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Why the Cost of Living Raise is NOT my friend

Cost of living

Don’t be a can of SPAM

Cost of Living Raise question from a reader


I have been working at a company for the past 4 years and the first 2 years I was here, everyone in the company got a “Cost of Living” raise.  These past 2 years, we didn’t, and I think that the company is just trying to cheat us.   My last cost of living raise was only 2.5% and that was two years ago.  I haven’t had a raise in 2 years.  The company is saying that the economy hasn’t seen enough inflation to justify a cost of living raise.  Gas is more, food is more.  How can they say there is no inflation?


Deserves A Real Increase Now


Not a good situation

Yes, at first glance, this sounds like a pretty shitty situation. That being said, let’s put this into perspective.

If you are collecting Social Security, there was no COLA (Cost of Living Adjustment) in 2010 and 2011.  The CPI (Consumer Price Index), as determined by the Bureau of Labor Statistics in the Department of Labor, did not increase above the level of the third quarter of 2008, the last year COLA was determined. Before 2010 the COLA increased every year since 1975.

I realize you are not collecting Social Security, you are working.  Point taken. I provide it as a reference point. Here is how I really feel.

I don’t believe in “cost of living” raises

They just promote apathy, indifference, and a passive work ethic. Just because the cost of living increases doesn’t mean the company owes you a raise. The reason a company should give you a raise is that you are WORTH more to the company. If you know you will get a COLA for just putting in the minimum effort, why put in anything more than the minimum year after year?  You can do nothing and get a COLA, and the guy next to you puts in 60 hours a week and only gets 4 or 5%.

It’s more expensive

I get that gas, food, and clothes cost more money, but if you are not doing more for the company than when you were first hired or given your last raise, why should you be paid more?  For those of you saying, “I have been with this company for five years,”.  Just stop right there. Time with the company doesn’t mean that you are worth more.   You have had plenty of time to PROVE your worth more, but you still need to reprove it every quarter. Time may equal money, but not with your career. It may mean that you have more institutional knowledge, but it doesn’t mean you are doing anything with it.  You gotta DO something with that knowledge. Make a Move Son!

Example given

You are one of 10 people starting at a company doing job “x,” and we are paying everyone 50,000 each. If we give a 3% cost of living raise every year for five years, at the end of those five years, everyone will be making $58,000.  (I get that this is a large cost of living number, but this is just a math exercise) At the end of 10 years, everyone is making $67K. If you are not adding more value, are not more efficient, or are not more productive than you were on Day 1, then how are you worth more? I might as well just get someone with the same amount of experience we hired you with five years ago, and save the $17,000 a year. Multiply that number times ten employees, and we are wasting 170K a year.

I didn’t hear you were doing more for the company or providing more value. I heard you complain about “you.” Tell me what you did to the bottom line of your department.

If you still don’t agree

If you have two cans of SPAM at the grocery store and one is miss-priced by an additional 10%, which one are you going to buy? You are not going to buy the more expensive SPAM. You are going to go to the Store Manager and ask some questions. The Same can, two different prices. Of course, you are going to pick the one that is 10% less.

If there are two cans of SPAM, both at the same price, and one is 10% larger than the other, you are going to probably buy the larger can. If you want to be paid more, provide more value to your buyer.  Be the larger can of SPAM.  Provide more SPAM.

Yes, I just called you a can of SPAM

So, this probably isn’t what you want to hear. But I started this blog to tell you what I really think, and personally, I just can NOT wrap my head around a Cost of Living Raise. I can wrap my head around a raise to provide more value. If you are producing 10% more revenue, spitting out 15% more widgets, and shaving time off of a workflow. . .these things are adding to the bottom line. My advice to anyone that works is to NOT rely on the COLA because you can work yourself right out of a job, and you will have a very difficult time finding a similar job with the same pay.

See you at the after party,


nasty:  an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone who is good at something.  “He has a nasty forkball.”

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