1995, 2010, 2019… what is the effect of the big strike on the French economy?
Unions hope to mobilize widely against the government’s proposed pension reform. Take a look at key past mobilizations and their economic consequences.
The mobilization against the top pension reform starts this Thursday, January 19. Unions hope to mobilize widely against the government’s bill, which has been largely rejected by the French. And above all, I hope that January 19 will only be a warm-up phase for a long-term movement that will bend the executive branch. But what are the consequences of a major social conflict for the French economy? Let’s take a look at the great mobilizations of the last thirty years.
• 1995: Mass strikes against the Juppé plan
The great mobilization of 1995 remains with all union leaders. Jacques Chirac’s then Prime Minister, Alain Juppe, presented a recovery plan for Social Security in November 1995, in which we find a reform of pensions, which specifically seeks to align the duration of public contributions with private pensions. The “Juppe plan” leads to mass strikes – transport is paralyzed for almost a month. According to the police, the number of demonstrators in the streets continues to grow, reaching at least 1 million people on December 12.
France is blocked. At that time, neither working remotely nor shopping on the Internet was possible. However, the economic consequences are limited: according to INSEE, these major strikes cost 0.2 points of GDP in the fourth quarter, but the lost activity is paid for in the following quarter. Some sectors are at a standstill, but they are not necessarily the most important in terms of GDP, and recover lost activity when the country restarts. Except for sectors that have not recovered all their losses, such as trade, tourism or hotels and restaurants.
• 2010: Demonstrations against the Woerth reform
In 2010, another pension reform mobilized against it. This time it is the government of Nicolas Sarkozy: the reform carried out by Eric Woerth, who was the labor minister at the time, specifically intends to lower the legal retirement age from 60 to 62. The social reaction is epidermal: according to police figures, the number of demonstrators is higher than in 1995. We passed a million demonstrators several times – October 12, 2010 will be the culmination of the movement, with 1.23 million people on the streets.
The reform, above all, led to major strikes in certain strategic sectors: SNCF, road hauliers, garbage collectors… Blockages were also organized at oil refineries and fuel depots, causing numerous fuel shortages. Again, the economic consequences are mirrored for the French economy: INSEE estimates that mobilization was between 0.1 and 0.2 points of GDP at the time, but activity recovered its trajectory in the months following the move.
• 2018: “interim” strike by SNCF
In the spring of 2018, Emmanuel Macron, newly elected the previous year, launched reforms of the SNCF and the civil service. In response, widely mobilized railway workers went on “intermittent strike” from April, meaning a two-day strike was worked for three days. Train traffic in France has been severely disrupted for three months, to the detriment of certain sectors such as tourism or the hotel industry. But the strike ultimately cost just under 0.1 percentage point of GDP in the second quarter of 2018, according to INSEE data from the summer.
• 2018-2019: unprecedented movement of “yellow vests”.
On Saturday, November 17, 2018, the “yellow vest” movement begins. This is an unprecedented mobilization outside the trade unions. The demonstrations bring together 290,000 people, but they are not really the heart of the movement. There are a large number of gatherings scattered over time and space, such as ring road occupations, road closures, or “free toll” operations. It is difficult to estimate the actual number of participants: the study estimates that around 3 million French people took part in at least one action.
Economic consequences are also difficult to predict. Unlike the traditional Tuesday or Thursday reunions, the rallies were held on weekends, making them less visible. Again, it was mainly sectors such as small trade or tourism that were affected – demonstrations and blockades, which may have additionally suffered, were concentrated in commercial areas and city centers. But according to INSEE, the move ultimately cost only 0.1 points of GDP in the fourth quarter of 2018, the peak of the move.
• 2019-2020: points against retirement
It is pensions that are still kicking the powder: Edouard Philippe’s government wants to abolish special schemes and move to a points-based pension. In December 2019 and January 2020, large demonstrations are organized, with a maximum of 800,000 people. Strikes lasting more than a month, especially in SNCF and RATP, also block certain sectors. According to INSEE, mobilization against this reform project (suspended due to the health crisis) cost 0.1-0.2 points of GDP in the fourth quarter and was subsequently recovered.