The riots in France should serve as a warning to governments around the world to inform their citizens about the looming crises in their social security systems.
Most major developed countries are confronted with burgeoning populations of retired workers and workers approaching retirement age. In most such countries, the government-sponsored social security systems already are stretched to near breaking point.
In most cases, the problem is there are fewer workers supporting more retirees. Tax levels in many countries already are burdensome, but will have to rise higher if retirement benefits are to be maintained.
The options are few: raise taxes further, delay retirement age, cut or at least slow the growth of government-provided retirement benefits, and increase the role of personal or employer-sponsored pensions. Most likely a combination of all of these will be necessary.
Yet few countries have made any effort to explain the situation to current workers or to retirees. In most cases, including the United States, France, Germany and Japan, the government has been all but silent about the situation.
In France, for example, there was little public discussion of the dire situation of the social security system, or the deficits of the retirement systems for public sector workers, or how much of the burden for these systems the private sector employers and workers are bearing.
Little effort was made to justify the need for cutbacks in terms the public sector workers could understand - the burden on taxpayers in general, the impact on French competitiveness and hence employment in an intensely competitive world, the heavy burden that would be left to their children.
Rather, the discussion was in terms of the need to cut the deficit - a goal with which few workers can identify.
No wonder the public sector workers went on strike. They were faced with cuts in benefit programs that seemed merely arbitrary.
Similarly, no one has clearly explained to retirees in the United States why changes are needed in the Medicare system. No one has explained the Medicare trust fund is rapidly running out of money, and Medicare recipients pay only about 30% of the costs of their hospital coverage - workers pay the rest.
No one has explained to retirees that the average Social Security recipient receives back his or her lifetime contributions, plus interest, in a little over three years. From then on, the average retiree is being supported other workers.
The time to start educating both workers and retirees about the fiscal realities of national social security systems is before they are faced with imminent crisis. It will take time for the message to sink in, and it will not sink in at all if one group of politicians is saying there's a crisis, and another group is saying there's not.
If governments do not soon begin to educate retirees and workers about the financial condition of their social security programs, about how the tax burden to support such programs will sap economic vitality in the future, retirees and workers will resist when changes no longer can be postponed, and social unrest like that in France will become common.
The time for such education efforts to begin is now. Many retirees and workers regard these benefits almost as birthrights, and it will take time to persuade them change is inevitable, and will only be worse if postponed.
Governments and opposition parties must stop using these programs as political footballs.
