Question on pay raises and cost of living

[semillama]

Here's a question for the learned amongst us:

Should an employer take cost-of-living into account when calculating pay raises?

My situation is that my boss doesn't believe in giving out raises based on percentages, instead prefers to give them out 25-cent increments. I have reached a wage rate where at the level I am at, my recent raise of 50cents/hour does not cover the corresponding cost of living increase for this year (To stay level with cost of living, I would have required a 52-cent raise).

Am I justified in thinking that I am losing money in this situation? and if so, what arguments and resources should I use when presenting my concerns to my boss? (Keep in mind she has this weird thing against percentage raises).

[mondo joe]

1. I'd say the employer should take into account the MARKET, not...

I'd say the employer should take into account the MARKET, not the COLA.

The 25 cent increment thing makes no sense.

[mcscajun]

2. Once upon a time, COLA raises were fairly common

with merit raises tacked onto those.

I can recall a time when my employer (a multinational bank -- I worked in the retail sector) informed us than henceforth, COLA would be factored into the merit structure. Years down the road, a standard raise for Merit didn't amount to very much more than COLA; those were the 'compensation guidelines'. Unless you practically walked on water, you were running like Alice in Wonderland 'twice as hard just to stay in the same place.'

COLA: what a quaint notion.

[semillama]

3. They claim they aren't penalizing me

for being a higher paid employee, but I don't see how they can say that in light of the cost of living thing. The boss says she purposely doesn't do percentage raises so as not to punish the lower paid people. She says if she did 3% across the board, the lower paid people get the short end of the stick. She said it is based on the job performance for the last year and what the company can afford at the time across the board.

so basically, if you don't get a raise, you lose 2.66% of your buying power. So isn't that equivalent to a pay cut?

I just think that if you can't afford to keep up with cost of living, come out and say so. Don't act like you're doing me a favor if you give me a raise that doesn't match cost of living.