Are French Protests of Sarkozy's Plan to Delay Retirment Two Years Fair? | Business

French Fighting for the Right to Retire Relatively Young (AP)

The French work force was doing what it does as well as anyone yesterday—going out on strike. Somewhere between one and three million workers (the police and the big union, CGT, disputed the totals) hit the streets to protest the plan by the government of President Nicolas Sarkozy to increase France’s retirement age by two years. To age 62. I wish I could retire that young, some of you are saying. I wish I had a job, others are muttering. Still others ask: What’s a pension?

The push for pension reform by Sarkozy has been simmering all summer. The logic is inescapable: France can’t meet the future costs of the coming wave of retirees because there aren’t enough active workers behind them to pay for it. And with life expectancy expanding, the prospect of paying pensioners for 20 or 30 or 40 years gets ever more daunting. It’s a similar position that many old-economy corporations have faced in the U.S. and one that Social Security faces in the future.

The French twist, of course, is that the current age, 60, at which one is allowed to collect his retraite is low by American standards. We in fact seem to be headed in the other direction. The American tradition of 65-and-out is being ignored by a lot of older employees because they want to continue working— or they have to, given the shape of their 401ks.

French workers, on the other hand, have no intention of laboring well into their golden years. They are striking because they believe—as did furious Greek workers earlier this year—that they held up their end of the bargain. In their view they have paid high taxes in return for a generous welfare state and a pension fat enough to retire at 60. Why on earth would you want to give any of that up? So they fight on, knowing that the math isn’t going their way. “La réforme, elle sera votée et la réforme, elle sera appliquée,” said Labor Minister Eric Woerth. Short translation: this is a done deal.

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Small Dairies Go Under as Milk Prices Sink Again

PLAINFIELD, Vt. — The MacLaren brothers are third-generation dairy farmers, but they will likely be the last in their family.

After working all their lives on the hillside farm in Vermont that their grandfather bought in 1939, rising to milk cows at 3 a.m., even in blizzards and sub-zero temperatures, they decided to call it quits, auctioning off their roughly 200 cows and equipment ranging from stalls and hoof trimmers to tractors and steel pails.

http://rodgermmitchell.wordpress.com Rodger Malcolm Mitchell

France is stuck, because it is not monetarily sovereign. It cannot create enough money to pay retirement benefits.
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Once again, the ludicrous, debt-fearing, quasi-gold-standard EU system causes a terrible toll on people. Compare the EU system with that of the U.S., Canada, Australia, China et al, which are monetarily sovereign, and so have the ability to support a retirement plan of any size, and do not need to force people to work longer and longer (which also, by the way, exacerbates unemployment.)
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Sadly, the debt-hawks in America, a group that includes mainstream economists, most politicians and most media, do not know America is monetarily sovereign, so they act as though we were an EU nation. That is why you hear and read the ridiculous articles about Social Security and Medicare needing to cut benefits in order to remain solvent.
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France is screwed. They can’t come up with the money. America is screwed because we can come up with then money, but our leaders have bought into the lie that America can’t. They prattle on and on about the possibility of excessive inflation — a rare event last seen in 1979 and easily prevented and cured with interest rate control — and ignore the human suffering their policies cause, every single day.
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If you don’t understand the implications of monetary sovereignty, please don’t bother to reply to this comment, because you simply will not know what you’re talking about.
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Rodger Malcolm Mitchell
http://jaguar6cy.wordpress.com jaguar6cy

This is a very big change for any European nation. Normally they would simply lower the retirement age even further to “create” jobs. That is all a liberal or socialist knows how to do. But don’t be too concerned. What France cannot do, the EU now can. And as their economies slow, monetary policy will ultimately change to inflationary push. But economic malaise cannot be solved by inflation and can only delayed by it.
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jpgodon

Rodger Malcom Mitchell is very generous in declaring countries and people screwed, as if he knew what he is writing about! Maybe he could humbly study the situation in France in depth rather than make his not very sophisticated pronoucements. It is conceivable that more than 2 million people out in the steets, and repeatedly so, have a point that has escaped RM Mitchell.