It starts with the Bureau of Labor Statistics (BLS) formula used now to measure price increases and set the Social Security COLA. BLS uses the CPI-W index, the Consumer Price Index for Urban Wage Earners and Clerical Workers, hardly a correct measure of price inflation for older Americans struggling with higher health care costs as they age, plus increasing costs for basic needs like food, gasoline, heating fuel, clothing, and rent. While some costs have pulled back recently, they remain higher on a year-over-year basis.
But wait, as they say in the TV ads, didn’t a 3.6 percent Social Security COLA just take effect in January, 2012? Clearly a “catch-up COLA,” after two years with no COLA, this COLA will be worth just $43 each month to the average retired worker on Social Security, increasing their check to just $1,229 per month. The annual COLA increase total for 2012 will be $516 for the average beneficiary. By adding 2012 to the previous 24 months, you get a clearer picture of what seniors actually got thanks to the flawed CPI -- $516 total increase over 36 months, or just over fourteen dollars a month more. This is not an issue of “greedy” seniors as some suggest, but rather one about older Americans and military retirees who have earned and deserve fairness and accuracy. Resolved, before Congress reforms anything, they must fix the broken CPI and provide seniors with a fair and accurate COLA each and every year!
Thair Phillips is president and CEO of RetireSafe, a 20 year old nationwide non-profit senior’s advocacy organization that represents over 400,000 supporters nationwide.