Pension Insanity in France
Many people in France are waking up to the reality that they cannot sustain the welfare state indefinitely. Apparently, it isn’t economically feasible to have citizens take five weeks of vacation, produce very little, and then be guaranteed pension benefits at age 60. It just doesn’t work.
Consequently, Nicholas Sarkozy has attempted to solve this problem by raising the standard pension age from 60 to 62 and the age of a guaranteed “full” pension from 65 to 67. This “extreme” measure has led to French unions striking and shutting down the French economy.
Yes, that’s correct. Asking people to work two more years in France in order to prevent the country from bankrupting itself is worthy of a strike.
The unions claim Sarkozy is being unfair to people who enter the workforce later in life; those individuals would not be eligible for pensions until they were 67. Ironically, the unions never question how their own policies have prevented people from entering the workforce. For example, unions increase demands on employers and make it virtually impossible to fire anyone. This increases unemployment, especially for those below the age of 25. However, this would not be the first time that union policy had the result of harming workers.
Overall, the problem with guaranteed pensions is that the public will never be satisfied with the reality that long-term income security can’t be created by legislation. Only increased productivity and wealth creation can accomplish that. Sadly, there are people in our government currently advocating that America move towards a French-style pension system (see PDF). While it may create a guaranteed political future for those who distribute these “guaranteed” benefits, it will only lead to economic disaster for the country.