Pension reform in disarray

Nothing can succeed without winning people's hearts

Two developed countries are undergoing social turmoil due to reforms.

Over a million people took to the streets across France last week to protest President Emmanuel Macron's pension reform plan.

In South Korea, too, tens of thousands of people gathered in Seoul over the weekend. They rallied against President Yoon Suk Yeol's labor reform proposal and one-sided diplomatic concessions to Japan.

Many Koreans may find it a little difficult to understand French people's fury over increasing the retirement (pensionable) age from 62 to 64, as Koreans cannot receive pensions until 65. After all, a recent survey shows the average Korean adult wants to work until 73.

The two countries are so different that they are not easy to compare. In France's pension system, workers pay nearly 30 percent of their salary as annuity insurance and get more than 60 percent of their working-age income in pension payments. Koreans' pension premium rate is 9 percent, and its income replacement rate is 40 percent.

The cultural, historical, and consciousness gaps between the two peoples are even wider. French people think the last third of their lives is for travel, new hobbies, and other leisurely activities with money they paid or that is being paid by their working family members. Koreans cannot save much while young, personally or institutionally, mainly because of their children. And they want to work until their health allows them to live independently from their children.

One common element of the two pension systems is their sustainability -- or lack thereof. Like other European nations, France does not accumulate pension funds, but collects premiums and pays pensions annually. President Macron says payment will exceed revenue this year and pensioners will outnumber premium payers by 2030. Korea's pension fund will dry out in 2055, five years earlier than projected. And Korea's increase in pensioners is 2.4 times faster than France's.

Some commentators here praise Macron's courage to push ahead with the unpopular reform and call for leaders to follow in his footsteps.

Nothing could be more misleading, however.

The French public's anger, of course, reflects their time-honored belief about work and life -- and social solidarity across generations. There is no generational divide in repelling the unpopular reform. Their opposition is also based on hard calculations. The opponents say the French pension system is not in a crisis and its finances will improve in a decade.

There are at least two more common things between the two countries.

First, French protesters, including unionists, are urging Macron to increase taxes on big businesses and rich individuals to plug pension holes. In Korea, President Yoon's labor reform plan that seeks to increase weekly working hours to 69 benefits entrepreneurs more to line their pockets. But Korean workers are no longer so gullible -- or willing to sacrifice their health for the sake of their employers -- to buy the government's logic for more flexible work.

Second, the French rejected Macron's top-down style, which skipped the parliamentary vote to avoid disapproval at the House. The situations here are strikingly similar. Most Koreans oppose the 69-hour workweek and Yoon's way of resolving pending issues with Japan. Still, the president and his administration will not budge, packaging them as "decisions for the future." Are these leaders halfway across the globe forgetting they are elected officials, not monarchs?

It's true Korea's low birthrate and rapid population aging pose more serious problems than any others, including France. To borrow the idea from the French people, however, the solution lies not in paying more and getting less while fattening employers' pockets. The answer could be how to force businesses to make people want to bear and raise children by increasing their wages and giving them more time.

Both French people and Koreans want their presidents to focus on what their people think and want at present, not go a few centuries ahead of their time.

No ambitious projects can succeed without winning the hearts of the people first.

Source: Yonhap News Agency

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