TJ Walker discusses France’s paused plan to raise the retirement age from 62 to 64 amid massive protests, situating the dispute in demographic pressures and the constraints of the eurozone. He contrasts France’s inability to print its own currency with the U.S. fiscal flexibility, highlights projected pension deficits and political incentives favoring older voters, and argues that younger voters must mobilize to address intergenerational distributional pressures.
Questions this video answers
From 62 to 64.
€13 billion per year by 2030.
About €30 billion per year by 2045.
About 5.8% of GDP.
67 years old.
Chapters
France pension protest In France, retirement isn't just a benefit, it's a birthright. According to the Times, President Emmanuel Macron has now agreed to pause his plan to raise the retirement age from 62 to 64. Now, if you're an American, you may be thinking, did I hear that right? Did TJ make a mistake? That's right. They're raising the retirement age from 62 to 64. Or at least they were trying to. But now, bowing to massive public pressure and months of protest, it's going to go back to 62. Macron argued that without change, France's pay as you go pension system would collapse. In that system, current workers fund current retirees, and there are fewer workers every year. With people living longer and birth rates falling, the math is bleak. France pension fund is expected to run a 13 billion euros annual deficit by 2030, rising to about 30 billion by 2045. But Macron's real problem isn't just demographics. It's the euro. Unlike the United States, which issues its own currency and can finance large deficits through the Federal Reserve, France shares its currency with 19 other eurozone nations. It can't print euros or borrow freely without Brussels approval. If France overspends, it risks violating EU debt limits and triggering market backlash. So while Americans can retire later by choice, the French may have to retire later by necessity, because they can't spend their way out of the problem. Okay, what's the real message here? France and a lot of other democracies are going to have to come to grips with political battles that are about old people asking for more and more subsidies from younger people. Politicians listen to old voters because they vote, but sooner or later, it's a house of cards and things will fall. Okay, let's dig a little deeper here. I don't want to make it sound like I'm always in favor of cutting government spending. That's not my position at all. But when it comes to government pensions and Social Security programs, things like that, something does have to give. Now, it doesn't necessarily have to be raising the age limit. It could be higher taxes. I'm agnostic on that. But France is in a position that's a little bit different from the United States because they are a part of the euro. They can't just deflate their currency. They don't really have their own currency. They're a part of the euro. Let's look at a few more facts here. So I mentioned to you It's a 13 billion euro shortfall by 2030, expected to go up to 30 billion. France's overall deficit is about 5.8% of its gross domestic product, nearly double the EU limit when it comes to what they're supposed to spend on retirement. The European Central bank controls monetary policy, so it's not as simple as a French politician saying, hey, let's go print money. It doesn't work that way. Now, here in the United States, there's a lot of misconceptions about France. There's this sense that it's a socialistic country and nobody works. And everybody sits around eating cheese and frog legs and drinking wine all day long and complaining about socialistic principles. That's not what France is like. Having spent some time there and had the good fortune to live there for a month a few summers ago, what's fascinating to me is there is a higher proportion of people in the 22 to 55 year old, 55 years of age bracket working in France in the workforce than there is in the United States. So this idea that nobody works in France is complete myth. Now, they do take their retirement very seriously. And for those of us in the United States, hearing that you can get full pension, full Social Security at age 62 sounds like a fantasy. Raising it to 64 still sounds like a fantasy, because here in the United States, it's now gone up to 67 for if you want full retirement benefits and maybe going up more. So a lot of people in the United States hear this. They think, what are they complaining about in France? Well, it is a part of their culture. And another part of their culture is taking to the streets to protest. Because what they have found is politicians will listen if they see angry mobs out there. And that is exactly what happened in this case. You had the President of France essentially saying, I can't deal with this politically any longer. I can't keep together a ruling coalition. So many voters are outraged. So many people are refusing to simply carry on. It's not tenable. So what they did is they kicked the can down the road. They said, okay, we're going to go back to where we were and then we'll deal with this issue after the next election. Okay? Now, I'm not an expert on France. Those of you watching today, whether you're on TikTok or Instagram or Facebook or X or YouTube or any other platforms we're simulcasting on. If you know more, post your comments right now. What I can tell you, in democracies around the world, there is a distribution problem. And it's not just the rich getting more and the poor getting less. It's not just rising inequality, it's not just racism. Quite often it is old versus young. And older people have more resources, more time to mobilize, to make demands among politicians, to form lobby groups. Here in the United States is the AARP at the association for the Advancement of Retirement People. And they have a lot of clout. They're very good at saying, we get increases every year no matter what. And you can cut anything else in government, but you can't cut us. And in any individual year or case that makes sense. And you go back in The United States 67 years ago, it was a tragedy what happened to older people. They were the poorest demographic, quite often to be poor in America and a lot of countries was just to be poor, to be beggars. Thankfully, we don't have that anymore. But there is increasingly extreme generational inequality in the United States and in other countries. Now, France has a much stronger social safety net. So the comparisons are not entirely apt. But at some point this could implode in France. They don't have the ability to print money, they don't have the ability to have unlimited deficits. If they want to stay a part of the euro. And leaving is extremely painful and dangerous to an economy, there are no easy solutions. One thing that is going to have to happen in France and the United States and democracies around the world is young people are going to have to start voting their interests, because senior citizens are very good at saying, I will destroy you politically if you cut back on my medical, health care, my pensions. Yet younger people typically don't punish politicians for not making health care affordable to them. It's going to have to change. Otherwise we are going to see increasingly a higher and higher percentage of, of every democracy social safety net going to people in their last 10, 15, 20 years of life. And young people, children get the short end of the stick, because last time I checked, whether it's France, whether it's Scandinavia or the United States, kids don't get to vote, therefore they don't have clout. Therefore, if it's a choice between letting someone get a full pension when they're got maybe 35 years of productive life left versus funding a kid's school, the school can just shut down. Now, again, in fairness to people in France and Europe and most Western nations, they're not shutting down schools. But it does make me wonder in the United States, as our battles over things like Social Security and who's going to pay for it if we don't actually shut down schools before we shut down benefits. And I say that not as someone who, who wants to in a knee jerk way, cut back on Social Security, but I do think we have to come up with funding mechanisms. To me, the most logical one is having a flat rate for everyone rather than a flat rate up to just $170,000 a year. Dina Johnson writes, and globally, in many communities, generational living used to be common practice and expectations. Yeah, that is the case. And even in France today, you often see multi generations living together in apartments and there's not this emphasis of, oh, everyone has to go live in the suburb, have a giant house and have an acre of land and live two hours away from every other family member. That's not the culture there. And you know what, what the result is, they tend to be happier people and live a lot longer. People in France live about seven years longer on average than people in America. So who am I to be telling the French what they've got to do? I'm not telling you what your retirement age, but at some point you are going to have to fund it.
