Weekly pay has more benefits
It puts billions more into workers’ hands yearly and can significantly boost the economy.
SOME things were quite bad in those good old days, especially if you worked for the Government. I remember finishing my Diploma of Education and being posted to a school on the outskirts of Kuala Lumpur.
The problem was that for some reason it took the Education Ministry forever – not really, but three months is a long time when you have no money in your pockets – to process your details for payment. You got paid only after that.
That was no fun for us young graduates because we had very little money in our pockets. I used to live hand-to-mouth in those few months, taking whatever little I could from the precious monthly household money.
Often, there was just enough money for some food during work. Bus fare, at least one way, was taken care of because I used to take the school bus to school – one teacher among all the students.
They made me in charge of the school bus because I was the teacher using it the most, I suppose.
Diligently, I collected money for its use, eventually getting some surplus over the running expenses of the bus. I was told that had not happened before, a turnaround of sorts!
One day, I went for a seminar. Some teachers decided to go for a drink after work – yes, teachers do drink and they do have a life.
I had no choice but to follow because, well, I was getting a lift back home from one of the teachers.
And yes, embarrassingly, I did not have money to pay for my drinks and had to resort to quietly asking the teacher who was going to take me back to pay for me first, promising to pay him back the next day.
He, however, dithered, waiting for someone else to pay for the whole bill instead. And all because the Government took, not one, not two, but three months before paying me.
I suppose this scene is repeated all the time for those entering the job market at any time.
If they are from somewhere else, they have to pay an advance on rental, they need to get some money to feed themselves and for transport etc. for one whole month at least.
But really, that need not be the case. I have never understood why workers have to work for one full month before they get paid.
Why does one have to work first and then get paid a month later?
Ideally, you should do your day’s labour and at the end of the day you should see, touch and feel your reward or at least be able to go some place, stick a card into a machine and then see, touch and feel what is rightfully yours and spend it if you so wish.
Alright, I hear you. Daily wages may be just a bit too much, but why can’t we at least see the reward a week later? Why do we have to wait one whole month? Around the world, in many countries, people are paid weekly wages.
The meaning of TGIF (Thank God it’s Friday to the uninitiated, and for those not yet on a five-day week like many private sector employees, our hearts go out to you – we did write about that) becomes more meaningful when you have actually earned the money you are spending that night at some pub, restaurant or teh tarik stall.
It could be in your pocket or in your bank but the point is you already have it.
Sometime back, there actually was talk that we may move towards weekly wages but somehow, that move just faded away. We suspect the employers had a lot to do with it.
They are a very powerful lobby and they certainly would not have been very keen to give up the privilege (some of them like to think of it as their right) to use our money for up to a month.
Do the math or arithmetic, and you will know what I mean. If you earned RM9,000 a month, that’s RM300 a day. For everyday they don’t pay you, they are using your RM300. In a month that averages out to half your pay, RM4,500.
That gets played out from month to month and therefore, they use your RM4,500 for one whole year without paying you a sen in interest.
For the mathematical purists out there, I know this is an estimate, but it is a damn good one and handy too without compounding complications.
Multiply that by 12 million workers and let’s use an average salary of RM5,000 a month instead and what you have is Rm30bil (12 million x 2,500) a year of workers’ money that employers (the largest employer is the Government of course) use without paying any interest on them.
If workers charge an interest rate of 6% a year for the use of their funds, that works out to Rm1.8bil. That means, the yearly subsidy, yes, subsidy, that workers give their employers is that much and it becomes clear why the employers, including the Government, don’t want weekly pay.
Arguments that weekly pay will lead to bad money management etc. are just so much bull because once salaries are paid weekly, rentals etc, too, can be billed on a weekly basis and it is much easier to handle dayto-day cash expenses.
But the clinching argument is this: If you pay salaries weekly you put Rm30bil a year more into workers’ hands instead of leaving it with the employers. It may not be too much of a stretch to say that this could give a significant boost to spending and the economy.
Now, all it needs is for the Government to do the needful. Giving back Rm30bil every year which rightfully belongs to the workers is much better than giving RM500 as a one-off payment to poor households. And it is far more equitable, too. > Independent consultant P. Gunasegaram firmly believes in the time value of money – money now is more valuable than money later. If you use it badly, that’s your fault of course.