A Historical Perspective on COLA (the Cost of Living Adjustment) - Pennsylvania Capital-Star
It sure gets a lot of attention in the fall of each year, especially from seniors on Social Security, but many who are affected really have no idea how the Cost of Living Adjustment (COLA) has evolved over the years. For one thing, prior to 1975 it took an act of Congress for seniors to get a COLA increase which, as you can imagine, was usually a very politically charged event. Thereafter, cost of living adjustments were tied directly to inflation as measured by the Consumer Price Index (CPI) for American workers, thus making COLA fairly automatic. But since COLA is awarded “after the fact” (after inflation has already taken its toll) American seniors still find themselves with less buying power, especially in our current time of sky rocketing consumer prices. In this article by John Diamond appearing at the Pennsylvania Capital-Star, the author offers a historical perspective on the annual cost of living increase, explaining that next year’s COLA “primarily offsets what was lost over the previous year.” Click here to read more.