Pensions: these questionable arguments from supporters and opponents of the reform

Hard to find there. Since the presentation of the pension reform by Elisabeth Borne a week ago, supporters and detractors of raising the legal age to 64 years have responded on television with forceful arguments to convince public opinion to join their position. Certain arguments that regularly arise in pension debates are now well known, although they sometimes deserve to be qualified, or even denied. General description.

• “There is an urgent need to save our pension system”

(gabriel attalDelegate Minister in Charge of Public Accounts, January 12, 2023).

This is one of the government’s main arguments to justify its project: working longer would be a necessity to save a system in danger, because it is structurally deficient. In its latest report, the Pension Orientation Council (COR) confirms that there is a real need for financing: after a surplus of 3,200 million euros in 2022, the deficit should be between 0.5 and 0.8 points of GDP between 2022 and 2032. In the end, the pension system would be “on average in deficit” for the next 25 years, according to the COR. With accounts in the red until the 2070s in the worst case scenario.

But if there is indeed a need for financing to ensure the balance of the system, it is exaggerated to evoke any urgency. According to COR’s projections, the expected shortfalls will be far from explosive (10 to 12 billion per year out of approximately 340 billion in annual spending). In the absence of reform, the dynamics of pension spending would even remain “contained” during the period studied, according to the COR. That is at least until 2070.

In the end, the body attached to Matignon affirms that the results of its projections “do not validate the merits of the discourses that raise the idea of ​​an uncontrolled dynamic of spending on pensions.”

• “A quarter of the poorest 5% die before the age of 62”

(Manuel Bompard, coordinator of insubordinate France, September 25, 2022).

This figure from the INSEE work published in 2018 is often taken up by the left to denounce the postponement of the legal age of departure to 64 years. But your interpretation is wrong. In the first place, because it is not the “poorest 5%” but the “poorest 5% of men” (for women, this proportion would not be a quarter but 13%). Then, because it is difficult to relate it to the phenomenon of job burnout: 5% of the poorest men mention having an average standard of living of 466 euros. In other words, these are people who have worked little or nothing throughout their lives and who, therefore, have very few or no pension rights.

Above all, it should be noted that this is a life expectancy indicator that considers that mortality conditions by standard of living, age or gender remain constant throughout life. “The figure literally says that if a person spends every year of their life in the bottom 5% of their age group, their mortality at each age is much higher than average, and their risk of dying before age 62 it is 25%”, he specifies. economist Michaël Zemmour in a blog post posted on the Economic Alternatives site.

However, “one of the difficulties is that we don’t really know (in any case, the study doesn’t say so), how many people live their entire lives among the bottom 5% (in income). A consequent number of people experience phases of great poverty and more favorable phases of their lives, so that we don’t know if 1%, 2% or 5% of people stay in the bottom 5% all their lives. Add.

•“We live longer and that is why (…) we have to work more”

(Olivier DussopMinister of Labor, December 15, 2022).

The argument has been taken up by members of the government for years: the French are living older and older, it is logical to increase the working day. “It’s common sense,” explained Emmanuel Macron four years ago.

Although it is undeniable that life expectancy has clearly increased in recent decades, Olivier Dussopt’s statement also deserves to be qualified. In the first place, because by consulting the figures in detail, we will notice that the increase in life expectancy of the French has slowed down in recent years, reaching 85.2 years for women and 79.3 years for men in 2022. Overall, the same level as in 2014, the year of the last pension reform, although it should be noted that this stagnation mainly reflects the impact of Covid-19, which reduced life expectancy between 2019 and 2020.

If the statement of the Minister of Labor needs to be qualified, it is above all because it hides important disparities, life expectancy not being the same according to profession, standard of living, degree…

Life expectancy at 35 years for a male executive was also 49 years compared to 42.6 years for workers in mortality conditions between 2009 and 2013 (latest figures available), according to data from Insee and Drees.

Instead of life expectancy at birth, unions opposed to pension reform refer to disability-free or “healthy” life expectancy as a measure of the number of years a person can expect to live in average without suffering a disability in the gestures of daily life.

This indicator, which places more emphasis on quality of life, has risen slightly in recent years to rise in 2020 to 64.4 years for men and 65.9 years for women, again with significant disparities according to socioprofessional category, degree and standard of living.

But just like life expectancy at birth, disability-free life expectancy at birth is not a very relevant indicator to talk about pensions because it takes into account all accidents, temporary disabilities or other illnesses that occurred even before the start of their life. professional life. race. Better to look at the healthy life expectancy at age 65, which was 12.1 years for women and 10.6 years for men in 2020, an increase from 2008 of 2 years and one month for women and one year and 11 months for men.

•“At age 62, half of the people who have to retire are already unemployed”

(Jordan Bardela, President of the National Rally on April 13, 2022).

This statement circulates a lot among opponents of the pension reform who warn about the employment situation of the elderly. However, it is due to a misinterpretation. According to Dares, the statistics service of the Ministry of Labor, 56.1% of people aged 55 to 64 had a job in the last quarter of 2021. The rest (43.9%) were therefore inactive but not necessarily unemployed since this rate also includes people who are sick, disabled or who have been inactive for a long time without, however, receiving unemployment.

In reality, “only” 13% of the insured of the generation of 1950 were unemployed during the year before the pension rights were liquidated, according to a Drees study published in 2022.

Other work from the Agirc-arrco private sector employee supplementary fund confirms this observation. Indeed, 63% of its new retirees were active in the year prior to their retirement, while 11.5% were unemployed, 6.2% sick or disabled, and 19.3% had not contributed to any scheme retirement.

• “This choice (to postpone the legal retirement age) is also that of all our European neighbours”

(Elisabeth Borne, Prime Minister, January 10, 2023).

It is necessary to raise the legal retirement age. The proof: most of the countries in Europe have done it, reaching 65, 66 or even more. This reasoning regularly developed by the government is debatable and deserves some clarification, because it compares things that are often difficult to compare.

In fact, the legal retirement age is fierce in France: impossible to assert your rights before. However, this is not necessarily the case elsewhere. For example, if the legal age reported is 67 in Greece, these are employees who have only contributed for 15 years. Those who have contributed for at least 40 years can retire at age 62, and even earlier by agreeing to receive a lower pension. The same in Germany, where it is possible for an employee who has contributed for 35 years to retire before the normal age, which will increase from 65 to 67, on the condition that he accepts that his pension be reduced by 3.6% the year that lack.

In Belgium, where the legal age will also rise from 65 to 67, employees who started work at 16 will be able to leave at 60. Those who started at 21 will be 63. In neighboring Luxembourg, the “legal” age ” is set at 65 years, but those who have contributed for 40 years can claim early retirement at 57. In short, the legal age in many European countries is not exactly the same as in France.

• “It is more in the most modest employees that will weigh”

(Lawrence Berger, CFDT General Secretary, January 4, 2023).

All the unions agree on this point: the pension reform will particularly penalize the most disadvantaged French, the latter, who have often started working earlier, will have to remain in the labor market longer than the others. Not so sure, according to the Institute for Public Policy (IPP), which considers in a report published last week that “the current reasoning about the reform that would affect the most modest does not take sufficient account of the complexity of the careers and the scope of the exceptions”. According to the government, 40% of the insured will still be able to leave before the age of 64.

For the IPP experts, the government’s pension reform project takes “more modest people into account” than the 2010 reform. Particularly since the discount cancellation age set at 67 years will not move. “The reform, therefore, should not affect, in terms of retirement age, insured people with incomplete careers, who generally wait until this age for cancellation of the discount to fully retire,” underlines the IPP. Then, “disabled people and incapable of work will be (…) also exempt from raising the minimum age, so they can continue retiring at 62 years.”

In the end, “it seems that it can be said that the retirement age of a large part of the most modest insured will not change within the framework of the reform project, either because these insured will retain the possibility of retiring at 62 years due to disability and disability, or because they already had to wait until they were 67 to get out anyway with the full rate”, sums up the IPP. For the institute, they are “plus the intermediate categories on the income scale, including those in the middle top of this scale, who will probably be the most affected by the next reform”, knowing that these intermediate categories “may include, for example, intermediate professions, but also skilled workers or employees”.

However, it should be specified that the IPP only analyzes the effect of the reform in terms of retirement age and not in the pensions that could decrease for some of the disabled and incapacitated people, as well as for people with incomplete careers.