They have one of the youngest retirement ages
French Protests – Governments around the world are raising the age at which citizens reach full retirement, meaning they receive full government benefits to support them in old age.
On January 19, 2023, citizens of France reacted with protests and strikes to the announcement of planned legislation that will require French citizens to work until 64, from 62 currently, to qualify for a full state pension. To help with the age increase, the French government added a roughly €100 euro increase in the minimum monthly pension, to €1,200, as well as exemptions for early retirement for those who start working at younger ages in arduous blue-collar jobs.
Striking workers included teachers and transport workers. More than 40% of primary school teachers and more than one-third of high school teachers went on strike, according to France’s education ministry. Train lines across France were severely disrupted and metro lines in Paris were hit by full or partial closures.
Eight of the biggest unions took part in protests against the pension reforms and have called for another day of action on January 31.
Fewer workers contributing
The French government has said that raising the retirement age is necessary in order to tackle a pension funding deficit, but the reforms have sparked French protests at a time when living costs are rising.
The government believes the only way to balance the pension system is for its citizens to work longer. Workers and employers pay mandatory payroll taxes that are used to fund state pensions, but the ratio of workers to retirees has dropped sharply as life expectancy has increased. In 2000, there were 2.1 workers paying into the system for every one retiree; that number fell to 1.7 in 2020.
Rising Number of Years in Retirement
Besides the shrinking number of workers paying into the system, retirees are living longer, thus collecting benefits for more years before death.
Across the continent, France recorded the highest number of expected years in retirement, at 23.5 years for men and 27.1 years for women. So, one could wonder whether the French Protests are justified.
In 1970, according to the Organisation for Economic Co-operation and Development (OECD), men in OECD countries were out of the labor market for an average of 12 years. By 2020, the number of years in retirement was 19.5 years.
Women’s life expectancy in the OECD was higher to begin with when they exited the labor market in 1970, at 16 years. This has increased to 23.8 years in 2020, while the gap between men and women has also widened slightly.
Companies shun older workers
Raising the retirement age is just one side of the coin; requiring people to work at older ages also requires companies be willing to hire them. French protests also relate to age discrimination in France already keeps millions of older job seekers out of work even before they reach the current retirement age.
In recent surveys by Indeed France, the country’s biggest online jobs board, a quarter of job applicants over 55 reported that employers told them they were too old to qualify for the position they were applying for. Four out of 10 employers surveyed said they didn’t intend to recruit anyone older than 45. And a quarter of companies acknowledged they would hire a younger person at a lower salary over an older candidate.
Comparing other countries
Raising the retirement age is not a new concept for many countries around the world,including in most OECD countries. In most European countries where OECD data is available, the current retirement age is 65 years or more. Many will be watching the French protests.
Among EU member states, Greece, Italy, Luxembourg and Slovenia have the lowest current retirement ages, with 62 years for both men and women.
In the U.S., the full retirement age is 66 if you were born between 1943 and 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.
The current retirement age in the UK for the state pension is currently 66 for both men and women. In recent years, the state pension age had seen modifications depending on when you were born. The state pension age for both men and women born after April 6, 1978, is now 68.
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