Your employer uses an escalator clause to determine your raise each year. In an inflationary environment, your employer is more likely than you are to want to use the chained CPI for urban consumers as the price index in this clause.

Question

Quizplus · Accepted Answer

Employers may prefer the chained CPI because it typically shows a lower rate of inflation than the traditional CPI, potentially resulting in smaller wage increases.

Your Employer Uses an Escalator Clause to Determine Your Raise