Early Retirement Blog

Grounded!

Air France pilots are currently on strike, causing chaos in European skies this weekend, in an attempt to prevent their government from raising pilots retirement age from 60 to 65.

This is only the latest attempt, by the Sarkozy administration, to repeal France’s Social Security programs.  Believing that France lagged behind in growth, over the last few years compared to other European nations, because of it’s large and generous social welfare programs.   Sarkozy entered office determined to emulate America and Britain.

What Sarkozy does not understand yet, is that the imbalance in social welfare programs between France and others, was not responsible for France’s lower growth rate.   And that the superior growth rates in the U.S., Britain, and certain emerging markets, was not due to their countries having double the poverty of France.   It was simply caused by a consumption binge fueled by easy credit.

France has a high un-employment rate when compared to the rest of Europe.   As I have written before, France and every other country can reduce un-employment and stimulate their economy, by simply reducing their retirement  age.

Instead of raising Air France Pilot’s eligible retirement age from 60 to 65, they should lower it to 55.   The effect will be a reduction in the workforce, lower overall compensation costs, and new opportunities for young pilots.

All nations should be move to lower their eligible retirement age, in an effort to increase wages among workers, reduce business costs, and increase employment.  Increased wages and employment, will result in higher tax revenue, helping to offset the cost.

Update September 2010:
Two years later the retirement age for all French workers will be raised by three years.

Also Read:
France Retirement Strike