At its core, this reform pushes back the minimum age of eligibility for retirement by two years. Today it is at sixty-two — with some exceptions — and would be raised to sixty-four. This is the main cost-saving component of the reform. More specifically, the calculation of an individual’s pension is a function of the duration of a worker’s career, which is today at forty-two years for the generation born in 1974 and after, and which was supposed to lengthen to forty-three years at a very slow pace — which the government again wants to accelerate. They’re doing two things: shifting the minimum retirement age and increasing the length of a worker’s contribution into the pension system. Over the next ten years, this reduces pension costs by carving out savings from people now on the cusp of retirement and then on all later generations.

The government’s line is, we want to save the system, it is in danger. But this is not very credible when you look at the big picture. In fact, the government has two objectives. The first is to change the structure of the labor market by pushing people to work more and thereby intensify competition among workers and apply downward pressure on wages. The other objective is the unwinding of certain state functions in the economy: lowering taxes, especially on companies, on the one hand, and lowering public spending on the other. Basically, the government is using pension reform as part of a broader supply-shock strategy.

The employment rate of French seniors is lower than elsewhere, in part because the retirement age is lower. But the government is only looking at half the story. It’s true that the last time the age was increased, people still in the workforce kept their job and worked two years longer. Generally, they don’t want to, or aren’t happy about it, but they do it. That being said, only half of those eligible are still employed at the age of sixty-one. The hope is to increase the number of late-career workers by roughly three hundred thousand, which is not a lot. What they’re willfully ignoring is that the people who are already unemployed or out of work at this point are going to stay out of work for even longer thanks to another shift in the retirement age — and therefore remain on unemployment benefits, welfare, and disability. When you look at the macroeconomic models, the benefits in terms of wealth creation are negligible: we’re talking about a 0.3 percent gain in GDP over ten years, which is not much.

It’s playing with words. In fact, the project doesn’t finance anything: it reduces expenses. Above all, they’re hoping to decrease the budgetary weight of pensions. To spruce things up, there are measures like a small increase in the minimum pension. On the other hand, the three hundred thousand additional people in the labor force will pay taxes and contributions, which reinforces money streams for things that do not go into pensions. But it’s not going to bring in much: essentially, it’s a decrease in public spending.

The first thing that must be said is that because of previous reforms, pension spending in France is no longer increasing and will even decrease in the coming years — even though we have more pensioners. We haven’t given previous reforms the time for their effects to be fully felt. As far as the upcoming deficit is concerned, spending is far from spiraling out of control. The government would just like to spend less on pensions.

€12 billion euros is a lot, but the €340 billion pension system is even larger. Finding €12 billion out of €340 billion over five years is not a big problem, really. There are twenty-seven million working people and seventeen million retirees, but here they want to put the deficit on just the people on the verge of retirement, who will bear the brunt of the reform in the immediate future. It’s far more brutal to put €12 billion on the backs of six million people.

This is written everywhere! The real reason for this reform and its timing is to balance out tax cuts. This is written in the budget and in commitments and communications with the European Union. Finance Minister Bruno Le Maire has been saying it for two years: my strategy is to lower spending in order to lower taxes. This, of course, would make the reform politically unacceptable, which is why the narrative has changed again in recent months, so that we now hear that the system is in financial danger, if we don’t do this, it will collapse. This is not true. There are deficits and there are funding issues, but there is no structural danger.

When we talk about pensions, we say that there are three financial levers: the size of pensions, the retirement age, and payroll contributions. The government has excluded any changes to the size of pensions of those already in retirement because pensioners are a key bloc in its electorate and because it has already been tried in the past and ended badly. This administration has excluded any talk of new revenue, of which the hardest to swallow for employees would be increased payroll contributions. The government is very wary of directly infringing on purchasing power. I did the math, and the worst-case scenario is that those at minimum wage would pay fourteen euro a month. For those earning the average salary at twice the minimum wage, it would amount to twenty-eight euro a month. It’s not nothing, but it doesn’t need to be a red line either.

There are plenty of other ways to find revenue, of course. First of all we could cancel tax cuts on companies, which have not proven to be very useful. When the state lowers or exempts employer payroll contributions, it needs to foot the bill itself. Doing away with these tax measures could bring in money. In any case, finding €12 billion is not unattainable. The tax cut on production cost €15 billion in 2021. In 2023 and 2024, it will be €8 billion!

They have two main profiles, really. First, people who started working very early. They will have to suck up working another year or even a year and a half if they are now on the verge of retirement. Likewise, women with children — who can now deduct eight trimesters [two years] per child — are set to be particularly affected.

The average length of retirement reached a peak for the generation born in 1950, before shortening when the retirement age was pushed back to sixty-two from sixty. Since then, the increase in the retirement age has been faster than gains in life expectancy, which is still increasing but very slowly. Even without this latest reform package, we’d have to wait for the 1980 generation to retire to return to the retirement duration which those born in 1950 had. This is a real setback. But if we go ahead with this reform, the gap will grow even wider.

The French welfare system is very big, and even this reform will not destroy it. The political economist Karl Polanyi argues that social protection partially demarketizes the income of labor, which capitalism seeks to commodify. This commodification is a violent process. By stabilizing lives and the economy, social protection ensures that a part of your income does not depend on your work. This describes the French system well, in the sense that welfare provisions secure wages from shocks. Emmanuel Macron’s goal is to convert social protection into an expense earned by work. The social protection system has long served to cushion the shocks of the market, but Macron is aiming to amplify those shocks to increase the incentives to work.

COVID-19, the cost-of-living crisis, and the horizon of low growth seemed to point to a new paradigm of social protection. This was very spectacular during the pandemic: we disconnected the labor market and guaranteed incomes, before gradually reconnecting things. Trade unions have aptly pointed out that we’ve also invented a new form of social security for corporations. [Thanks to state aid in the pandemic], there was a three-year lull in bankruptcies! We’ve seen that the state can be very interventionist, protecting the population during the pandemic, controlling prices, and shielding companies.

But we’re returning to Macron and Le Maire’s old economic strategy. With pension and unemployment reform, they’re betting on 1980s-style structural reforms to revive growth. But the question is: do we really believe that growth will come back? Is it still the model for how we should be making economic policy? Or do we have to do without growth?

The growth rate has not stopped falling. In France, between 2010 and 2018, GDP per capita decreased before returning to its prior level, and it hasn’t increased much since. This is hardly part of the government’s narrative. On the one hand, they want to return to growth. On the other hand, productivity keeps going down. We’re getting used to the idea that we are going to be paid less and less, and that if you want more money there’ll be less social protection and you’ll have to get it from wages. We’re no longer in a growth framework. We’re intensifying labor to cushion the decline in growth.

Yes, but it is not inherent to welfare policy as such. Technically, you don’t need growth to create social protection because it’s ultimately about distribution. But where it comes into play politically is that when you are in a period of growth, political conflict is theoretically more a question of sharing, allocating, and rearranging surplus. Wages increase, payroll contributions increase, and profits do too, so we discuss the balance. In stagnation, we share what exists, so these debates tend to become more radical — between profits and wages, and between wages and welfare contributions.

There is a real question for the Left, and one for which I don’t have the answer. Do we think that we are going to continue in the paradigm of sharing the expanding surplus of growth? Or should the Left enter a post-growth paradigm? This raises a number of questions as well, namely about taming capital. If capital wants to continue to increase profits without growth, it increases pressure on wages.

An important political shift took place under Macron’s predecessor François Hollande. If we look at the recent history of major social movements, they’ve mainly been over the labor code and pensions. [In the 1990s and 2000s], right-wing governments were able to engage in many political exchanges even with the more radical unions. Either they adjusted the reform in order to win enough support, or they understood that the price was too high politically and withdrew it.

Under Hollande and Macron, however, the stakes have gone up with reforms to the labor market and pensions. The government seems to take for granted that one or two million people will take to the streets. Macron, willfully or not, no longer seems to view the [traditionally moderate] CFDT union as an interlocutor. One gets the impression that there is something almost Thatcherite about this whole battle, with Macron wanting to prove that the unions are useless. The unions are back in their usual position, with strikes back on the table because they are very united.

We’ll see if there is a tack back to the traditional game of conflictual yet political exchange. Or if the government goes all the way, saying to itself: we are a minority government, we don’t have public opinion with us, we don’t have social partners at the table, but institutionally we can force it through.