The strikes and demonstrations that have brought France to a near-halt are provoking the usual patronizing commentaries in the United States and United Kingdom. Those pampered French workers, not to mention school kids, are at it again, raising hell just because sensible President Sarkozy points out that the French pension system is simply not affordable and the retirement age must be raised from 60 to 62. It’s time for a reality check, of the sort just being imposed by U.K. Chancellor of the Exchequer, George Osborne, proposing to carve $128 billion, out of the budget – more than 4 per cent of GDP.
Across Europe the slash-and-burn crowd are in full cry, calling for tighter belts – though not to any stringent degree for those ample ones circling the portly tummies of the richer classes. Cheering them on are the neoliberals here in the U.S.A., urging similar retrenchment, starting with Social Security “reform” – a higher retirement age and reduced pensions. The mainstream press here, starting with the New York Times has been florid with homages to Osborne’s estimable zeal to pare back the welfare state “excesses” of 60 years.
Such portrayals of the French pension system are grotesquely misleading. Diana Johnstone, an American journalist who has lived in Paris for over three decades, has been unique in laying out clearly on our CounterPunch.org website on October 21 what is actually at stake in Sarkozy’s proposals:
“The retirement issue is far more complex than ‘the age of retirement.’ The legal age of retirement means the age at which one may retire. But the pension depends on the number of years worked, or, to be more precise, on the number of cotisations (payments) into the joint pension scheme. On the grounds of ‘saving the system from bankruptcy,’ the government is gradually raising the number of years of cotisations from 40 to 43 years, with indications that this will be stretched out further in the future.
“As education is prolonged, and employment begins later, to get a full pension most people will have to work until 65 or 67. A ‘full pension’ comes to about 40 per cent of wages at the time of retirement. But even so, that may not be possible. Full-time jobs are harder and harder to get, and employers do not necessarily want to retain older employees. Or, the enterprise goes out of business and the 58-year-old employee finds himself permanently out of work. It is becoming harder and harder to work full time in a salaried job for over 40 years, however much one may want to. Thus, in practice, the Sarkozy-Woerth reform simply means reducing pensions.” (Eric Woerth is the French Labor minister.)
Johnstone points out that the school kids on the streets are not there for the thrill of trashing a car or throwing a rock at the cops. They are well aware of the increasing difficulty of building a career. The trend is for qualified personnel to enter the work force later and later, having spent years getting an education. With the difficulty of finding a stable, full-time job, many depend on their parents until age 30. It is simple arithmetic to see that, in this case, there will be no full retirement until after age 70.
Those supposedly pampered French workers actually achieve productivity levels that are among the highest in the world – higher than the Germans’, for example. France also has a high birthrate, unlike the dismal levels in France in the 1930s, when austerity programs of the sort proposed by Sarkozy produced a population dwindling at disastrous speed. So, the wealth produced by high productivity should be adequate to maintain pension levels.
“Should be” are the operative words here. As in the US, the French workers don’t enjoy the rewards of their high productivity in the form of higher wages. Their pay packets stagnate, while the profits from increased productivity are siphoned off into the financial sector. Meanwhile, in order to maintain the high profits drained by the financial sector, and avoid paying higher wages, the jobs vanish overseas, and the likelihood of getting anything close to a full pension dwindles.
The bankers’ agenda on both sides of the Atlantic is the same: cut the living standards of ordinary working people; roll back the clock to the 1920s, a decade which culminated in disaster, as the bankers insisted that the only way out of the Depression was fiercer austerity – the Osborne/Sarkozy strategy. It took mass unemployment and the ideas of Maynard Keynes to recover from that madness. Now, the Keynesian recipe is being shredded.
As Michael Hudson wrote here on our Counterpunch.org site at the start of October, “at issue are proposals to drastically change the laws and structure of how European society will function for the next generation. It is a purely vicious attempt to reverse Europe’s Progressive Era social democratic reforms achieved over the past century. Europe is to be turned into a banana republic by taxing labor – not finance, insurance, or real estate. Governments are to impose heavier employment and sales taxes while cutting back pensions and other public spending.”
In general, it seems the Euro zone has decided the underclass and retirees specifically are like a third world debtor who is required by the World Bank to tighten up. As Joe Paff emailed me from Paris this morning, whither he flew with his wife Karen from SFO Wednesday, without a hitch:
“the ruling class has decided to allow the underclass to hate Muslims as long as they retire a few years later.
“Merkel is the crucial player. She said multiculturalism has run aground and has foundered on the rock of True Religion – that Germany is fundamentally a Christian country and that the Mussulmen have to join up and shape up or get out. This requires forgiving Sarkozy for rounding up a village of gypsies and shipping them ‘home’ to Romania. The European Union had dropped its case against Sarkozy in appreciation for his raising the retirement age.”
Contrast the popular eruptions across France against Sarkozy with the sedate atmosphere in the UK after Osborne outlined a brutal agenda (presaged by New Labour, to be sure), which will lead to 500,000 public sector job losses, pensions kicking in only at a higher retirement age of 66, plus higher pension contributions, and pain which will strike most fiercely at the poor. Contrary to widespread belief here, levels of unionization in France are not high. But the French have a radical tradition stretching back across more than two centuries to their great revolution. Working people everywhere should raise three lusty cheers for the French strikers and their allies.
The Iron Ceiling
You can read more in our new newsletter about the grand British coalition, ranging from New Labour to the Conservative/Liberal Democrats, slashing at social spending. Susan Watkins, editor of New Left Review, offers our subscribers a trenchant report on Britain’s Tri-partisan Electoral Monolith and how the Slash-and-Burn Tory Coalition is picking up from where New Labour left off. Remind you of anything – like who’s now pushing for Social Security “reform” over on this side of the Atlantic? Welcome to the world of capital and its iron ceiling. Needless to say, as Susan describes, New Labour’s new leader, Ed Miliband, has already triumphantly deflated the rash hopes of those who thought this feeble fellow would represent any sort of shift to the left for New Labour.
Also in this terrific issue, released to subscribers this weekend, Larry Portis reports from France on the mass protests and the shriveling of Sarkozy. Peter Lee gives us an amazing piece on the awful tragedy of China’s Yellow River – from Chang Kai-shek’s breaching of the levees, to the vast, tragic drama of the Communists’ efforts to master the river with the San Men Xia Dam reservoir.
Alexander Cockburn can be reached at firstname.lastname@example.org.