Sunday, October 24, 2010
Posted by Raised By Republicans at 12:41 PM
Tuesday, October 19, 2010
French President Sarkozy wants to raise the minimum retirement age from 60 to 62 and the age for receiving full state pensions from 65 to 67. This would be gradually introduced, adding 4 months to the requirement each year, reaching full implementation by 2018. The reforms he proposes are quite modest and much needed. The government has been borrowing from banks to make pension payments and now, with debt rising, the French government can no longer postpone reforms. Sarkozy, I think is correct to push reform now. With the Greek crisis, attention is mounting about national debt across Europe. The French system is actually quite flexible when it comes to retirement.
In general, the mandatory retirement age in France is 65. However, under current rules, one can opt for retirement at age 60 so long as one has worked 41-42 years. (Civil servants have to have 40 years of service). In 2008, the law changed so that mandatory retirement age is 70. So once one hits 60, retirement is an option. But one can also opt to work longer. In some professions, there are “special retirement regimes” such as public transport, mining, bus driving, etc. where retirement can start at 50-55. Then there are the early retirement programs. For instance, women earn two years for each child. These will remain unaffected by Sarkozy’s reform.
Students are protesting with the workers because they see the increase in age as a threat to their employment. Unemployment among the young is notoriously high, 23% among 15-24 year-olds. So they would like those at the top to cycle out so that they can cycle in.
The French have tinkered with the system for years. In 1981, Mitterrand actually reduced the mandatory retirement age from 65 to 60, something Sarkozy is now criticizing, saying that it postponed the inevitable, making it harder to reform now. In 1993, the government increased the number of years required for private sector employees to work from 37.5 to 40. It wasn’t until 2003 that the government succeeded in extending public sector employees to 40 years.
Currently only 12-15% of French workers between the ages of 60-65 are working (20% in the US). The average age of retirement age in France is 59 years (64 in the US). For those of us born in the US after 1959, the age for full benefits is 67. This change was made with little notice back in 1983. The earliest that Americans can start receiving benefits is 62. Civil servants are eligible for retirement after 30 years of service. There is no mandatory retirement age in America. (For a nice round up on retirement ages in OECD, visit The Society for Human Resources Management page.)
Many French workers received 50-60% of their incomes under state run programs, plus there are the company pensions and union benefits. Civil servants receive up to 75% of their final salary for life. Retirement benefits for American civil servants are based on the last 3 years of their income. In the current economy, this is encouraging many people to stay in the workforce longer so as to increase their last 3 years of income, and thus their benefits.
French students are blockading refineries. They may be arrested for this because under French law, preventing those who wish to from doing is punishable with prison time and possible civil penalties. Some 20 of 219 refinery are blocked. 4000 gas stations of 12,500 are out of gas. Distributors are pooling their reserves for distribution. In the end, the French Senate will approve the reform and the French economy will have taken a hit as a result of fuel shortages. So given the options for protest movements, I'll keep the whacky Tea Partiers.
Posted by USWest at 11:00 AM
Monday, October 11, 2010
I thought I'd share this rather interesting take on the "Tea Partiers" from the New York Times Book Review .
All protest movements are the same at their base- they are often against some notion of "elitism" and they are often driven by some sense of marginalization. I didn't know much about the "Beats", so I found this article rather interesting.
Posted by USWest at 9:22 AM