Anybody Feel Sorry For The French?

Emmanuel Macron has been an excellent leader of France.

To quote the New York Times, “Economic reforms during his presidency have led to a sharp drop in unemployment. Job creation and foreign investment have surged. The French tech sector has grown exponentially.”

They say the French work to live while Americans live to work. I admit to kind of liking the French approach better, but on the other hand there’s a paradox here. A society can only afford mass leisure if it’s also productive.

Macron understood that the next step in his economic reforms was to do something about the retirement age. He proposed increasing it from 62 to 64. When it became clear that he couldn’t get that through parliament, he did it by decree, prompting mass protests and strikes. The unrest is due to both the policy and the way Macron imposed it.

But what he did was not entirely undemocratic. There is a quirk in the French Constitution which allows the Prime Minister (who serves under the President) to act apart from parliament, but only if the government is willing to undergo a no-confidence vote there. Macron’s government barely survived that vote, but it did survive.

Overall, this isn’t a bad system. It combines democracy with a strong President who can, in rare cases, do necessary but unpopular things. In fact, this special presidential power has been used only about 100 times since 1958, when the new Constitution was adopted.

But let’s focus on the policy itself. Outside of Africa, the rest of the world is aging. Retirement systems created in a time of higher birth rates and lower life expectancies simply need to adapt to survive amid new demographic realities.

Life expectancy for an American who was 65 in 1935 (born in 1870) would have been only 40 years. In other words people who had achieved retirement age in 1935 should have already been dead for 25 years. On the other hand, a child born in 1955 who was 67, the full retirement age in 2022, still had another two years before he was projected to — to put it most gently — end his retirement, the average life expectancy for an infant in 1955 being 69.

If you want to look at it another way, a person born in 1935, when actuaries might have started pouring over their tables, could have expected to live to 61, four years before standard retirement age. A child born today can look forward to 79 years of life, or 12 years beyond today’s full retirement age of 67.

The U.S. birth rate was actually historically low in 1935 at only 19 per 1000 people, but that was due to the Depression. It bounced back up to the mid-20’s and remained there throughout the Baby Boom years. Today it is only 12 per 1000, or 37% lower than it was even in the middle of the Great Depression.

And the numbers for France are even more daunting. Average life expectancy there is 82 years (despite all those heavy sauces) while the birth rate is less than 11 per 1000.

So you see the problem. More retired people living longer and fewer younger workers to support them. In America we saved Social Security for decades with a grand compromise back in the 1980’s. The retirement age was slowly raised. Today, you need to wait until 67 to receive full benefits, though you can retire earlier if you’re willing to accept a lower payment.

We’ll soon need another adjustment. A good compromise would be to again bump up those retirement ages slightly and to increase the amount at which wages are taxed. Currently, wages over about $150,000 aren’t taxed for Social Security. In any event, the problem can be dealt with fairly easily as a matter of policy, though perhaps not as a matter of politics.

Which brings us back to the French. They need to stop whining. Macron’s new full retirement age would go from five years younger than it is for Americans to three years younger. What he’s done is necessary, reasonable and still generous. And most of the world is going to have to do something similar very soon.

The French should be grateful for their system of social benefits, and for the quality of their pastries. Also for their shoes. And have you ever had just a simple omelet over there? My gosh.

If you vote in Madison please consider Badri Lankella for school board. He’s a sensible alternative to the current board majority.