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If people can't budget... why not do it for them?

 

BY TARIQ KHONJI

 

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Notice how Manama seems so busy in the first few days of the month and then becomes dead by the time you get to the middle of it? It doesn't take a genius to figure out that the reason is that most people become increasingly conservative with their spending as their salaries start to run out. They spend like crazy when they first get their wages and then horde any left-over cash until their next pay-day, which for most people, falls during the last few days of the month.

These spending patterns go virtually unnoticed in large cities but in a small place like Bahrain, it can bring things to a virtual standstill. There's been no scientific research into this theory in Bahrain to my knowledge, but I've surveyed restaurant, cafe, nightclub and retail shop managers, who confirm it. Imagine what visitors must think if they have the misfortune of landing in Bahrain on a weekday during one of these monthly quiet periods! They'd stay for a couple of days, get bored and vow never to return for as long as they live. And could you blame them?

The solution is simple. Bahrain could impose a system whereby a significant percentage of the working population gets paid on the 15th of every month. This could be applied in the government sector, which employs 13 per cent of the workforce and a few selected companies with large numbers of employees, who have a certain degree of spending power. This would help to offset wide fluctuations in spending and be better for the economy. A senior economist told me that companies would benefit because they would have a steady flow of cash to reinvest any time they wanted, instead of having more money than they know what to do with pouring in all at once. It would also make life more interesting for those of us who are not always broke by the end of the month. People go out, whether strategically or instinctively, to places which are bustling with activity. If you know the town's going to be quiet, you are more likely to decide to stay home, so the effect is multiplied.

An even better solution would be to encourage or obligate companies to pay wages bi-weekly. This system will help some people budget better and is actually the normal practice elsewhere, including the US, where some jobs even pay weekly. It's also fairer to employees, who will get paid what they deserve. Those of you even worse at math's than I am, play close attention, because I'm only going to say this once:

Let's say, for simplicity's sake, you earn BD1,000 a month, which is BD12,000 a year. If you got the same salary bi-weekly, you'd get 26 payments of BD500 each year, totaling BD13,000, or in other words, a full extra month's pay (which your employers are stealing from you)! Of course bosses will claim that these 'extra days' are all accounted for in the monthly packages, but personally I don't buy that. They would probably divide the annual package of BD12,000 into 26 and come up with BD461.538 per week. Then the cheapsters would round it down to BD460 to make it look 'cleaner' in the accounts. Whatever. BD500 looks much cleaner to me. But seriously, I really think I'm on to something here. Accounting and personal adjustments will have to be made, but if a simple thing like this can activate the economy and make a night on the town more fun, then why not?

 

tariqk1976@hotmail.com 

tkhonji@yahoo.com

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