A cost of living adjustment (COLA) is an increase in wages or benefits that is designed to keep pace with inflation. The cost of living raise for 2025 is the amount by which wages or benefits will increase in order to offset the rising cost of goods and services. The COLA for 2025 will be based on the Consumer Price Index (CPI), which measures the change in prices for a basket of goods and services purchased by urban consumers. The CPI is calculated by the Bureau of Labor Statistics (BLS), and it is released monthly.
The cost of living raise for 2025 is important because it helps to ensure that workers’ wages keep pace with inflation. Without a COLA, workers’ wages would lose purchasing power over time, as the cost of goods and services increases. The COLA helps to protect workers’ standard of living and ensures that they can continue to afford the same goods and services.
