Showing posts with label Cost of Living Adjustments. Show all posts
Showing posts with label Cost of Living Adjustments. Show all posts

August 30, 2018

Don't Take Away The Breadcrumbs

So today it was announced that they want to cancel the meager cost of living adjustment (COLA) increase that federal workers were slated to get for 2019. 

A mere 2.1% increase in federal pay (compared with a more than 4% projected increase in private sector pay for 2018) is basically just enough to cover inflation for 2018 forecast at 1.9%.

In effect, without the cost of living adjustment, about 2 million federal employees end up with a net decrease of 2% in their standard of living because of inflation and no pay increase to offset. 

This is on top of the fiscal year 2011 and 2012 federal pay freeze that President Obama prior enacted. 

Why are we picking on the federal workforce when:

1) The U.S. economy is booming at an annual 4.1% increase
2) Of the $10 trillion tax cuts, 20% is being showered on the wealthiest 1%.

Le's just call a spade a spade--the pay freeze (i.e. cut after inflation) is really being driven to downsize government by driving employees out

Many of these are good people, hardworking people, and those that not only serve their nation but also sacrifice for it. 

With midterms around the corner and another Presidental election coming in a couple of years, why would you want to alienate 2 million workers instead of getting respect and even greater dedication?

As was written on this simple pair of blue jeans:
"Don't beat your croutons, you'll get breadcrumbs."  
In this case, don't beat up your federal workforce by taking their meager breadcrumbs, to begin with. 

Instead, let's show our appreciation for federal employees service to their country. ;-)

(Full disclosure: I am a federal employee and am proud to serve.)

(Source Photo: Andy Blumenthal)
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July 24, 2011

How Do You Like Those Apples?

Apple

A new proposed method for determining Cost of Living Adjustments (COLA) for people receiving Social Security and federal and military retiree pensions is called the Chained Consumer Price Index (CPI).

The Federal Times (18 July 2011) reports that "proposed COLA changes would mean smaller annuities for retirees."

Essentially, the Chained CPI doesn't just look at the change in prices for "market basket" of goods, but it "takes into account...the fact that most consumers change their buying habits when prices go up."

What this means in a simple example (exaggerated for effect) is that:

If the price of an Apple goes up from $1 to $2 instead of COLA being adjusted so that retirees get $2 for the apple, we give them instead maybe $1.25, since we ASSUME that because the price of apples went up "people are likely to buy fewer apples or switch to a cheaper fruit."

Does that sound right from your shopping experience?

Are you going to buy fewer apples or are they sort of a necessity? Further, if the price of apples goes up, is it not likely that the price of other common fruits will go up in an inflationary environment as well.

This proposal which is estimated "to save $300 billion in its first decade" sounds like quite the fuzzy economics indeed.

So how do you like those apples?

(Source Picture: here)

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