cost of living allowance--COLA

[ups clerk]

I know the economy is supposedly improving, but I can't believe when it was at its lowest, that we didn't recieve a COLA raise.
Anybody hear if and when,--stress on the IF, we will get one? Just curious.

 

[UPSAOT]

This made me LOL. Maybe because I'm not union and as far as I know they stopped doing that back in the early 90s for non-union employees.

 

[brett636]

Its in the contract that the COLA raise is based on how much the consumer price index(CPI) is increased above a set threshold(I cannot remember what that threshold is). The last time union employees recieved a COLA raise was 2006 and it was .12/hr. We would have recieved one in 2008 if I am not mistaken, but that was a contract year, and on contract years the COLA raise does not apply. I would not expect a COLA raise anytime soon as prices have been deflating or holding steady since 2008 and the raise is only based on the previous years May reading of the CPI versus the current May reading.

 

[JonFrum]

If you're covered by the National Master Agreement . . .

There was no provision for a COLA during the first 19 and 1/3 months of the Contract (Dec. 19, 2007 thru July 31, 2009.)

No full-timer will get a COLA during his first 2.5 (now three) years.

No part-timer will get a COLA during his first five years. (Many full-timers were originally part-timers, so one progression may add to another.)

No COLA will be paid in any year in which the official Department of Labor Cost of Living Index increases less than 3.5% or so.

The only COLA we actually received in recent memory was 12 cents per hour in 2006.

ARTICLE 33. COST-OF-LIVING (COLA)
All seniority employees who have completed their appropriate wage progression schedule shall be covered by the provisions of a cost-of-living allowance, as set forth in this Agreement.

Employees who have not completed their appropriate wage progression on the effective date of a COLA increase, shall receive the adjustment on a prospective basis on the date they complete their wage progression schedules.

The amount of the cost-of-living allowance shall be determined as provided below on the basis of the “Consumer Price Index for Urban Wage Earners and Clerical Workers, CPI-W (Revised Series using 1982-1984 Expenditure Patterns), All Items (1982-84 = 100), published by the Bureau of Labor Statistics, U.S. Department of Labor” and referred to herein as the “Index”.

Effective August 1, 2009 and every August 1 thereafter during the life of the Agreement, a cost-of-living allowance will be calculated on the basis of the difference between the Index for May 2009 (published June 2009) and every May thereafter, and the base Index for May 2008 (published June 2008) and every May thereafter, as follows:

For every two tenths (0.2) point increase in the Index, over and above the base (prior year’s) Index plus three percent (3.0%) there will be a one (1) cent increase in the hourly wage rates payable on August 1, 2009 and every August 1 thereafter. These increases shall only be payable if they equal five cents ($.05) in a year.

All cost-of-living allowances paid under this Agreement will become and remain a fixed part of the base wage rate for all job classifications. A decline in the Index shall not result in the reduction of classification base wage rates.

Mileage paid employees will receive cost-of-living allowances on the basis of .25 mills per mile for each one (1) cent increase in hourly wages, subject to the threshold set forth above.

In the event the appropriate Index figure is not issued before the effective date of the cost-of-living adjustment, the cost-of-living adjustment that is required will be made at the beginning of the first (1st) pay period after the receipt of the Index.

In the event that the Index shall be revised or discontinued and in the event the Bureau of Labor Statistics, U.S. Department of Labor, does not issue information which would enable the Employer and the Union to know what the Index would have been had it not been revised or discontinued, then the Employer and the Union will meet, negotiate, and agree upon an appropriate substitute for the Index. Upon the failure of the parties to agree within sixty (60) days, thereafter, the issue of an appropriate substitute shall be submitted to an arbitrator for determination. The arbitrator’s decision shall be final and binding.

 

[Just Numbers]

Looks like the cola will go the way of the clipboard.

 

[brownmonster]

Here I was planning next years budget with the extra 12 cents. Guess I'll have to cut back on non-essentials.

 

[FracusBrown]

You are actually ahead of the game if you don't get a COLA raise. You only get COLA when the cost of living out paces the cost of living. Getting it only catches you up to the current cost of living. If you don't qualify for one, it means your pay raises are out pacing the cost of living, thus raising your standard of living (marginally).

If you get a 3% raise and the cost of living increases 2.5% you are .5% ahead of the cost of living
If you get a 3% raise and the cost of living increases 3.5% and you then receive a .5% COLA you just break even with the cost of living.

 

[browniehound]

You are actually ahead of the game if you don't get a COLA raise. You only get COLA when the cost of living out paces the cost of living. Getting it only catches you up to the current cost of living. If you don't qualify for one, it means your pay raises are out pacing the cost of living, thus raising your standard of living (marginally).

If you get a 3% raise and the cost of living increases 2.5% you are .5% ahead of the cost of living
If you get a 3% raise and the cost of living increases 3.5% and you then receive a .5% COLA you just break even with the cost of living.

Excellent point!

 

[JonFrum]

A wage raise isn't a raise at all in any year that it is treated as the bottom part of a COLA payment. Instead of getting a wage raise and a COLA payment, you are effectively just getting a COLA payment.

This is because the COLA formula does not fully compensate for the increase in the cost of living.

There is also months' delay before the COLA payments begin, so you are loosing ground there too.

 

[ups79]

don't complain-us on social security are not getting a cola also. if there is no increase in the cost of living you should not need a cola.

 

[SWORDFISH]

ya, what Jon said.

 

[grgrcr88]

A wage raise isn't a raise at all in any year that it is treated as the bottom part of a COLA payment. Instead of getting a wage raise and a COLA payment, you are effectively just getting a COLA payment.

This is because the COLA formula does not fully compensate for the increase in the cost of living.

There is also months' delay before the COLA payments begin, so you are loosing ground there too.

In the years where a cola raise has been given, it has always been on top of the contractually agreed upon raises. How is that losing ground?

 

[JonFrum]

Suppose someone owed you $5. And they later owed you $10.

They pay you the original $5.

When you ask them for the other $10 they say, "Well, I already paid you $5. Here's another $5 to make $10. We're even.

Wouldn't you feel you lost ground?

[I'm not claiming UPS is cheating us. I realize the "Yes" voters, as always, approved the COLA formula, and UPS is just following what was negotiated. My point is the formula doesn't fully compensate us for inflation, and so we loose ground every year.]
---
UPS79, you won't get a cost of living increase if the actual cost of living doesn't increase. However Social Security recipients have done very well over the years as this chart shows:
http://www.ssa.gov/OACT/COLA/colaseries.html

 

[Raw]

You are actually ahead of the game if you don't get a COLA raise. You only get COLA when the cost of living out paces the cost of living. Getting it only catches you up to the current cost of living. If you don't qualify for one, it means your pay raises are out pacing the cost of living, thus raising your standard of living (marginally).

If you get a 3% raise and the cost of living increases 2.5% you are .5% ahead of the cost of living
If you get a 3% raise and the cost of living increases 3.5% and you then receive a .5% COLA you just break even with the cost of living.

What if you get a 3% raise and the cost of living decreases .005%?
What if you get a 3% raise and the cost of living stays the same?
What if you get a 3% raise and the cost of living increases three-fold?..........

 

[FracusBrown]

It doesn't matter what amount you get. What matters is what it will buy. If you make $30 an hour and that $30 will buy exactly one case of beer, then you get a 3% raise. Now you make 30.90 per hour. Due to infaltion (cost of living) the case of beer goes up 5%. The case of beer now costs $31.50. You can't buy a case of beer with one hours pay. You are losing ground. You have more money, but its buying power is less.

 

[brownmonster]

It doesn't matter what amount you get. What matters is what it will buy. If you make $30 an hour and that $30 will buy exactly one case of beer, then you get a 3% raise. Now you make 30.90 per hour. Due to infaltion (cost of living) the case of beer goes up 5%. The case of beer now costs $31.50. You can't buy a case of beer with one hours pay. You are losing ground. You have more money, but its buying power is less.

Good analogy but a case of COLA would have made more sense.

 

[Anonymous 10]

It doesn't matter what amount you get. What matters is what it will buy. If you make $30 an hour and that $30 will buy exactly one case of beer, then you get a 3% raise. Now you make 30.90 per hour. Due to infaltion (cost of living) the case of beer goes up 5%. The case of beer now costs $31.50. You can't buy a case of beer with one hours pay. You are losing ground. You have more money, but its buying power is less.

Then you go to one of those places where you brew your own beer I've done it and it's pretty good and cheap.