
French Strike Aims to Save an Envied, but Convoluted, Approach to Pensions - koolba
https://www.nytimes.com/2019/12/06/world/europe/france-strike-pension-reform.html
======
rayiner
> The state would remain the main guarantor of pensions, continuing to provide
> workers with a safety net that is unheard-of in the United States, where
> about half of Americans have no access to retirement savings plans, and have
> little or nothing saved for retirement.

This is weasel-speak. It’s strictly true, only because it’s worded in a way to
exclude Social Security. Taken as a whole, US retirement safety net is more
generous than the OECD average: [https://www.etk.fi/en/the-pension-
system/international-compa...](https://www.etk.fi/en/the-pension-
system/international-comparison/pension-levels/)

The above is OECD data, far more reliable than random assertions in the NYT.

Public and private pensions replace on average 70% of pre-retirement income
for an average-income person, compared to 60% in France (and the OECD as a
whole). Great Britain and Germany are even less. (And of course, because US
incomes are higher to start with, US retirement income is even higher in
absolute terms.

The average French pension payment is $1,500 per month, about the same as the
average Social Security payment. But the average American worker gets about
that much again in occupational pension. (See the break-down in the chart
above, showing 100% of French pension coming from statutory pension, versus
half of US pension coming from statutory pension.)

~~~
user5994461
>>> The average French pension payment is $1,500 per month

For reference, French minimum wage is currently around 1200€ a month, with
most workers earning around 1200-2000 because salaries are heavily index to
the minimum.

It's one of the numerous issues with the pension system, pensions are
comparable to full salaries.

------
skitout
This article is misleading (full disclosure, I am French and did protest
against this last Thursday)

This article talk mainly about "special pensions" from the public with
privilege... For sure they will be the biggest losers and they are very vocal,
but the law and the protest is about much more than that...

This reform will impact everybody, people will have to work longer, possibly
to get a lower pension. Women are particularly exposed here.

Points system allows to more easily lower the value of the point... This has
been done in Sweden, and former French Minister Filon told that is one main
reason he likes the point system...

With this new reform, life expectancy are not taken into consideration : a
manager will live longer than an industrial worker on average ; with the same
share of contribution he will benefits from the system longer than "poor
people" in general

People working longer means... a little bit more unemployment and more health
expense for the workers (and more absenteeism for companies) as older worker
have more health problem. So you save some money for retirement at the expense
of other public spending...

Some economists, like Thomas Piketty are very vocal against this "law"...

It is a pity the NYT did such a poor job...

~~~
privateSFacct
SNCF (the rail company) is something like $45 Billion in debt?

Their conductors can retire using last 6 months of wages (vs avg wages)?

They can retire at 52? So payments will go to 82 (france has great life
expectancy) That's 30 YEARS of pension payments!

They are guaranteed a job for life?

They get free / low cost housing?

They get 28 regular paid days off an maybe another 22 or so RTT days? (ie, 50
paid days off before any sick / unpaid etc).

Not bad!

These articles always start with a description of how hard the job is. In
Europe they actually have great automated safety systems for trains and the
trainsets are in good condition. I realize it's a hard job, but boy - my heart
goes out to greyhound bus drivers in the US and many many other workers with
no where NEAR these benefits and frankly much harder jobs.

The special pension folks are in the streets to protect their special
pensions. Tie getting rid of the special pensions (which are often for the
elites) with an increase to basic pension and social safety net for all?

~~~
einpoklum
> SNCF is something like $45 Billion in debt?

The state owns and controls the SNCF, its expenses, subsidies and pricing. Its
debt is meaningless, in that the government decides how much in debt it is in.

> can retire using last 6 months of wages (vs avg wages)?

Retiring based on the status and position you've reached is common in many
workplaces/industries, in many countries.

> They are guaranteed a job for life?

Nobody is guaranteed a job for life. If you mean to say, that if they do their
job, the company can't fire them, then I don't see a problem with that.

> They get free / low cost housing?

They don't get free houses. Maybe they get free accommodations if their shifts
take them far away from home; which would be reasonable.

> They get 28 regular paid days off an maybe another 22 or so RTT days?

Read about RTT days here: [https://www.e-days.com/news/france-in-focus-
understanding-di...](https://www.e-days.com/news/france-in-focus-
understanding-different-countries-annual-leave)

this is not special to railway conductors. The fact that in other countries
people are being worked to the bone is the problem, not the fact that in
France they aren't.

Also, RTT is a means to decrease unemployment by spreading work among more
people. Saying it's excessive means essentially "let's pay the same thing to
less people for more work".

Yes, the conditions are not bad; and people in the US should be inspired to
organize, unionize - and not in those yellow collaborationist unions in the
AFL-CIO, but in independent unions or in an IWW section, and demand decent,
French-level employment conditions, at least.

~~~
privateSFacct
> The state owns and controls the SNCF, its expenses, subsidies and pricing.
> Its debt is meaningless, in that the government decides how much in debt it
> is in.

The debt is a sign of the amount of additional subsidy needed to cover the
benefits / expenses being paid. This amount (largish for France) will need to
be paid by taxpayers. It is not meaningless.

> Retiring based on the status and position you've reached is common in many
> workplaces/industries, in many countries.

The french system normally pays based on a 25 year average pay (inflation
adjusted)?Using most recent (highest paid) 6 months is not the same or
standard. Can you name any other country that uses this method? Short periods
like this are also prone to manipulation.

> If you mean to say, that if they do their job, the company can't fire them,
> then I don't see a problem with that.

The prohibition on layoffs consecutive to economic difficulties or
technological changes is one of the benefits of the railway job - I'm just
pointing that out. Other jobs even in france allows dismissal for economic
reasons (if you offer employee modified job etc etc).

~~~
throwaway73629
> The french system normally pays based on a 25 year average pay (inflation
> adjusted)?Using most recent (highest paid) 6 months is not the same or
> standard.

I’m not sure “normally” is the right word here. The system in France is rather
complicated. SNCF workers aren’t the only ones whose pension uses the last six
months of income to determine the amount of the pension payment.

Under the current system:

Private sector salaried workers receive one pension where the calculation is
based on their highest earning 25 years (adjusted for inflation). The
calculation also takes into account the number of years worked in the private
salaried worker sector. These workers may, depending on their job, also
receive a second pension where the amount received is based on total points
earned over all years worked (AGIRC - ARRCO).

Public sector workers receive a pension where the calculation is based on
their last six months of earnings, as well as the number of years they worked
in the public sector.

Self-employed workers pay into yet a number of different systems. I’m not
familiar with all them, but many are based on total points earned over the
years of contribution.

Finally, it’s possible for someone who’s worked at different times as a
private salaried worker, a public sector worker, and a self-employed worker,
to collect pensions from all the different sources.

------
PeterisP
Here's a bit offtopic diverging from the original topic into climate change.

This situation seems to be very relevant to various arguments for tackling
climate change and other environmental issues by "stopping growth". Thing is,
a _very_ large share of capital assets that "require" (i.e. expect) growth is
the various types of pension funds.

Any politician that would actually implement policies that intentionally cut
economic growth in order to save the planet (or any other purpose) will ensure
that the math for their local retirement system can't work out any more, that
some pension reform will be neccessary, admitting that the expected benefits
can't be paid out because the expected growth didn't happen. And as this
example shows, there will be literal riots on the streets if that's
threatened.

Also, compare this to earlier gilets jaunes riots initially sparkled by a fuel
tax increase, or the Chile riots sparkled by an increase in cost of public
transportation.

Climate change isn't bringing large quantities of violent protesters on the
streets, but requirement to make economic sacrifices definitely is. So it's
naive to expect success in cutting growth and aggressively taxing fossil fuels
to help climate change - the general population will not only vote against it,
they will violently fight to ensure that this is not done. Any politician
who's actually serious about implementing the economic changes needed to stop
climate change should expect be forcibly removed from power by a large part of
their population which won't (and in many cases, can't, they're the poorer
part of their society) tolerate short-term economic sacrifices. It's kind of
sad, I don't know what can be done about this, but at least we should be aware
about this issue when discussing any proposals that are supposed to be
realistic.

~~~
11235813213455
So much agreed,

I'm French. I wear a gilet jaune, but that's for saving my life when I ride a
bike in the night. They also protested against speed limits decrease
([https://www.gouvernement.fr/les-actions-du-
gouvernement/inte...](https://www.gouvernement.fr/les-actions-du-
gouvernement/interieur/la-limitation-de-vitesse-a-80-kmh-est-elle-efficace)),
I often ride on 2-lane roads, and obviously the faster a car is, the most
likely it is to kill me

Aside from that, I'm auto-entrepreneur which gives a quite low retirement, but
I don't think it's a reason to go on strike. I've had tough years, but always
had some good margin, being used to spend very little money

People can easily save money by changing their lifestyle, instead of asking
for more money, for more unnecessary over-consumption. Those individual
changes would be so beneficial for the environment and for themselves

~~~
PunchTornado
and they also destroyed the speed cameras. I have a very low opinion about the
gillets jaunes.

~~~
mensetmanusman
Haven’t speed cameras been shown to be the opposite of effective? They should
disappear :)

------
hpoe
So I won't say whose side I am on, or where I stand on social policies, but I
think it is important for both sides of the aisle to realize that once you
give people any sort of entitlement, it becomes exactly that an entitlement
that people feel entitled to. By so doing you make incredibly difficult if not
impossible to ever introduce any changes to it later no matter what is going
on, wars, natural disasters, etc. In the end short term thinking by
politicians wishing to cash in on votes no matter what they are voting for
will end up hurting things far more than someone who takes a long term
perspective.

~~~
tehjoker
That's the point. It is the well to do and the bosses that cry over giving the
people more, allowing them to relax, allowing them to be free of the tyranny
of the markets. To not give the people, meaning the majority, what they demand
is profoundly anti-democratic.

~~~
zozbot234
> giving the people more, allowing them to relax, allowing them to be free of
> the tyranny of the markets

The only possible way to meet these goals sustainably is to propel economic
growth. If you want people to escape "the tyranny of the market", you need
_more_ market, not less of it! Work smarter, not harder.

And France has a lot of wasted potential for GDP growth, that could be tapped
by reforming all sorts of misguided government policies. There's no inherent
reason why France couldn't become as wealthy as e.g. the Netherlands, or even
more.

~~~
tehjoker
The inequality charts would beg to differ. We need redistribution. There is an
army of unemployed labor and underutilized factories and other facilities. The
market is profoundly irrational at allocating resources to meet human need.

With a democratically run economy, we will fully utilize the entire working
population while cutting individuals some slack by reducing working hours,
increasing safety, and ensuring pensions will be kept. We will do away with
the unelected oligarchy that rules this planet.

~~~
zozbot234
We need redistribution, but we also need production, i.e. GDP growth. You
can't have one without the other. (And it's _damn hard_ to redistribute
sizeable fractions of GDP without killing the golden goose. It can be done,
but it's the sort of policy that has to be designed with great care.)

> The market is profoundly irrational at allocating resources to meet human
> need.

The market in places like France is deeply distorted by misguided government
policies, many of them a product of simple corruption and misguided thinking,
and not any serious attempt to remedy any market failure or promote social
goals. It _is_ "irrational" indeed, but not in the way you assume. This
explains why there's so much structural unemployment _and_ wasted and unused
capital there, as you point out.

~~~
tehjoker
Equipment and people exist, they just are. It is the market that decides
whether to open a position or to use a piece of equipment is unprofitable. The
fact that the market persistently and unresolvably fails to employ everyone
that wants a job or produce things that people need is a terrible flaw in the
economy and is a condemnation of capitalism.

~~~
zozbot234
I'm pretty sure that equipment doesn't just "exist", that it takes plenty of
labor to make those pieces of equipment.

Sometimes though pieces of equipment are just uneconomic given the surrounding
business environment; "the market" cannot arbitrarily decide to make them
profitable. Either people decide to change that business environment for the
better, or some expenses will have to be written off and the business will
need to move on. This shouln't be a "condemnation" of capitalism, it's a
critical part of the system. Mistakes are normal, but they need to be
acknowledged, and not stick around as zombies.

------
PunchTornado
I find it unbelievable that train drivers can retire at 52 and they are now
protesting for this "right". And there are also other people who are
supporting them.

I hope Macron stands by his policies and doesn't back off. I have no clue what
the French people expect from their future. Don't they see that all macro
variables have changed? declining population, ageing, higher life expectancy,
major economic shift to Asia etc.

~~~
user5994461
Bear in mind that there are millions of people directly affected by the
special pensions. It's really deep rooted in the French nation.

They are heavily manifesting against any change to pensions because they are
first targeted and have the most to lose, but there are many more people
manifesting that simply don't want to have to work longer. Nobody approaching
60 want to be told they have to work a few years more and/or receive a lower
allowance.

------
alkonaut
If train drivers have their own pension system (meaning they both contribute
to, and cash out from it) and they contribute so much each year that they can
cash out at 57, then I can see the outrage if they suddenly need to work 10
more years.

But if the train drivers don’t contribute more than some other group but still
get another ten years of retirement compared to other groups - then I’d be
outraged if I was part of the other groups which effectively subsidize the
luxury of a very early retirement.

That said, it’s always tricky to change old systems even when they are bad.
There may be people who chose between a much better paying job and driving
trains because they knew about the pension benefit etc. These types of systems
may need to be phased out (e.g raise the retirement age of train drivers one
year every two years).

~~~
skitout
@user5994461 is wrong

Train worker do pays "much more" every month for their special pension...

But currently this is not enough and the system is heavily subsidized... But
the biggest part of this disequilibrium is that there use to be a lot of rail
workers (so a lot are retiree now), and now not so much. If they had no
special treatment but a separate pension system, most of the problem would be
there too...

~~~
user5994461
I'd disagree with "much" unless you can show numbers saying how much they pay.
Noting there is a variation of up to 5% in contribution depending on personal
situation (including status cadre and other stuff).

I have family working in national research centers and they contribute less
than in the private sector (about 3%). Due to some historical agreement that's
waving some mandatory contributions for all personnel of that institution.

~~~
skitout
(In French)

For rail worker: [https://www.la-retraite-en-clair.fr/parcours-
professionnel-r...](https://www.la-retraite-en-clair.fr/parcours-
professionnel-regimes-retraite/regimes-speciaux-retraite/retraite-agents-sncf)

For "normal" workers: [https://www.la-retraite-en-clair.fr/parcours-
professionnel-r...](https://www.la-retraite-en-clair.fr/parcours-
professionnel-regimes-retraite/retraite-salaries-prive/comprendre-retraite-
salaries-prive-cotisations-age-depart-pensions)

~~~
user5994461
My take away from this would be that it doesn't seem to allow on boarding new
people and the contributions/benefits are being adjusted up/down each year
over the last few years. Look like it's being shut down progressively.

I can't estimate accurately what's the final rates because it's insanely
complicated, but from what I can gather they are not paying "much" more at all
(maybe 1-5% all things considered and mainly because it got increased
recently).

Interestingly, there is a subtle 23% line item that is supposed to cover the
extra perks. It's specifically paid by the company besides the gross salary,
so no it doesn't affect your salary or your disposable income.

It's as close as it gets to magic money in French accounting and that's where
it gets interesting. The SNCF itself is a public organization that is in
deficit every year (in part due to this; it's all circular), so it doesn't
have the funds to pay this, and it eventually has to be covered by the state
(the tax payers).

~~~
skitout
So much more is paid every month for this perk than for normal worker.

Note that SNCF is not in deficit every year, but generally post some profit.

Though they have a unhealthy debt burden, mainly due to enormous investment
needed to create the railway network. As it is seen a public infrastructure by
some their is a debate on how much of it should be supported by the state
(just like the state support the road system and the airtravel)

~~~
user5994461
I don't disagree that the SNCF is contributing extra (estimate 1-2B a year
given 130k employees), but it's not paid by the workers, it's not taken off
their salary. It is a perk and it is not taxable. Bearing in mind, the total
amount even with the extra is nowhere near enough to cover the actual
benefits.

2018 results say 33B in revenues, 141m in profit. I stand corrected, it's not
losing money every year lately, it's about even.

------
tehjoker
Goodbye austerity! Goodbye the rich! Goodbye capitalism!

Vive la liberté, l'égalité et la fraternité.

~~~
wazoox
Precisely. Bernard Arnault had his fortune doubled for no good reason in the
past year. Give the money back, you robber.

