COLA is a 33 cent adjustment to top scale

Pickles

Well-Known Member
I’m going to walk through the contract and math so that we’re all able to be on the same page.

The following two paragraphs are the determining factors for the cost of living adjustment (COLA):
Summarizing Article 33, paragraphs 2, 3, and 4
‘COLA is based on CPI-W, published by the BLS.
COLA is calculated based on the difference between the index from May of the previous year to May of the current year.
For every 0.2 point increase IN THE INDEX above the previous index plus 3%, there is a 1 cent raise in the top scale.’

Historical CPI-W shows that May of 2020, the index was at 249.521.
The second to last paragraph on page 4 of the CPI news release for May, 2021 says
“The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 5.6 percent over the last 12 months to an index level of 263.612 (1982-84=100). For the month, the index rose 0.9 percent prior to seasonal adjustment.

So in order to calculate COLA you take the previous index (CPI20), multiply it by 1.03 to get your baseline 3% increase (referred to as 3%base), find the difference between the current CPI-W (CPI21) and the adjusted 3% increase (3%base), and multiply by 5 because each 0.2 points is one cent so each 1 point is therefore 5 cents. The formula is shown below:
3%base = CPI20 x 1.03
Raise = (CPI21 - 3%base) x 5

Factoring in our numbers:
3%base = 249.521 x 1.03 = 257.007
Raise = (263.612 - 257.007) x 5 = (6.605) x 5 = 33.025

That means that prior to the Union taking their cut, top scale will increase 33 cents. This will probably be at least a 25 cent increase.

As a side note, this post is not making any political judgments or determinations about the causes of inflation nor is it making a stance about the cut that the Union receives; this is simply an attempt to explain the contract and make an exorbitant amount of unnecessary college math courses useful to me.

I’m not sure if this site allows edits, but if it does I will correct the post if anyone points out any mistakes I made.
What will this years be?
 

Its_a_me

Member
What will this years be?
(as I stated elsewhere) COLA is easy to calculate....we just have another month's of inflation to be included in it.

COLA in our contract is determined by May 2022's CPI-W which will be released on June 10th, 2022 @ 8:30 am ET. If you plug in April 2022's CPI-W instead (which was released on 5/11/22) the estimate is:

284.575 (which is April's CPI-W number found here) - 271.52036 (which is May 2021's CPI-W number multiplied by 1.03 as the union only gets COLA when inflation rises above 3%) =13.05464. Now take that number and multiply by $0.05 and you get $0.65 COLA raise with May's inflation adding to it. If inflation remains where it is now then that number could go to $0.75.

So expect a COLA raise between $0.68-$0.75 per hour depending on May's inflation rate.
 

Jkloc420

Do you need an air compressor or tire gauge
(as I stated elsewhere) COLA is easy to calculate....we just have another month's of inflation to be included in it.

COLA in our contract is determined by May 2022's CPI-W which will be released on June 10th, 2022 @ 8:30 am ET. If you plug in April 2022's CPI-W instead (which was released on 5/11/22) the estimate is:

284.575 (which is April's CPI-W number found here) - 271.52036 (which is May 2021's CPI-W number multiplied by 1.03 as the union only gets COLA when inflation rises above 3%) =13.05464. Now take that number and multiply by $0.05 and you get $0.65 COLA raise with May's inflation adding to it. If inflation remains where it is now then that number could go to $0.75.

So expect a COLA raise between $0.68-$0.75 per hour depending on May's inflation rate.
Which will be eaten away in a year like the last one
 

Its_a_me

Member
Which will be eaten away in a year like the last one
Faster than that as the union negotiated allowing 3% inflation before they get an increase. Everyone is losing 3% a year on their wages when getting COLA. Your purchasing power is decreasing by 3% PLUS because in addition, hourlies are having to wait from June 11th until August 1st to start getting that increase--which means June and July's inflation are ignored until the next year's calculation.

Some UAW contracts (John Deere's latest one for example) adjust every 3 months when they include these 3% inflators to offset the timing penalty of COLA.

COLA is bad. Wages go up---but they go up slower than inflation. Purchasing power goes down.

If inflation holds up that means approx $0.30 of our $1.00 GWI will go towards making up for that shortfall.
 

zubenelgenubi

Living for Lunch Break
Faster than that as the union negotiated allowing 3% inflation before they get an increase. Everyone is losing 3% a year on their wages when getting COLA. Your purchasing power is decreasing by 3% PLUS because in addition, hourlies are having to wait from June 11th until August 1st to start getting that increase--which means June and July's inflation are ignored until the next year's calculation.

Some UAW contracts (John Deere's latest one for example) adjust every 3 months when they include these 3% inflators to offset the timing penalty of COLA.

COLA is bad. Wages go up---but they go up slower than inflation. Purchasing power goes down.

If inflation holds up that means approx $0.30 of our $1.00 GWI will go towards making up for that shortfall.

The point of the GWI is to keep us, more or less, up with inflation. The COLA is for times like these when inflation gets out of control.
 

Its_a_me

Member
The point of the GWI is to keep us, more or less, up with inflation. The COLA is for times like these when inflation gets out of control.
DISAGREE.

The point of the GWI is not to keep up with inflation. It is to reward work, skill, and knowledge gained during that year which makes you a more valuable employee to the employer (through not having to pay to train your replacement and get them to your level if nothing else). COLA is there to not diminish those wage increases so that competitor X's wages look more attractive for that skilled employee to take his knowledge to.
 

Jkloc420

Do you need an air compressor or tire gauge
The point of the GWI is to keep us, more or less, up with inflation. The COLA is for times like these when inflation gets out of control.
You are correct but that cola raise and are regular raise has already been wiped out, your purchasing power has been lowered
 

Pickles

Well-Known Member
(as I stated elsewhere) COLA is easy to calculate....we just have another month's of inflation to be included in it.

COLA in our contract is determined by May 2022's CPI-W which will be released on June 10th, 2022 @ 8:30 am ET. If you plug in April 2022's CPI-W instead (which was released on 5/11/22) the estimate is:

284.575 (which is April's CPI-W number found here) - 271.52036 (which is May 2021's CPI-W number multiplied by 1.03 as the union only gets COLA when inflation rises above 3%) =13.05464. Now take that number and multiply by $0.05 and you get $0.65 COLA raise with May's inflation adding to it. If inflation remains where it is now then that number could go to $0.75.

So expect a COLA raise between $0.68-$0.75 per hour depending on May's inflation rate.
Thank you.
 
Faster than that as the union negotiated allowing 3% inflation before they get an increase. Everyone is losing 3% a year on their wages when getting COLA. Your purchasing power is decreasing by 3% PLUS because in addition, hourlies are having to wait from June 11th until August 1st to start getting that increase--which means June and July's inflation are ignored until the next year's calculation.

Some UAW contracts (John Deere's latest one for example) adjust every 3 months when they include these 3% inflators to offset the timing penalty of COLA.

COLA is bad. Wages go up---but they go up slower than inflation. Purchasing power goes down.

If inflation holds up that means approx $0.30 of our $1.00 GWI will go towards making up for that shortfall.
Some people get little or no annual increases and many do not get the cost of living adjustment
 
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