By Jim Cline and Kate Kremer

More often than not, employers prefer a fixed percent COLA adjustment, as opposed to a number tied to the CPI. Having a fixed percentage COLA number written in the “out year” labor contract settlements provides the employer a “known” number to plug into their budgets. While your members have often preferred the ability to keep full pace with inflation, the recent falling and erratic CPI numbers pose a new question: Would you be better off with your contract settlements tied to a fixed percentage increase?

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By Jim Cline and Kate Kremer

The recent fall off in gas prices has dramatically impacted the reported inflation rate. The most recent rate reported on the Seattle inflation numbers were through the end of 2014 and, following a dramatic fall in fuel prices, the Seattle number plummeted. Its high number for the year was 2.6% in April and by December that number had dropped to 1.1%.  Even more dramatic was the drop of the All-Cities national CPI number to 0.3%.  This chart shows the inflation numbers during the course of 2014:

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