Cost of Living Raise

There is no cost of living index provided by the US government, it uses the consumer price index to determine living costs of the general population. The consumer price index is data accumulated over time about what the urban consumers pay for a basket of goods and services. The consumer price index ruminates on the prices paid by the urban consumers for items like insurance, housing, gas and food. The Bureau of Labor Statistics uses a geometrical mean formula to calculate the cost of living, in the basic indexes. This method of calculation isn't comprehensive, as it does not take into consideration the consumer substitution for an item in the index.

To help you understand, if one of the items in the index is beef and its price rises, the consumers might substitute it for chicken, this consumer substitution is unaccounted for when calculating the consumer price index. It is difficult to take into account lifestyle changes, pricing and consumer preferences, hence the bureau of labor statistics takes a survey of the number of families living under urban conditions to calculate the CPI which in turn decides the raise that you get.

The Bureau of Labor Statistics issues an occupational outlook handbook, which gives information about the education required for a particular job, the earnings and the job prospects. An employer uses this occupational outlook handbook as a road map to determine the raise in the US economy. Over the years, the cost of living raise has seen an average growth of 3.2 percent to 3.9 percent, the government decides once a year to raise the cost of living percentage for the social security check, and has gone up considerably over the past 25 years. The 2010 authorization bill for the department of defense has 3.4 percentage hike for military personnel and the federal civilian employees will also get an average of 3.4 percent raise for government jobs in the year 2010.

The raise in social security checks for older American is not going to be much, this is due to the expected low forecast of inflation rates. The cost of living raise in 2009 was by 5.8 percent to the social security benefits. In 2009, due to the economic recession the raise was not great for many industries, but whatever raise that employees got was more than welcome under the prevalent market conditions. People living in large metropolitan areas like New York should expect a raise on the higher side of 4-5 percent. The consumer price index data, on which the raise is mostly dependent, is scheduled to be released by the BLS on August 13 2010.

The New York State Teachers Retirement System (NYSTRS) has announced a 1.2 percent cost of living adjustment, effective September 2010. In the year 2009 the NYSTRS had given a 1.0 percent cost of living increase raise in their checks. The health care industry has predicted that no substantial raises will be given out for the year 2010. Some health establishments in these times of a credit crunch have indicated that there will be no increase in the existing cost of living they offer their employees. If you are thinking about asking for a cost of living pay raise from your boss better be equipped with industry specific data from the BLS, that predicts the occupational outlook of your industry.

The US state congress has voted itself a raise, but for us, we have to hope for a good employer who follows the BLS recommendations. The general trend although has indicated a raise of 3-4 percent for the large metropolitan areas and 1-2 percent in other regions.