What are the cost of living?
The cost of adjusting or allowance to the cost of living (Cola) may refer to several different ways of salary or benefits, such as retirement remuneration, adjusted to take into account the increasing cost of living costs. For many years, especially for trade union workers, salaries increased in the form of adjusting the cost of living in employees' contracts. This is less common today, even in trade unions, although some claim that they have painfully injured workers or those who receive pension doses.
When the living costs are introduced, the increase in salary is often based on the consumer price index (CPI). The consumer price index is a current measurement of what goods and services used by most households cost. As the CPI rises, as was the case in mid -2000, especially with food and gasoline price, some cola workers can see how their salary will increase automatically to meet these new costs. Colas remains in place for manyAbout people who collect pensions that could have an automatic increase in social security payments to meet higher CPIs.
Many companies and some economists strongly argue against the arrangement of life costs for workers. Their argument is as follows: Increasing salaries means that society must also spend more, which can lead to a greater increase in CPI. This creates a constant battle between rising salaries and rising costs, and eventually can endanger the continuation of the company so that workers suddenly face the prospect of losing employment.
On the other hand, advocates of companies that arrange an implementation of living costs, with workers suggest that non -correcting salary based on a significant increase in CPI causes more workers to fulfill their financial obligations. Certainly there are accounts of many workers, especially those who earn lower salaries, who or pThe stacks for employment or two jobs do not adequately fulfill the basic expenses. With an astronomical increase in gas prices in 2000, some people have found that they can no longer afford to drive to their salaries because their companies did not offer any living costs of salary.
There may be another type of life costs when workers have to move to areas that are much more expensive to live. As a recognition of an employee's agreement on relocation, the company regulates the salary so that the person has roughly the same ability to buy goods and services as he or she in his former place of residence. This strategy is common in the US Army when members of armed services must move to other countries where living costs are significantly higher. In such cases, the military evaluates the CPI for the relocation area to see if employees will require another scholarship to meet higher costs. The person should be found back to a cheaper area, usual with your cola,Because it is not considered to be an increase.