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French strikes over pension reform hold lesson for the US and other countries

French strikes in 1995 caused Paris to back off of pension reform. Now the French government is trying again, and it is again being met by massive strikes. Delay, however, only makes pension reform more costly.

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Cash-strapped and pension-burdened governments around the world – from the United States to Britain – should look at what’s unfolding in France today and take heed:

Massive strikes, supported by students, are halting air and train travel, while closed ports threaten French fuel supplies. It is the fifth round of protests against a proposed rise in the retirement age.

You can chalk up part of the popular pushback to being French. As sure as lovers stroll along the banks of the Seine, protesters clog the streets whenever the government tries to pare back the generous benefits of the welfare state. In 1995, for instance, French President Jacques Chirac tried his hand at pension reform. A three-week transport strike forced him to back down.

It’s not the protests themselves, but the passage of time – the difference between Mr. Chirac’s day and this autumn day 15 years later – that holds the lesson for other governments with pensions they can’t afford.

You see, back in 1995, Chirac proposed only modest changes in the French retirement system. His government zeroed in on pensions for certain government workers, such as transit employees who were allowed to retire at age 50 – a decade before most other French workers.

Fifteen years later, French President Nicolas Sarkozy can no longer afford the luxury of nip-and-tuck pension reform. His proposed changes – which are now working their way through Parliament – are far more widespread, and thus more upsetting for the population.

With a few exceptions, he plans to raise the minimum retirement age for all workers from 60 to 62, and the age at which one can get full pension benefits from 65 to 67.

Why the more painful reform? Well, the day of reckoning that got put off in 1995 can no longer be postponed. Unfortunately, delaying the fix has made it more costly, and more urgent.

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