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/MAY DAY/FRANCE: The Spectre of 2020 Haunts Powerful Unions
By Julio Godoy
PARIS, April 29 (IPS) - The Labour Day comes two weeks too early for French
unions. They are in the midst of rallying workers against a government plan
to deprive them of their well-deserved comfort in old age.
Opposition to the planned 'reform' will also be the central issue on May
1 - ahead of what is scheduled to be "a day of action, of protests, and of
strikes, to force the government to modify its choices on the issue of
pensions".
The big unions mobilising workers for May 13 are: the General
Confederation of Workers (CGT), close to the Communist Party; the Working
Force (FO), also of leftist affiliation; and the centrist French Democratic
Confederation of Workers (CFDT).
Smaller organisations - the General Confederation of Christian workers
(CFTC), the Unified Federation of Unions (FSU) that represents medium-level
state employees, and the National Federation of Autonomous Unions (UNSA)
which also associates police agents, teachers, and other state workers - are
also contributing their bit to make May 13 a success.
The unions argue the government's reform plan is "exclusively dictated by
its will to reduce social and public spending".
Only the French workers' mobilisation will force the government to
retract, say the unions. "Therefore, we call for a huge protest beyond our
march on Labour Day."
The rationale behind cutting workers' pensions, according to labour
minister Francois Fillon, is that without reform the present system would
crumble in a few years.
Fillon's 'road map' includes a gradual increase in the state employees'
working years from the present 37.5 to 40 by 2008 as a pre-requisite for
claiming full pension. By 2020, an average French employee will have to work
for 42 years to be eligible for the state pension.
This would be two years more than the employees in private enterprises
are presently required to work to have a right to full pension after
retirement.
Fillon is also planning to introduce what he calls "a premium" for later
retirement. If a French worker retires at the age of 63, instead of 60
today, he or she would receive a bonus of three percent with the pension.
The French labour minister is also proposing a corresponding penalty for
workers who would prefer to take an earlier retirement: they will forego an
equivalent of roughly one percent per year of their total pension.
Event though Fillon claims that the reform plans would go along without
reducing the average pension levels, he is preparing the introduction of
private pension funds, similar to those already in place in the United
States and Britain.
Trade unions remain unimpressed by Fillon's assurances and argue that the
government's reform plans camouflage a substantial drop in pensions - of up
to 30 percent.
Bernard Thibault, general secretary of the CGT, the largest French union
federation, said: "Fillon's plans imply that 16 years from now the
government workers will receive pensions that are 20 percent lower than
today."
Worst hit would be the workers of private enterprises and women. They
would have to cope with a reduction of up to 30 percent.
Thibault has calculated that an average state employee retiring this
year, would receive a monthly pension of some 1,056 dollars. "This pension
will go down to 1,040 dollars in five years and to 855 dollars in the year
2020," Thibault explained.
Following the government plans, a private sector worker would receive a
monthly pension of 1,080 dollars this year, of 995 dollars in five years,
and of only 698 dollars in the year 2020.
The deterioration of pensions would be even worse for female workers,
says Thibault. If the reform plans come into force, an average female
employee would receive a pension of 546 dollars this year, 493 in five years
and of only 450 dollars by the year 2020.
Unions and several economic and social analysts argue that the
demographic and economic basis of the government's reform plans is biased.
The most visible criticism comes from the Orientation Council on Pensions
(COR), the independent board that advised the government on the issue.
According to the COR, the government's reform plan can succeed only if -
by some miracle - the present 10 percent jobless rate is replaced by full
employment within the next 7 years.
The COR fears dire consequences for the economy. The reform plan would
usher in a deficit of some 10 billion dollars in the state fund for
unemployment.
Independent economists also claim that the urgency to reform the pension
system has been artificially created by an alarmist analysis of the French
demographic and economic development for the period from 2005 to 2050.
The reform of the French pension system has been the subject of several
contradictory reports since the early 1990s.
Right-wing governments in the past commissioned reports, which concluded
that the projected demographic development of the French society called for
a radical reform of the system.
This urgency was mainly explained by the forecasted growing disparity
between the number of people in age of retirement and the economically
active population.
A typical forecast of such alarming reports is that by the year 2040
there will be seven pensioners for every ten active workers. Today, the
relation is of four to ten. Following this estimation, the reports conclude
that the pension system must be reformed.
Pierre Concialdi, an economist at the Paris Institute for Social and
Economic Research, claims that such forecasts are not based on sound
analysis of demographic development, but aim to justify a political choice.
"Demography is a whimsical science," says Concialdi. An example of the
lack of precision of demographic analyses are two of the several French
reports on the issue.
"In the White Book of Pensions, published in 1991, the estimated rate of
people over 60 years of age to those between 20 and 59 was of 19 percent,"
Concialdi recalls. "In another report, published in 1995 by renowned
demography scientists, the rate had increased to 34 percent without any
explanation."
Both reports were used by right-wing governments in the past to begin
with reforming the state pension system.
The reforms, initiated in 1993, and pursued in 1995, led to huge workers'
protests in December that year, which paralysed the country for several
weeks. The protest forced the right-wing government of the time to withdraw
its plans to privatise pensions.
The government's defeat in the 1997 elections is widely attributed to the
French workers' protest vote against the reform plans.
The leftist coalition of Socialists, Green, and Communists, that ruled
France between 1997 and 2002, preferred to ignore the alarmist analysis of
the sustainability of the pensions, and refused to pursue the reform
initiated by its right wing predecessors. (END/2003)
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