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What is Cost of Living Adjustment?
A cost of living adjustment (COLA) is a raise designed to offset inflation so your real purchasing power holds steady. It's usually distinct from merit increases and is often tied to CPI.
Examples
- A 3.2% COLA matching the prior year's CPI.
- Government employees receiving a statutory annual COLA.
- A company giving a 2% COLA plus a separate merit pool.
Why this matters
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