In Defense of Emmanuel Macron
Keeping the French pension system afloat requires pain now or more pain later.
Emmanuel Macron’s pension reform is neither surprising nor dramatic, yet he is suffering greatly for it. Why? People want to have their cake and… not pay for it. While the inexorable reality of scarcity has been abstracted by government-managed retirement schemes1, the reality remains that you can only consume what you—or somebody else—produces.
As summarized by Noemie Bisserbe’s in the Wall Street Journal, France’s pension system is confronted with demographic shifts that militate against the status quo. When the system was created in the ‘60s “France had more than four workers for every retiree,” almost two and a half (2.35) times greater than the “1.7 [workers per retiree] in 2020.” The predictable consequence of France’s graying population is the program’s increased deficit “of €1.8 billion in 2023,” with a projected increase “to €10.7 billion in 2025 and €21.2 billion in 2035.” Given the French people’s uncompromising opposition to tax hikes, and Macron’s acquiescence thereto, the national deficit increased to “5% of gross domestic product last year… [2 percentage points higher than] the European Union’s 3% target.” Unable to increase revenues, Macron has increased the retirement age from 62 to 64 to reduce expenditures in a desperate bid to maintain the solvency of France’s generous2 pension system.
How has Macron been thanked for his valiant—if you’re somebody who believes in such entitlement programs3—efforts? Strikes, protests, arson—typical French behavior (I jest here, sorta4)—and a vote of no-confidence survived by a mere nine votes. The French people’s belligerence is rather perplexing provided that Macron explicitly ran on a platform of pension reform. He was thwarted in a similar scheme in 2019 and then “re-elected last spring after campaigning on a pledge to raise the age of retirement.” If the French want to maintain their so-improperly-called “right to happiness,” as declared by their socialist President François Mitterrand (1981-1995), founder of the Ministry of Free Time5, they should be grateful to Emmanuel Macron for attemping to salvage the program from insolvency. You wouldn’t know it from the public outrage, but Macron’s 2-year retirement age increase is a decidedly tepid, temporary stopgap:
Some economists say Mr. Macron’s proposed changes won’t keep the system afloat for long. If the legislation passes, it will provide a spell of fiscal relief before the system returns to insolvency after 2030, said Frédéric Bizard, an economics professor at Paris-based ESCP business school.6
After the havoc wrought in response to Macron’s advertised, incremental, and limited reforms, one fears what the French will do to their beautiful capital when serious changes have to be made to their welfare state. I recommend visiting the city of love before its residents burn it to the ground sometime shortly after 2030.
France is not exceptional; see America’s Social Security system.
France’s pension system offers “a net pension replacement rate… of 74%, according to the OECD. That’s higher than the organization’s average of 62%.”
I am not one such person.
To be completely candid, I’m only 30% kidding here. Max.
Are you kidding me? Did Mitterrand not read 1984? I mean, this is comically absurd.
Noemie Bisserbe, “The Party Is Ending for French Retirees”, The Wall Street Journal, March 14, 2023.