Can France still afford a retirement age of 62?

January 20, 2023

By Stephen Gowans

French president Emmanuel Macron wants to raise his country’s retirement age from its current 62 to 64.  According to the French Jupiter, the retirement age must increase, if France is to avoid higher taxes and growing debt.

The Wall Street Journal thinks he has a point.

Reporter Noemie Bisserbe writes that “as people live longer and the population grows older, the ratio of workers to retirees has decreased, putting the system under growing stress and forcing the government to increase its spending on pensions.”

Macron’s move, then, appears to be demanded by demographics. Except it isn’t. The argument Bisserbe offers for the assault on French workers is a Malthusian fallacy.

Malthus feared that the decreasing ratio of arable land to mouths to feed would lead to mass starvation. He reasoned that because the amount of arable land is finite, that as the population grew, the strain on a society’s ability to feed its people would increase.

Needless to say, Malthus was wrong. The world’s population kept growing, but so too did the supply of food—at an even greater rate. The future beheld not mass starvation, but growing plenty. Why? Because, owing to advances in science, technology, and technique, agriculture become stunningly more productive.

Just as agricultural productivity grew, so too did industrial productivity. The secular trend in France’s national income per person is upward, spurred by gains in productivity. That means that while the ratio of retirees to workers is increasing, France grows ever wealthier, and is likely to continue to grow wealthier as advances in science, technology, and technique make workers more productive. Increasing productivity easily offsets the decreasing ratio of workers to retirees, just as growing agricultural productivity offsets the decreasing ratio of land to people.

But here’s the trouble. For decades, productivity gains have been monopolized by the wealthy few. According to the OECD, since the turn of the century “the aggregate growth of real wages was significantly slower than that of aggregate productivity,” including in France.

Data from the St Louis Fed shows that “For a long time, the share of payments to labour relative to total payments to all factors of production was relatively stable. In recent decades, the share of payments to labour has been trending down in many countries,” France among them.

 It’s as if all the increased food produced by advances in agricultural productivity was set aside for the sole enjoyment of the rich, while the government distributes the remaining fixed amount of food among a growing population of workers and retirees.

Malthus’s argument makes sense, if you ignore advances in productivity. Likewise, Bisserbe’s explanation make sense, if you ignore the reality that French workers are being denied the benefits of growing productivity.

2 thoughts on “Can France still afford a retirement age of 62?

  1. An email from the World Federation of Trade Unions reminds us, “French Social Security is an achievement resulting from the workers’ resistance against the Nazi occupation and was set up by Ambroise Croizat, the CGT leader and communist Minister of Labor at the Liberation.”

  2. I recall that in the late sixties and early seventies the pundits in the mainstream media used to spruik the idea that with the rise and rise of robotics, the workers would have shorter working hours and more leisure time. And France did gain the most generous working conditions with a 62 years retirement age and longer holiday leave and job security than other countries any where. Ironic!

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