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France’s controversial pension reforms: Will women really be the biggest winners?

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Protesters walk with placards reading "Equality for women's pension" (L) and "Born before 1975: mary me" during a demonstration on December 12, 2019
Protesters walk with placards reading "Equality for women's pension" (L) and "Born before 1975: mary me" during a demonstration on December 12, 2019   -   Copyright  DOMINIQUE FAGET / AFP
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Faced with crippling transport strikes, protests and criticism against its pension reform plans, the French government has put gender equality at the forefront of its communication strategy.

"Women will be the big winners of the universal [pension] system," Prime Minister Edouard Philippe said last month.

Women’s average pension in France is currently 42 % lower than men, according to official figures, so there is certainly room for improvement.

But many are challenging the government’s narrative, claiming that Swedish women are allegedly worse off after a similar reform in the Scandinavian country two decades ago.

Will French women actually benefit from the new pension system and what can we learn from the examples of other European countries?

What reforms is Macron proposing?

France’s current system is generous: it sees pensions calculated on workers’ 25 best years of salary.

In the public sector, it’s based on their last six months of salary.

There are also 42 different pension types in the public sector, offering better benefits and early retirement.

Macron wants to have a single, universal system, where each day worked earns points for a worker’s future pension benefits.

The government also plans to increase the official age for a full pension to 64 from 62, even though the Prime Minister recently said the measure would be temporarily scrapped in an attempt to quell ongoing protests.

How does the French government think the reforms will help women?

Minimum pension increase

The government's central argument is that the minimum pension will rise to €1,000 per month — or 85% of the minimum wage — in the new system.

38% of French female pensioners currently get less than €1,000 per month.

"This will naturally benefit women, who often have the lowest pensions," said Dominique Andolfatto, a professor of political science at the University of Burgundy.

"But the provision is not exclusive to them. Men with modest incomes and pensions, like many farmers, for example, will benefit equally," Andolfatto added.

Child credits

A pension-point increase of 5% will be awarded from the first child and for each child, the government said.

At the moment, only large families of at least three children received a 10% pension-point increase.

"These points can be shared between the parents, and will by default be allocated to the mother. This measure will increase the rights granted to households with one or two children, in particular, single-parent families, who are disadvantaged in the current system," the government said in a press release.

"Large families will also be able to benefit from an increase beyond the current rights. For example, it will be 25% for five children," the release continued.

Surviving spouses' pensions

Women make up 90% of the beneficiaries of the surviving spouse pension mechanism, according to the CGT labour union, so this is an important issue for gender equality.

According to the government, the new system will ensure the surviving spouse gets 70% of the total pensions of the couple, thus guaranteeing her/his standard of living.

Why it’s not that simple

Many experts, unionists and feminist groups, say the benefits of the reform for women are not so clear.

Andolfatto told Euronews that whether women were the "big winners" of the reform still remained to be proven, concretely.

Hardline labour union CGT circulated a petition on social media called: "Women as the great winners of the pension reform? LOL!"

Philippe’s assertion is not grounded in "any figure or simulation to demonstrate it", the petition says.

So what are the main concerns for women?

Concerns over pensions calculations

Currently, only the 25 highest years of income are taken into account for the pensions’ calculations.

"In the new system, people’s pensions will be proportional to their level of contributions over their entire professional career," Andolfatto told Euronews.

"If a career is discontinued, if remuneration is low, there will be no miracle: the pension will be low," he added.

Considering that women’s careers are often interrupted by pregnancies, parental leaves, periods of unemployment or part-time work, critics argue that this central principle of the reform may actually harm them.

"However, each contribution period, even short ones, will be taken into account," Andolfatto nuanced.

"Therefore, there will be better consideration of short (or fixed-term) employment contracts."

Concerns over family dimensions

While the 5% pension-point increase from the first child will be good news to many families, critics are concerned that couples will choose to attribute it to the father, whose earnings tend to be higher than mothers.

"What will happen to women in case of divorce?" a column signed by 16 female unionists, economists and feminists wondered in Le Monde newspaper.

CGT union also noted that it will be harder for the surviving spouse to access their deceased partner’s pension.

In particular, divorcees will now be excluded from the scheme — even though 45% of marriages in France end with a divorce, the union pointed out.

Furthermore, the surviving spouse will need to be retired in order to benefit from the scheme, which wasn’t the case until now.

‘Window-dressing’

According to CGT and feminist groups, even some of the flagship measures allegedly supposed to benefit women are nothing more than "window dressing".

As an example, they cite the rise of the minimum pension to €1,000.

"The government forgets to mention (...) the requirement of having a full career, whereas 40% of women do not have a complete career, " CGT said in a press release.

What we can learn from other European experiences

Beyond the pros and cons of the reform for women, looking at the experiences of other European countries can help us make sense of the French case.

The Sweden analogy

FILE/ THOMAS SAMSON / AFP

Sweden made similar reforms to the those proposed in France, switching to a points-based, universal pension system back in the 1990s.

Alain Lefebvre, a former French diplomat in Sweden and author of the essay Macron, the Swedish, argues that women were among the losers of the reform in the Scandinavian country.

In an interview with Challenges magazine in October last year, Lefebvre cites a 2017 study by the Swedish pensions agency:

"For people born between 1938 and 1945, 92% of Swedish women would have had higher pensions under the old system, and 72% of men."

However, this data concerns only a specific generation and improvement looms for younger women, Swedish scholar Gabriella Sjögren Lindquist told Euronews.

"As women’s wages are increasing and part-time work is decreasing, our calculations predict that the pension gap between men and women will decrease from 72% in 2014 (for persons born in 1947) to 81% for persons born in 1985-1990."

"We have not made any simulations of how the gap would have evolved if we would have kept the old pension system," she added.

The expert noted that taking into account income during the whole life rather than the best earning years tended to increase gender inequality.

"In our old pension system, the pension was based on the 15 years of best income during your working life."

"This means that women’s pension was not based on years with lower income e.g. when they were caring for small children and working part-time."

"In the new pension system, pensions are based on income during the whole life. This means that periods of low income will affect your pension more in the new system than in the old system," Sjögren Lindquist said

Norway

Considering the flaws of the Swedish model, which other countries could inspire more gender-equal pension reforms in Europe?

Norway may offer up valuable lessons.

"The Norwegian version contains a particularly comprehensive set of redistributive mechanisms, at least compared to the Swedish prototype, and therefore the reduction in the gender gap achieved by the Norwegian system is likely to be particularly large," wrote academics Elin Halvorsen and Axel West Pedersen in a recent study.

"Generous child credits, the right to inherit pension rights after a deceased spouse and a comparatively generous minimum guarantee are all peculiarities of the Norwegian system that contribute significantly to close the gender gap," the researchers found.

"The reason why reformed Norwegian pension system performs relatively well in terms of gender equality is that a number of women-friendly components have been maintained in the new system," Petersen told Euronews.

A gloomy European outlook

"Unfortunately, women are among the poorest retirees across Europe," said Marina Monaco of the European Trade Union Confederation.

"The differences in pension entitlements are closely related to the performances of each country's labour market, employment and labour conditions," Monaco explained.

So in other words, gender inequality at work is reflected and even amplified in the pension systems.

According to the ETUC expert, the gender pay gap in Europe stands between 7% and 18%, the average in the EU stands at 16%. But when it comes to pensions, the gender gap is even higher, between 34% and 38%.

"Public systems that ensure full coverage or almost full coverage and that are not only contribution-based but also complemented by public funds" tend to guarantee better pension entitlements to all - including women, Monaco said.