Why the French Cling to Their Welfare State

Five years after the Yellow Vests crisis, it looks like France is going revolutionary again. First came the December strikes that crippled French public transportation (including railways) right in time for Christmas.Then, on January 19, the first nationwide protest day, complete with strikes and semi-festive street parades (several hundred thousand people, if not millions, were involved), a second one on January 31 (around two million people), a third one on February 7 (a bit less successful in numbers), a fourth one on February 11 (a bit more successful than February 7). As I write these lines, demonstrators march across my district in Paris. Shops and restaurants are closed — just in case some violence and looting might take place. An even bigger round is scheduled for March 7.What people so stridently oppose is the pension reform being pursued by President Macron’s administration. The president and his prime minister, Elizabeth Borne, claim that the present pay-as-you-go retirement regime is not sustainable any longer and that drastic changes are needed. The protesters, led by the eight national unions, from the ex-communist CGT to the social-democratic CFDT to the free-enterprise-oriented CGC, reject any change. Were France a truly democratic country, the reform would simply be endorsed by the National Assembly. Mr. Macron’s centrist party, Renaissance, holds 270 seats out of 577, along with its allies. Les Républicains, the classic conservative party, with 61 seats, is even more committed to a pension reorganization than the Macronists and expected, accordingly, to join Renaissance on this issue, thus granting the cabinet an absolute majority of 331.This is way ahead of the combined leftwing and rightwing opposition: Nupes, the Left and Far Left coalition led by Jean-Luc Mélenchon, with 171 seats, and Marine Le Pen’s National Rally, at the political spectrum’s other end, with 88 seats.However, French democracy was born in sin, as Jean-Marie Colombani, the erstwhile editor of Le Monde, dryly observed: the Great Revolution of 1789 was essentially a succession of riots and massacres, starting with the storming of the Bastille and the summary beheading of its hapless governor; and ever since then, whatever the constitutional trappings, rioting has remained a kind of unofficial “fourth power” lurking behind the Executive, Legislative, and Judiciary.“As long as you will celebrate Bastille Day,” Mr. Colombani noted, “you will have to bow to the street.” And to the polls, for that matter. According to an Elabe-BFMTV poll released on February 8, 65 percent of the French want the cabinet to drop all or most of the proposed transformation. No wonder some of the classic conservatives and even some Macronists are getting cold feet about a bill that is proving so decidedly unpopular. Short of a parliamentary majority, the cabinet is constitutionally allowed to resort to executive orders. But that might be understood as a final provocation against “the people.”Which brings us to the main point: Why are the French so overwhelmingly opposed to Monsieur Macron’s and Madame Borne’s bill? Forget the reform’s technicalities. What is really at stake, in the eyes of the protesters, is the future of a national treasure: the world’s most generous Welfare State.France was a late comer in these matters. Freedom to strike was legalized in 1864 (under Emperor Napoleon III, a progressive dictator). That was 40 years after it had been recognized in the United Kingdom. The first comprehensive health care and pensions system was introduced in between 1928 and 1930 by, in Pierre Laval, the minister of labor who would become prime minister of the Vichy state. That was nearly 50 years after Bismarck’s Germany. However, the French made up for lost time after World War II.As soon as France was liberated from the Germans in 1944, General de Gaulle undertook a vast statist (and nearly socialist) overhaul of the country’s economy and society: the French leader, as head of the Republic’s provisional government, ruled by ordonnances. One of the earliest measures he enacted was the extension of universal franchise to women. “Social Security,” a comprehensive regime that included a national health service, maternity benefits, and retirement funds, was established in 1945, three weeks before the first post-war elections. There was something highly symbolic about all that. National resistance and liberation, gender equality, social benefits and even a strong executive seemed to be interconnected in a new covenant. Over the years, extending the social benefits or adding new benefits to the existing ones “in the spirit of 1944” became a prerequisite of national unity or just law and order.This is how the 1968 crisis — global strikes dovetailing with student riots — was eventually resolved. Further extensions (or “social advances” as the French had it) took place when in 1981 a socialist,François Mitterrand, was elected president, or by the end of the 20th century, as France had to cope with globalization. Presently, France’s welfare state surpasses everything similar in any country. Medicine is virtually free. So is college. Housing is largely subsidized. People work 35 hours a week. They are granted six weeks of paid vacation a year, plus 10 legal holidays. Sick leave may be extended for weeks, if not months or even years.Once formally hired, workers cannot be fired at will. Unemployment allowances are usually paid for eighteen months but may last twenty-seven months. The poor get RSA, a welfare benefit. Retirement age is 62.Naturally, this comes with a price. France is one of most taxed countries in the industrial world, with a 47.4 percent rate, against a European average of 41.7 percent and an OECD average of 34 percent. Its debt has been growing phenomenally, to reach 124 percent of its GDP in the 2020s. Not to mention another side-effect: as the work demographics change, the very logic of the system is collapsing. Especially regarding the retirement plans.Fifty years ago, by the end of the baby boom period, there were four working persons in France against one retired person. It made sense to rely on a pay-as-you-go system, where the working persons’ compulsory levies would pay for the pensions. Today, we deal with the millennials, and generations X or Z : the global French population is not growing any more (except for non-European immigration); moreover, people start working much later, and they live much longer after retirement. So much so that the ratio is close to one working person against one non-working person.The right answer would be to have people work a bit more on a weekly basis — say, 37 hours (the OECD average) instead of 35. Or alternatively to replace or supplement the present system with funded pension schemes. That, though, would be too much of a departure from the status quo.At the end of the day, the Macron administration opted for a modest proposition: abolishing costly “special retirement regimes” for dozens of professions and crafts and extending the retirement age to 64. Even that is now being rejected. Maybe an additional factor should be considered here. The French are not just unwilling to give up extensive benefits. Nor do they just cling to a 1945 Gaullist-socialist mythology. The unspoken reason why they cling so much to the Welfare State is that almost everything else is gone in terms of national identity.French sovereignty has been diluted into European supra-sovereignty. The industrial basis has been partly dismantled. Demography is in crisis. Christianity is receding (two percent of the French go to mass). The same can be said about family values, the meritocratic public school system, the military. The last thing the French can still dream of is, God willing, a 25-year-long retirement (the present average) to be started as early as possible.

Why the French Cling to Their Welfare State

Why the French Cling to Their Welfare State

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