France has been experiencing massive protest and strikes over the French government’s newly proposed pension reforms which increase the retirement age from 62 to 64 years. More than 1 million people have taken to the streets across the country to oppose the changes. Protests have spread across more than 200 towns and cities in France. President Emmanuel Macron used his special constitution power to rise the retirement age from 62 to 64 years which means there will be two years increase in the number of years that the workers must contribute to be eligible for a pension.
Many Older workers and retirees are particularly concerned about the changes as that would have a significant impact on their ability to retire and enjoy their twilight years. Younger workers and students have also joined the protests as they fear that the changes will make it even harder for them to find work and establish themselves in their carriers
It’s a very complex and controversial issue. Whether paying to older people puts a burden on young people joining the workforce on one hand and providing pension benefits to older people is a significant cost for government. It’s true that younger workers may need to contribute more to the system in order to support those benefits but then it is important to understand that pension benefits are a crucial component of the social safety net it provides to the older people with Financial Security and dignity during their retirement age. Without pension benefits, many older workers will have no other choice but to work in order to support their living. This will take up the jobs and opportunities that might otherwise be available for younger workers .Younger workers will also become older workers and even will have to rely on the pension system for their own financial security It is important to recognize the value of pension benefits .
62 to 64 mean that many older workers and retirees will have to work longer and contribute more to the pension system. Imagine working two extra years after you had planned to retire. The pension contribution before the retirement is one more problem when you increase retirement age promotion would be greatly affected especially in the government services because people above you will get an extension and the young works will have to work more years in the same rank or position. This is also one reason for the upraising in the streets of France.
Why is the French Government doing this? There are two main reasons. Economic downturn caused by the pandemic is one and the second one is more important. As a part of NATO alliance France had no other option but to join the American Bandwagon and go in full swing against Russia. It banned Russian energy imports and also providing money and much equipment to Ukraine. This has lead to inflation and that is the reason French economy is experiencing shrinkage. The result, French Treasury is facing a massive financial crunch and that is what led to the passing of new pension bill by increasing the retirement age.
Pension funds are a large pool of money that is set aside to provide retirement benefits to the employees. The fund management invests Pension funds in a range of financial assets such as stocks, bonds and real estate and other alternative investments as private equity. The Investment decision made by the Pension funds in the stock markets is subject to market risk and there is not much transparency in decision making. Pension is a social security. It is not meant to make someone rich. It should be seen as Investment plan, to protect the interest of the retired workers rather than gambling with that money.
These struggles have garnered lot of support from people of France. They support the Unions despite the disruption in their normal walk of life. There is a strong sentiment that the government could have augmented money by taxing the super rich more.
It is not a burden on any government to support the pension system. Therefore the French Working Class cutting across all the sectors is on war path. There are lessons for the Indian working class from French agitations. The workers-farmers and all other working class should come together to fight to protect their hard earned rights.