Cost of Living Adjustment

A COLA raises pay with an inflation index; Social Security's 8.7 percent 2023 raise is the pattern every escalator follows.

Overview

Union multi-year contracts build escalators tied to the CPI, Social Security adjusts automatically each year, and some multinational employers maintain country-specific differentials for expatriates. Distinct from inflation COLA is geographic cost-of-living pay, the extra for posting somewhere expensive, which remote-work policies now entangle: some firms cut pay for moves to cheaper areas, others abolished location adjustments entirely and pay the same everywhere. A COLA preserves purchasing power, it is not a real raise. Examples cited are public record.