COLA: One more reason for the understated economic news

[linazelle]

Cost of Living Allowances are built in to many corporations' salary agreements for employees. It seems to me that by changing the market basket and hiding inflation and unemployment rates, BushCo is doing yet another favor for their corporate cronies. As long as CPI is understated, employers don't have to pay COLAs--or at least they pay them at a nominal rate much lower than they would otherwise have to.

Hmmmm. Wonder how much the lobbyists paid for that one?

[Warpy]

1. They went from steak to hamburger 20 years ago at Greenspan's

insistence. I'm sure they've already gone from hamburger to dog food. Now it's time to go from dog food to kibble, and from kibble there is nowhere left to go.

I don't think they've got another three years of lying aobut the CPI left. Nobody who eats, drives, lives under a roof, or gets sick believes them now, and the rage is continuing to build just under the surface.

Any Democrat who doesn't use WAGES as his wedge issue is a fool. Vote against him.

[dcfirefighter]

2. Hear, Hear!

Wages, Wages, Wages
and purchasing parity
I make a decent wage here in DC, but can't afford a house.
Good wages are great, being able to afford things is better.
If everyone's wages were raised by 25%, i'd still be unable afford a home (but all those real estate speculators would get richer, even the ones who live in their one home)
Increase employment to increase wages.
Decrease taxes on employment to increase employment. (Payroll tax, Income tax against wages)

Wage increases don't drive inflation in manufactured & produced goods: increased wages drives demand & production for these goods.

Wage increases DO drive inflation in natural goods - like the ground under real estate: no one's producing any more ground (crude oil / fresh water / clean air / etc.).

Tax the crap out of these things to 1) share the natural wealth 2) financially encourage conservation 3) efficiently use what we've got 4) shift more of production from oil/air/land to LABOR, increasing employment and wages.

[Sammy Pepys]

3. Only problem with that theory....

...is that COLA are usually locality centric. It won't be the overall CPI that determines it, but the living costs of the area that employee lives and works in. The COLA increase for an employee in Washington, D.C. will be different than one for say, Omaha, Nebraska.

[teryang]

4. This applies to social security as well n/t

[gscorse]

5. COLAs

You say that many companies build COLAs into their contracts with employees. Perhaps a few with strong unions, but fewer and fewer all the time. Social Security, yes; but COLAs for private corporations are a vanishing breed.