired of working, hard, making money, just to have it split up amongst the takers, the people who are either inapt, stupid, ignorant, or just plain lazy. So in a socialist country when the makers become disillusioned with the situation, they stop to produce. Once they stop producing nobody’s producing and large scale poverty in zoos. It’s been seen 100 times in the last century it never works, it never tan work, but for some reason people just keep thinking it will. And that is the problem with France and everybody else.
Capitalist are robbing people. The people of France are doing the right thing. The oligarcy must stop exploiting people.
BLM don't need a reason to riot, they just burned down Paris again last week for a dead criminal.
Russia’s economy is doing great right now so you’re wrong on that point.
The Demographic Bomb and youth with no skills
It started out a peaceful protest, but got hijacked by the same "troubled youth," who torched thousands of cars years ago. These migrants need to be repatriated to the hellholes they crawled out of.
Don't mess with people's pentions!
No-one should be visiting France, anyway.
No wonder with open borders.
Jobs are what finances the retirement pensions. Raising the age of retirement doesn't create jobs thus doesn't really increase the financing. It does however shift people from retirement pension to unemployment benefit, where it's more morally acceptable to just stop paying them. The reform is unpopular because it doesn't solve anything.
8:40 you mean "FREEDOM"
It just shows the classic mentality of the age we live in. If you can shove a problem forward without actually dealing with it, you do it. At the expense of your children's and their children's futures, maybe, but most people willingly ignore that part of the equation. Of course raising payroll taxes is seen as a favorable solution. Let your kids flip the bill for your pension. So boomers, as usual, end up on top; already paid relatively low taxes during their working years, and as a generation they get to pull more money out of the pot than they put in, during their retirement years. God forbid they don't end up with the biggest slice of the pie for once, huh?
tl;dr Because all governments' pensions are Pyrmid schemes.
Please please learn how to end a spoken word without drawing it out unnaturally and on an 'up'.
There is a very easy solution to all these problems. Just tax the rich more.
People are living longer so they think to increase the pension age
Could you do an eppisode on weather a revenue tax on businesses could help?