By Ray Birch
MADISON, Wis.–It’s Leap Day. For credit unions, their members and many other people around the world, it’s a once-every-four-years event with implications on everything from interest paid on deposits to “free” subway rides to possibly even a small boost to GDP, two economists told CUToday.info.
Plus, it also comes with an interesting history and some myths and misconceptions.
Steve Rick
TruStage Chief Economist Steve Rick said there are three areas within credit union operations where Leap Day can have a noticeable impact.
“The extra day this year can lead to erroneous interest calculations if you fail to account for the 366 days, instead of the normal 365 days,” Rick said. “The extra day, too, allows for an additional day to make sales of goods and service, such as car sales, appliances, furniture. This will mean slightly more gross domestic product, GDP, this February compared to last. And, finally, the extra day will mean one more day of interest revenue, another day of interest expense and if revenue exceeds expenses, the means another day of interest margin.”
Other Leaps
Beyond the credit union specific affects, there are numerous other ways all Americans will feel Leap Day, according to Michael Moebs, economist and chairman of Moebs $ervices, who shared some historical insights into the extra calendar day.
First, beyond some of the more obvious financial benefits of the bonus day, Moebs noted there are other benefits, as well:
- Those with a parking pass get to park a day without paying
- Anyone with a public transportation pass gets a free day commuting
- Renters get an extra day to pay the rent
- Health Club members work out longer without paying for a day
‘Setting Something Straight’
But before getting that extra day at the health club, there was a lot of history, Moebs shared.
“The use of idioms, such as ‘setting something straight’ emanated from Pope Gregory and his scientists setting the calendar straight in 1582,” said Moebs. “That was the year the Gregorian Calander leapfrogged over the Julian Calendar and made time straighter. Julian, as in Julius Caesar, set up his time standard in 43 BC to make sure his legions were on time for battle.”
Michael Moebs
Moebs noted that time is based on lunar periods.
“Some religious holidays are based on the full moon after the spring equinox,” explained Moebs. “The earth’s rotation around the sun is not quite 365 days. It is a bit more, like six hours more. So, adding a day or leaping forward one day every four years corrected this.”
Correction Needed
But Moebs said the correction is not perfect.
“There are a few minutes missing, so Gregory’s boys devised a 400-year plan based on the numerical basis of four and 100,” Moebs said. “This resulted in some end-of-century dates in 1700 and 1800 not having a Leap Day, while others do have a Leap Day, like 1900 and 2000.”
Facts & Misconceptions
Moebs shared some of the “interesting results” from Leap Day, as well as some of the misconceptions about the extra 24 hours:
- The U.S. President is elected every Leap Year since the U.S. started in a leap year 1776. “This is not correct since to get the proper Leap Year it must be divisible by four and not 100. It is better to say the president is elected every four years and leave leaping out of it,” Moebs said.
- You make more money in a leap year. “That is not completely correct. If one is an hourly paid worker, then it is correct, but if one is a salaried worker, you work a day longer and you do not get paid more in a leap year,” he said.
- Depositories pay more interest on your account in a leap year. “That is almost true. Most financial institutions’ operating systems calculate based on the number of days in a year and adjust for one more day in leap years,” Moebs said. “However, there are some FIs that make every interest calculation, whether paid for a deposit or charged for a loan, based on 30 days in every month or 360 in a year. Archaic, but still done. The guilty will go unnamed.”
- You get an extra vacation day in a Leap Year. “You might. More progressive firms will give an extra paid time off day in a Leap Year. Yet this practice is not often done, but is growing,” Moebs said.
- In Ireland and Britain, it is tradition that women may propose marriage only in a Leap Year. “That ended over 700 years ago and more than likely was a folk tale then, too,” Moebs said.
- There are about four million people in the world who are Leap Day babies. “Do their parents celebrate their birthdays every four years? Let’s hope not,” Moebs said.