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I need the correct definition of a COLA vs a Pay Raise. I had read somewhere (brain cells refuse to remember where)that a COLA is to keep wages equal too inflation but does not raise real income, where a pay raise must be greater then the inflation rate to effect a real increase to income. Is this making sense? I've got a bet going on this one so economic based, tracable definitions are really important.
Thanks.
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<<I need the correct definition of a COLA vs a Pay Raise. I had read somewhere (brain cells refuse to remember where)that a COLA is to keep wages equal too inflation but does not raise real income, where a pay raise must be greater then the inflation rate to effect a real increase to income. Is this making sense? I've got a bet going on this one so economic based, tracable definitions are really important.>>

I don't think that "pay raise" is any kind of official term. It probably would include any kind of increase in one's salary.

COLA, on the other hand, stands for "cost of living adjustment." It's meant to be an adjustment that increases one's pay so that it keeps step with inflation.

Here's a bit more on the COLA from the social Security Administration:
http://www.ssa.gov/OACT/COLA/COLA.sum.html

Cheers!

Selena
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Selena;
Thank you for the response. Your right concerning pay raise, perhaps the correct term I should have used is wage increase. Although the bet is still in question I now have a basis for my argument.
Later
GLBrandt
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