Tackling the pensioner problem
In France, some older people protest over rise in the retirement age, while others are happy to work
PARIS — When angry workers took to the streets of France two years ago to protest against moves to increase the retirement age to 62 from 60, one pensioner had trouble sympathizing with their cause.
Having fallen f rom nightclub manager at the peak of her career to eating at a soup kitchen, Françoise Peter wanted more than anything else to find another job.
“I sat there in front of my television thinking: are we living in the same world?” said Peter, who says her 1,000-euro monthly state pension is not enough to make ends meet. “People in this country want to take it easy, to retire early and lead a quiet life. But there are no guarantees in life.”
A surge in the number of pensioners heading back to work has come about despite a reluctance by President François Hollande’s Socialist government to pursue new reforms after the fierce 2010 protests that greeted those by his predecessor Nicolas Sarkozy.
It also suggests a system that has produced one of the lowest average retirement ages in the western world — 59.1 years compared with more than 64 in EU partner Sweden and 71.5 in Mexico — is failing to provide many aging French with the economic security they seek.
The phenomenon has wider consequences for the labour market, where 25 per cent of youth are unemployed, and underlines the strains on a pension system whose deficit is seen nearly quadrupling to 114 billion euros ($148 billion) by 2050.
Currently, 500,000 pensioners are back to work — three times the number in 2005 and a figure that is likely to expand as life expectancy stretches beyond 80 and a population of 16 million pensioners expands.
“This is new for France,” said Anne Sonnet, author of a report by the Paris-based Organisation for Economic Co-operation and Development (OECD) on pensions.
“We are slowly catching up to other European countries (in terms of working longer), which is good overall, but in cultural terms it’s a deep transition,” she said of European peers such as Germany where the legal retirement age has been raised to 67.
The reasons driving pensioners back to the workplace are mixed.
For some, it is a matter of choice: A 2009 change to the law under Sarkozy lets people work while claiming a pension, encouraging them to top up their incomes by returning to their old jobs on a part-time basis.
In highly skilled jobs and drawing a sizable pension, these baby boomers are taking advantage of their good health to stay active and supplement their income.
But others are victim of an economic slowdown that has brought France to the brink of recession.
As layoffs mount, older workers are often first in line for the chop because of their higher salaries. Yet Sarkozy’s 2010 reform means workers born after 1955 only get a full pension at 62 if they have made pension contributions for 41.5 years.
For mer secretary Mireille Giroux, 60, said she can live on her pension of 22,000 euros ($28,400) per year but took a weekend job handing out promotional samples at a shopping mall to help an unemployed daughter who is struggling to find work.
“I don’t want to stop being an active person just because someone else decided I should retire,” Giroux, who was laid off at 58.
Entrepreneurs are taking advan- tage. Two recruitment websites catering to older workers have cropped up in the past five years.
“I realized in 2008 that there was a lot of talk about unemployed older workers but nothing suitable for them on the Web,” said Valerie Gruau, who founded www.seniorsavotreservice.fr in 2008.
The bet is paying off: since last year, membership has doubled to 93,000. And others have followed suit.
Bertrand Favre, 30, founder of rival website www.Bitwiin.fr, got his idea after seeing many older workers in the United States.
“The baby-boom generation seemed forgotten in France,” he said. “But these people are in great shape intellectually, they still want to do things and the only thing stopping them is usually prejudice.”
It is a social trend on which Hollande’s five-month-old government is seeking to capitalize.
The government is promoting a new “generational contract” under which pensioners will stay at their workplace l ong enough to give young apprentices on-the-job training, a scheme aimed at easing youth unemployment.
“In the French job market, you are cursed if you are over 45, but even here mentalities are starting to change,” said Thierry Ehrmann, CEO of art auction website www. Artprice.com.
“CEOs are starting to realize that older workers bring a lot of wisdom and added value to the table, that they can help channel the energies of more impulsive youths.”