There have been several voices recently calling for blanket salary increases for public service employees to cover the increase in the cost of day-today essentials. With rents rising to unprecedented levels and the majority of Saudis yet to own their own homes, the chunks taken out of their salaries by greedy landlords leaves little left in the wallet for anything else. But history teaches us that blanket salary increases do not always have the desired results. The few times that increases were announced were quickly followed by three distinct changes in character. One was that the spending habits of Saudis changed and not for the better. The discipline of wise spending by families following the economic downturn of the 1980s was suddenly removed by an announced salary increase. Subsequent increases in salary followed a similar pattern. Saudis who had been content to live within their means were slowly being drawn into the current of unchecked consumerism as the doctrine of “buy, buy, buy” became the theme in many households. Families who were content to eat out once a fortnight were suddenly splurging their new-found wealth and visiting expensive restaurants twice a week. Cars and jewelry were also sought after as the dam of spending restraints had somehow broken. Homes were refurbished or bought, staff was recruited and the previously prudent household budget somehow flew out the window. Spending was not just restricted to purchases of luxury items. Travel became another option for many who spent lavishly on vacations to locations once deemed out of reach. There was a reason to be optimistic as the pay raises promised greater wealth! But such spending comes with a price. When spending patterns change, they soon become a habit. And to feed this habit, many Saudis found themselves spending more. This reached the point of spending more than they earned and that spelled disaster for many who find themselves today saddled with grueling debts that continue to take their toll long after the glitter of purchases has faded. The other change that followed was that the increase in the salaries of government employees drew hundreds of thousands of citizens from rural areas to urban centers. Since most government departments are headquartered in the larger cities, residents of rural areas moved for better prospects. This massive migration came at a price to the already overloaded infrastructure. Although I do not know of any study that has covered this aspect of human migration as a result of government pay increases, the obvious results led to housing become scarce and rental prices shooting up. The water supply was often interrupted as was electricity during the hot summer months. Then there were the traffic jams on roads not built for such an increase in the population. Finally, there was greed; a voracity by sellers and traders to take advantage of the bounty of the government toward its people and to ensure that most of this bounty was pocketed by them. Prices began to shoot up without rhyme or reason and maintained their upward spiral to the point where they obliterated any positive effects of salary increases. Buying power kept shrinking until it reached a negative balance. The depressing aspect of this is that those inflated prices continue to remain in force for certain items, while salaries have been static for several years. Several ministries were flooded with complaints by irate residents about such unjustified avarice. The media was relentless in highlighting the cause of the overwrought consumer in the face of such greed. Grassroots campaigns through social media were initiated, with a degree of success, to boycott specific traders and merchants who took advantage of the government's generosity to fill their own coffers. Unless remedial steps are taken to address the earlier consequences, any changes in salary may have little effect on an individual's bank balance. So while people clamor for pay increases, they must also be aware of the pitfalls.
— The author can be reached at [email protected]. Follow him on Twitter @talmaeena
