France Pension Reform: Women (Still) Working Longer for Less Pay
Authored by Hannah Kurth, edited by Lauren Alani
A collaboration between PULSE and Healthcare Businesswomen’s Association (HBA) Europe
What’s Going On
- Because of persistent pay gaps, unequal distribution of home and caregiving tasks, and the “motherhood penalty,” French women work longer and have lower retirement pensions than men.
- Faced with an aging population, France reformed the financing of “sécurité sociale” on April 15. Yet, this latest retirement reform fails to address equity gaps for women.
- Women must influence current and future legislation to ensure it is equitable and reflects their contributions to society.
If I Could Turn Back Time
Much literature exists on the continued inequalities between women and men, both in the workplace and at home. Inequalities were exacerbated by the COVID-19 crisis, with many couples succumbing to “gendered” strategies to manage work and family life. This resulted in poor outcomes for women’s well-being and job performance.[1]
Women worldwide are still carrying out most of the household chores and are disproportionately caring for children and elderly parents. In France, the paternity leave policy enables men to have only one fifth of the total time allocated for parental leave.[2] After a divorce or separation, French women more often assume custody of the children, and have a higher risk of economic precarity.[3]
Mothers have a higher incidence of “fractured” careers versus men due to time taken for raising children. They often have less linear career paths, take on more part-time work, and take shorter-duration contracts.[4],[5] This contributes to women having lower salaries and lower-grade roles (i.e., the “motherhood penalty”[6]).
Against All Odds
France’s gender pay gap is currently 15.4 percent, above the European average of 12.7 percent.[7] According to the Healthcare Businesswomen’s Association (HBA) 2023 Gender Pay Gap report, in life sciences the French gender pay gap is slightly lower at 11.6 percent, however the gender bonus gap is much greater at 36.7 percent.[8]
Numerous laws have been implemented in France to ensure parity in politics and corporations, and to combat sexual and gender-based violence. The Copé-Zimmermann Act (2011) and the Rixain Act (2021), which impose quotas for women among boards, directors, and corporate management bodies, have been a great step in addressing inequities for women. However, inequalities persist.
Women hold a third (34.6 percent) of senior and managerial positions in France, lower than the United Kingdom (36.8 percent) and the U.S. (42 percent).[9] Only three companies (7.5 percent) out of France’s 40 largest companies have a female general manager,[10] reflecting a persistent glass ceiling.
In the World Economic Forum’s Global Gender Pay Gap Index, France is ranked first in “educational attainment for women,” yet only 40th in “economic participation and opportunity”.[11]
Why are French women, who have similar educational opportunities as men, still earning less?
Wouldn't It Be Nice?
French people must work a minimum number of years (43) to be eligible for retirement pensions. Social inequity and gender pay gaps lead to an accumulation of differences in wealth over time, leading to a large gap in life-long earnings.
The base pension of women in France are currently 39 percent less than men,[12] due to pay gaps, career interruptions, and the underrepresentation of women in senior leadership and high-renumeration industries such as technology (17 percent) and finance (10 percent in private equity funds).[13]
Career interruptions also require women to work more years than men. On average, French women retire at a later age versus men (seven months),[14] largely due to interruptions in their careers for caregiving (children and aging parents).
In summary, French women work longer for less pay.
I Can’t Get No…Satisfaction
Earlier versions of the pension law did not address the current inequities of women, and even exacerbated them. The postponement of the legal age of retirement to age 64 increased retirement inequities between women and men, with the gap in retirement age widening (with women working on average 9 months longer than men). Economist Michael Zemmour calculated that 60 percent of the budgetary savings from the reform would have been carried by women.
At the end of January, the Minister for Relations with Parliament, Franck Riester, admitted that women would be penalized by the postponement of the legal retirement in the reform and said “On demande un effort à tout le monde, y compris aux femmes” [Everyone is asked to make an effort, including women].[15] Given current pay and pension gaps in addition to a disproportionate share of household and caring duties, one might wonder why Riester specifically called out women to make an effort, effectively enabling the continuation of unequitable policies.
Hit Me with Your Best Shot
Due to criticisms of the law and its impact on women, the final reform incorporated three amendments to help address inequalities for women. These amendments were largely driven by Laurence Rossignol, Vice President of the Senate.[16],[17],[18]
- (Partial) inclusion of parental leave in retirement work minimums: At least half the time spent raising and/or adopting a child will contribute to minimum working years
- Minimum pensions raised to 85 percent of the legal minimum pay (“SMIC”) for those with “full” careers, i.e., have reached the minimum 43 years working full-time at minimum wage
- Pension premium up to 5 percent for mothers who have a “full” career by age 63 (i.e., one year before the legal minimum retirement age)
The first amendment (parental leave contribution to pension scheme) was made following extreme criticism of the reform’s impact on women. The amendment only partially addresses the inequities faced by women, as only half the time spent parenting will count towards retirement.
The second measure (minimum pension) has a theoretical benefit to women, because three-quarters of people with low retirement pensions are mothers.[19] However, this would not benefit those with “incomplete” careers (approximately 20 percent of women),[20] which is often caused by career interruptions for raising children,[21] nor those working part-time. It is estimated that few people (less than 5 percent of all new retirees[22]), and certainly even fewer women (who hold 4 times as many part-time positions5), would benefit from this measure.[23]
The third amendment (pension premium for women) is a reduction from the previous parental pension premium (10 percent),[24] and was reincluded as a political compromise. According to Senator René-Paul Savary, this premium will impact only 30 percent of women in each generation. What about the vast majority of women (both with and without children) experiencing compensation inequalities in society?
Senate Vice President Laurence Rossignol notes that by excluding all women who are not mothers from this amendment, the legislation is not addressing the gender pay gap.[25] Thus, the scope and amount of such a premium is insufficient to close the salary and pension gaps for women overall.
Further, none of the amendments address the root of the gender pay gap and gap in lifelong earnings.
From a budgetary perspective, equal pay would benefit all by bringing in more funds into the retirement system. According to one union and the feminist collective “NousToutes,” simply aligning women’s salaries to those of men’s would bring 5.5 million euros into the “Caisse Nationale d’Assurance Vieillesse” (France’s retirement fund), a sum that would address nearly half of the current deficit.[26]
In summary, while the amendments help reduce the extent of inequalities for women vs. men in the original bill, they are insufficient.
They Don’t Really Care About Us
The pension reform law included an objective to halve the pension gap by 2027, and to completely close the gap by 2050.[27]
Carole Bonnet, Director of Research at INED (Institut National d’Etudes Demographiques) and expert in economics of retirement system, reports that the pension gap will not be closed by 2065.[28]
The French government estimates that the overall pension gap will have reduced to only 17 percent by 2035 and seven percent by 2070, missing their own objective.[29]
Given family and marital trends (fewer couples, high rates of divorce, fewer long-term marriages, and more same-sex couples), it is even more important that women - individually - are ensured equitable salaries and pensions.
Economist Rebecca Amsellem of the feminist group Les Glorieuses recommends that concrete measures be put in place today, to avoid having to wait until 2234 to see the start of salary equality.[30]
(Wo)man In The Mirror
Let this be a lesson for the future: when public policy is being defined and legislation debated and enacted, it is an opportunity to make strides in the pursuit of equity for women.
In the Skimm 2023 State of Women Report, when women were asked to choose which parts of their lives they felt they could control, only 16 percent of millennial women said, “legislation that impacts me.”[31]
The recent experience of the French reform provides a call to action for women worldwide to get further involved in ongoing legislation, and to demand consideration of their needs by their respective governments.
Perhaps someday, women will finally receive from society what they contribute to it.
“Never forget that it only takes a political, economic or religious crisis for women’s rights to be called into question. These rights can never be taken for granted. You must remain vigilant throughout your life.”[32]
- French writer Simone de Beauvoir
Hannah Kurth is a dual-national (American/French) living in Paris, France since 2008. She has nearly 25 years’ experience leading commercial insights and recommendations for strategic decision-making within the pharmaceutical, biotech and medical device industries. Hannah is an economist by training (Boston University, London School of Economics), avid runner, cinephile, and champion of women’s advancement.
Lauren Alani is the Head of Intelligence and Market Research at HBA and Director Digital Innovation at Seuss+. An experienced writer, editor, and speaker, she leads on developing data and insights that add value to discussions on equity and to evaluate the impact of change measures and policies. She also leads on the HBA European Gender Pay Gap Report in collaboration with Aon.
PULSE is a Paris-based networking group founded by Hannah, dedicated to connecting people in the pharmaceutical, biotech and medical device industries in France. PULSE networking evenings are held every two months in central Paris. For more information and/or to join PULSE, please visit here.
The Healthcare Businesswomen’s Association (HBA) is a global non-profit organization comprised of individuals and organizations in healthcare committed to:
- achieving gender parity in leadership positions
- providing equitable practices that enable organizations to realize the full potential of women
- facilitating career and business connections to accelerate advancement
The HBA accomplishes its mission through strong business networks, education and leadership development, and global recognition of outstanding individuals and companies.
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