Hundreds of thousands of people are currently taking to the streets in France. They are protesting against President Emmanuel Macron’s pension reform. Why do people find it difficult to accept such a reform?
The current strikes in France are nothing unfamiliar. Consider the Yellow Vest/ Gilets Jaunes movement, prompted by a 2018 fuel price hike and engulfing the country in riots for several months. The current strikes are following these protests, but they were ignited primarily over a law raising the regular retirement age from 62 to 64.
Such retirement reforms are always painful. It is no coincidence, for example, that it took a grand coalition between the SPD and the CDU to raise the statutory retirement age in 2006/2007 for the first time in Germany’s postwar history (Kemmerling and Truchlewski 2015). Before that, raising the retirement age was a kind of electoral taboo, i.e., a topic that all parties preferred not to deal with. If governing parties nevertheless made an effort to raise the retirement age, the respective opposition party could gleefully incite the population against a reform. The grand coalition of 2006 (temporarily) broke this deadlock and agreed on a reform unpopular to voters but necessary in the eyes of many pension experts.
Why do people find it difficult to accept such a reform? After all, many people should be aware that demographic change is a major challenge for all pension systems. In political economy, one main thesis is that these reforms are unpopular for voters because they affect most of them. Interestingly, however, even people who would not be affected by pension reforms (anymore) often vote against them. Therefore, we need to look deeper into the soul of the electorate:
One possible approach targets “folk beliefs,” commonly held, intuitively plausible, and thus largely unquestioned views in public opinion. One example is the often-heard belief that you cannot take jobs away from young people by making older people work longer. Economists refer to this – somewhat disparagingly – as an end-of-labor fallacy or a “lump of labor fallacy.” Indeed, it is not a given that every year an older person is expected to work longer is really at the expense of a year worked by a younger person. In the language of economists, these workers are not substitutes, but just cited as one counterargument.
But in some ways, economists also make it too easy for themselves. Leaving aside the question of whether processes such as digitization or globalization really reduce the number of jobs in a society: Many people believe so (Kemmerling 2016). And if they believe this, they will instinctively and vehemently reject reforms like the French one.
Incidentally, we find such attitudes not only in public opinion but also among politicians, for example, in parliamentary debates (Kemmerling & Gast Zepeda, 2022). This is not surprising because, first, politicians are also voters and may share their views, and second, it may make sense from an electoral perspective to support such views. Politicians need to support popular opinions. Thus, it is not surprising that French opposition parties were against the pension reform. Therefore, the Macron government was forced to bypass the parliament to pass the law. However, such an approach only adds fuel to the fire of the strikers.
In France, the situation is exacerbated because the previous working time policy went in a completely different direction. There, as early as 2000, a law aimed at reducing the working week to 35 hours for all employees. However sensible and progressive, such a law only reinforced “folk beliefs”, such as the idea of the end of work. Therefore, raising the retirement age not only seems like a turn of 180 degrees, but it also looks – intuitively – like folly in the eyes of many voters.
Demographic and technological change make it essential to adapt social systems. Neighboring countries such as the Netherlands show that this can be done flexibly and intelligently. The Dutch part-time policy also holds a template for a gradual transition to retirement (Schmid 2002; Hartlapp and Kemmerling 2008). Why can’t we all get there? What governments everywhere need to learn is how to communicate better necessary but unpopular reforms and how to find better compromises. Radical solutions only lead to loss of legitimacy, swelling resistance, or even to the reversal of reforms by later governments. In Germany, a good example are the Schröder government’s labor market and social reforms called ‘Agenda 2010’. Not only did they lead to a long-term estrangement with Schröder’s social-democratic party, and long-term political distrust especially in Eastern Germany, but they also led to partial reversals. A reform strategy must therefore take a much deeper approach to communication and deliberation and pay more attention to people’s fears and intuitions.
Hartlapp, M. and Kemmerling, A. 2008. “When a Solution Becomes the Problem: The Causes for Policy Reversal on Early Exit from the Labour Force” Journal of European Social Policy, 18(4): 366-379 Kemmerling, A. 2016. “The End of Work or Work without End? How People’s Beliefs about Labor Markets Shape Retirement Politics.” Journal of Public Policy 36 (January): 109-38.
Kemmerling, A., and Z. Truchlewski. 2015. “Fiscal Performance in Germany: The Role Of Electoral Competition.” In Deficits and Debt in Industrialized Democracies, edited by G. Park and E. Ide. London: Routledge.
Kemmerling, Achim, and Gast Zepeda, Stephanie. 2022. “Tracing Fears about Digitalization and Automation in Social and Labor Market Policy Debates.” In Digitalization and the Welfare State, 214-36. oxford et al.: Oxford University Press.
Schmid, G. 2002. “Paths to a new full employment. Transitional labor markets and activating labor market policies.” Frankfurt am Main: Campus.