FRANCE: Battling Over Pensions

Against the Current, No. 151, March/April 2011

Jason Stanley

FRANCE WAS ROCKED in September-October 2010 by some of the country’s largest protests in recent memory, as workers fought to prevent cuts to their public pensions. President Nicolas Sarkozy’s agenda promised to raise the minimum retirement age from 60 to 62 and the age for a full pension from 65 to 67.

On eight different occasions, millions of workers filled the streets throughout the country in national demonstrations. Fuel shortages arose as strikes and protests blocked access to the country’s oil refineries and depots. Air, rail and car traffic were slowed considerably as airline and rail workers struck and as truckers ground traffic to a snail’s pace on busy highways.

More than a hundred thousand students joined demonstrations. Some wondered aloud whether the country was on the verge of an explosion of mobilization sufficient to turn the tide on decades of cutbacks.

Yet as the government inched closer to passing the pension cuts, the movement lost steam. Unions estimate that 3.5 million workers mobilized throughout the country on both October 12 and October 19, yet by November 6, several days before the government’s final vote, the number of protesters in the streets had declined by two-thirds.

Faced with a deflating movement, the government moved forward with its austerity agenda. On November 10, the cuts were signed into law. What can be learned from this struggle as we look to the future?

Crisis of Demography or Profitability?

President Sarkozy insisted he had no option but to pursue cuts to the public pension scheme. The problem as framed by the government had nothing to do with the current economic crisis or the related sovereign debt crisis, but was instead the product of shifting demographics. Like most industrialized countries, France has seen the number of seniors rise faster than the working-age population, due to the aging of the baby boomer generation, declining fertility rates and rising life expectancy.

At the same time, young people tend to start working later in life than they did decades ago. These trends have meant a decrease in the proportion of the population contributing to the pension system and an increase in the proportion receiving benefits, while pensioners collect for a longer time. The government says the large annual deficit in the pension system can only be fixed by raising the retirement age.

Workers agreed that something needed to be done, but they protested the ‘solution’ proposed by Sarkozy. The country’s largest union, the CGT, argued that the pension deficit was the product of massive job losses and long-term high unemployment, not demographic trends. Today, 10% of French workers are without jobs. Official unemployment has hovered between 8-10% for the past 30 years in France. In 2009 alone, some 680,000 jobs were lost, reducing the salary base for the pension fund by 1.4%.

Given that pensions are financed by workers and employers through social charges on a per worker basis, a strategy to create millions of jobs would substantially increase pension fund contributions.

Equally, unions argued that the government could have closed loopholes that deprive the pension fund of billions of dollars in contributions each year. In recent decades, successive governments have reduced contribution requirements for firms hiring low-wage workers.

A number of streams of financial income, such as stock options, also remain exempt from social charges used to fund public pensions. Eliminating these loopholes would provide the pension fund with much needed revenue.

These and other arguments were made, yet Sarkozy never swayed from his singular focus on increasing the retirement age.

That he opted to attack working class living standards rather than re-craft a new industrial strategy was hardly a surprise. From the beginning of his tenure, Sarkozy had promised to make inroads against France’s welfare state. He also openly flaunted his close relationship with the country’s wealthy elite — one recent book labeled him “The President of the Rich.” Both of the country’s major employers federations fully supported his drive to cut pensions.

Yet it is also unsurprising for reasons that have little to do with the current government. The welfare state in France has been under relentless attack since the 1980s. Workers have seen several waves of attacks on public pensions, a dramatic erosion in coverage and benefit levels for unemployment insurance, and a weakening of labor laws leading to a rise in part-time and short-term employment.

Gains have not been unknown — one of the most notable was the establishment of the right to retire at age 60 in 1982 — but the overwhelming trend has been towards retrenchment, as in most advanced capitalist democracies. After an explosion of welfare state expansion in France in the immediate postwar years, the 1970s marked a turning point because it was here that the country’s economy began to slow down.

On the surface, the 1973 oil crisis and 1979 “Volcker Shock” (where the U.S. Federal Reserve dramatically raised interest rates) were the culprits, throwing sand into the wheels of an otherwise charging economy. But a closer look shows that the slowdown was already underway before these events occurred and that it was the product of a downturn in average profitability throughout the economy — indeed, throughout the Western world. (For background on the early years of the downturn in France and other European countries, see Duménil, G. and Lévy, D., Capital Resurgent: Roots of the Neoliberal Revolution, translated by D. Jeffers, Cambridge, MA: Harvard University Press, 2004.)

Since that time, France’s economy has suffered. Average profit rates have generally been on the decline since the late 1960s. This has brought about a slowdown in new investment as firms have opted instead to distribute an increasing portion of surplus to investors in the form of dividends.

Together, these trends have taken a heavy toll on growth and employment. Whereas growth in GDP had averaged close to six percent between 1945 and 1975, it has averaged only two percent since then. And whereas unemployment hovered near two percent in the 30 years following the Second World War, it has remained close to 9% since then.

France was approximately 48% wealthier in real per capita terms in 2008 than it was in 1982, when workers won the right to retire at 60 (Organization for Economic Cooperation and Development, (accessed on 14 January 2011).Yet the dynamics of capitalism are such that a slowdown in economy-wide profitability turns employers, and in most cases the state, against ‘burdensome’ charges required to fund public pensions and other welfare state provisions.

French workers have been more effective at defending their welfare state than have workers elsewhere, but the country’s labor movement has not been unscathed by these trends. Since the late 1970s, union density has been more than halved, dropping from 20% to 7.7%, while the number and size of labor disruptions per year has declined precipitously.

An Explosion of Unrest

It was in the context of this generalized, extended downturn that popular protest erupted against Sarkozy’s planned pension cuts in late 2010. From the beginning, this mobilization was broad and deep. All eight of the country’s unions — from big to small, radical to conservative — worked together in an “Intersyndicale,” discussing tactics and planning national demonstrations.

All political parties on the broad left — from the center-left Socialist Party to the radical-left New Anti-Capitalist Party — supported the mobilization and actively participated in the national days of action. The country’s largest global justice organization, ATTAC, and one of its most prominent left-wing research groups, Fondation Copernic, were also prominent participants.

As Sarkozy struggled to paint protesters as misguided, public opinion overwhelmingly disagreed with him. Some two-thirds of the population consistently voiced support for the movement, with support rising over the course of the two months of action. At its peak, the movement mobilized upwards of 3.5 million workers on two separate occasions, marking some of the largest single-day demonstrations in recent history.

Unions played a central role in building the movement. The Intersyndicale acted and was generally recognized as the sole authority in guiding the movement’s unfolding. This showed that, while union density and militancy have declined in recent decades, unions still retain extremely high levels of public support. It also demonstrated that unions will need to stand at the center of any mass movement in the near future.

While some in the international media played up comparisons with May 1968, activists in France drew strength from more recent mass mobilizations. French workers and students all remember the 2006 battle against the government’s effort to loosen labor laws and lower wages for first-time job seekers. In 1995, mass mobilization halted the government’s efforts to push through cuts to public pensions. The collective memory of these victories gave workers confidence in the power of strikes, civil disobedience, and pressure from below.

In each of these mobilizations, the movement was anchored by mass participation in demonstrations but driven forward by the more militant actions of smaller groups. In October 2010, as it became clear to activists that popular protest was growing, calls spread for workers to engage in rolling strikes. A minority of rail and transit workers did just this, though participation waned over time. Truckers throughout the country engaged in periodic “snail actions,” slowing traffic to a crawl on major highways.

Yet it was oil refinery workers who lit a fire under the movement as they struck their workplaces, blocking access to fuel supplies. At its peak, some 3500 service stations were closed or significantly affected.

The movement also saw a much broader use of civil disobedience tactics than was common in previous mass mobilizations. On countless occasions, workers, students and community groups collaborated to block access to public transit depots, disrupt traffic, prevent fuel deliveries, block airports, and so on.

These tactics were not new in France’s history, but in the past they were almost always practiced by unions and were often denounced as too radical. In this case, most of these actions were organized by informal collectives of workers and activists, and they enjoyed wide public support.

Pressure Dissipates

By mid-October, the movement was already larger than several others that had been victorious in the recent past. Yet participation virtually evaporated by early November.

From the beginning, the bar was set extremely high for the movement. Sarkozy had staked his political career on this move. Though his popularity was at an all-time low, and while critics and rivals openly wondered whether he could win another election for the right, no cracks appeared in the pro-austerity coalition.

At first, this intransigence incited greater mobilization. But it took a toll on the movement as increasing numbers of protesters saw the bill’s passage as inevitable.

Unions also played a contradictory role. On one hand, they cooperated to organize massive national demonstrations that no other organizations, and no individual union or small group of unions, could have matched. In this sense, the Intersyndicale was the driving force behind the massive turnouts that gave the movement its strength.

On the other hand, the Intersyndicale was only ever as militant as its least militant member. Union leaders agreed to collectively support national demonstrations, but refused to call for anything bolder, even as rolling strikes began to spread.

The Intersyndicale also failed to integrate non-union groups into the organizing body, despite the obvious role that such groups could play in mobilizing different segments of the population.

Yet if union leaders did not initiate or accelerate the growth of militancy, they also did not inhibit it. The general secretary of the CGT, the country’s largest union, might not have called for rolling strikes, but workers throughout the country were well aware that such strikes were nascent.

Nevertheless, few workers joined these rolling strikes, even in sectors well known for their militancy, such as rail and education. In many cases, workplace assemblies called by rank-and-file committees also failed to attract sizable numbers of workers.

Recent defeats in sectoral struggles likely played a role in diminishing participation. Workers at the national rail company had endured a crushing defeat in early 2010 after striking for two weeks in an effort to fend off job cuts and privatization. Postal workers and teachers were also still recovering from hard strikes against similar threats. These fights left many workers tired and unwilling to sacrifice more income to strikes.

Looking to the Future

This was a defeat, but not a demoralizing one. Workers and unions appear to have gained confidence from their capacity to mount a mass movement against austerity.

Anecdotal evidence suggests that thousands of workers have joined unions in the months during and following the mobilization. In a country where union membership is entirely optional and where all workplaces are open shops, this is an important step forward. Other activists highlight the solidarity built across union lines, particularly between workers in the CGT and the more radical Solidaires, as workers formed inter-union strike committees.

How well unions and the left capitalize on these gains, and how well they draw lessons from the weaknesses that led to defeat, will only become clear in the next several years as President Sarkozy and the major employers federations turn their sights on other areas of the welfare state.

ATC 151, March-April 2011