COLAs are considered to be necessary because the real wage is eroded by inflation.

Name: COLAs are considered to be necessary because the real wage is eroded by inflation.
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Question

Quizplus · Accepted Answer

COLAs (Cost-of-Living Adjustments) are given to compensate for the increase in the cost of living due to inflation. Inflation can erode the purchasing power of a worker's wage over time, and therefore, COLAs are necessary to ensure that the real wage does not decrease.

COLAs Are Considered to Be Necessary Because the Real Wage