The 9 to 5 Continues To 64
France’s protests should make the US reflect on its own retirement policy
Let them eat cake! Let them continue to work – wait, what?
French President Emmanuel Macron recently declared his intentions to raise the retirement age from 62 to 64, to which the nation responded with protests and marches in the streets.
The French government plans to change the retirement system because they are unable to pay pensions, preventing them from realigning retirement age with life expectancy. Many French citizens view this plan as theft, as they will be forced to give up two years’ worth of the pensions they paid through their taxes.
For years, western governments have been underinvesting in pension schemes. Populations were rapidly increasing, so taxes had the ability to cover the shortcomings of this underfunding. Pension payment was a problem for future generations to face. However, population growth is slowing down due to lower fertility rates and a lack of financial security for new parents. This makes it difficult for governments to pay the pensions of their citizens.
A decreasing population is a piece of good news for the environment as we battle human overconsumption and diminishing resources. However, it also fans the flames of a dwindling economy.
The average population is older as the birth rate slows, so more people are hitting retirement age while the remaining workforce remains stagnant. With the number of retirees growing faster than the number of workers, there is the potential for worker benefits to be slashed, taxes increased, the retirement age raised, as Macron is planning to do, or a combination of the three.
The United States’ population growth has seen much less of a hit – but growth remains less than 1%. Immigration from skilled workers has served the country well; the population would be declining without it due to decreased births and increased deaths from COVID-19.
A lack of equal distribution of wealth is a significant problem when it comes to income inequality and the affordability of raising children. A huge chunk of money is going to the wealthiest 5% of the population, aggravated further by the tax cuts given to the wealthy.
The United States retirement plans currently consist of employers and/or individuals depositing a certain percentage or flat amount of a worker’s salary into an account to be used solely for retirement – but the future of these plans remains uncertain.
Based on current patterns, the United States will be unable to pay Social Security and disability trust funds by 2035. In addition, the Social Security Administration has too few funds and many unaddressed issues.
Even worse, the widespread mismanagement of public pension funds by the government allows the corporate financial world to exploit the system and enhance their own earnings at the cost of those trying to retire.
Many workers cannot afford retirement due to debt, mortgages and daily expenses that leave the future uncertain. Yet, for those in the top income brackets, retirement is not an issue. The retirement system rewards those who can afford to retire on their own rather than providing aid to those who are unable to.
Wealth inequality plagues the United States and much of the world as the rich get richer while the poor are forced to compromise.