Define: Cost-Of-Living Adjustment

UK Accounting Glossary

Definition: Cost-Of-Living Adjustment



Advertisement



Full Definition of Cost-Of-Living Adjustment


COLA, or cost-of-living adjustment, is an act of adjusting wages to create economic balance for the changes in the cost of living. A COLA is measured by the Consumer Price Index (CPI or cost-of-living index), which calculates the changes in consumer prices. A COLA takes into account many components, such as the cost of transportation, housing, and utilities. One of the main benefits of a COLA is that it affects millions of people by providing safeguards against inflation and reduced purchasing power. Thus, a COLA is a key bargaining issue in labour and pension contracts, as well as Social Security payments. Since many of these contracts are tied to the changes in consumer prices, a COLA is a highly political issue.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/cost-of-living-adjustment/
Modern Language Association (MLA):
Cost-Of-Living Adjustment. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 27, 2020 https://payrollheaven.com/define/cost-of-living-adjustment/.
Chicago Manual of Style (CMS):
Cost-Of-Living Adjustment. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/cost-of-living-adjustment/ (accessed: February 27, 2020).
American Psychological Association (APA):
Cost-Of-Living Adjustment. PayrollHeaven.com. Retrieved February 27, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/cost-of-living-adjustment/

Definition Sources


Definitions for Cost-Of-Living Adjustment are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February 2020.