COLA

Definition

Cost of Living Adjustment. An annual adjustment in wages to offset a change (usually a loss) in purchasing power, as measured by the Consumer Price Index. The Consumer Price Index is used rather than the Producer Price Index because the purpose is to offset inflation as experienced by the consumer, not the producer.

Use COLA in a sentence

To counteract the effect of inflation, COLA is made to Social Security and supplemental wages to offset the change.

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