Jonathan's Clement's Blog: Running In Place: CPI-W

Ted

FYI: (This is a follow-up article.)

THE FEDERAL GOVERNMENT today released an inflation measure that’s closely watched—for no good reason.

At issue is CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers. In July, it stood at 246.155. August’s level, which was released this morning, was 246.336. July and August’s levels are two of the three months used to calculate the annual cost-of-living increase for Social Security retirement benefits. The CPI-W for September will be the final factor in determining 2019’s benefits increas
Regards,
Ted
https://humbledollar.com/2018/09/running-in-place-2/

msf

Ted said:

FYI: (This is a follow-up article.)

https://humbledollar.com/2018/09/running-in-place-2/

Not exactly. This is a prequel to the prior MFO posting. That posting linked to a Marketwatch Opinion piece with the footnote:

This column previously appeared on Humble Dollar. It was published with permission.

That's the Humble Dollar column cited here. So we can call the link here a prequel or a dup. Regardless, post it once, post it twice, post it a dozen times, it's still wrong:

If the increase in benefits is modest, it means price increases have also been modest, so retirees are no worse off.

If prices have gone up 2.7%, give or take, and a retiree's Medicare premium goes up so high that it eats up the whole the 2.7% SS increase, then that retiree is worse off. A retiree still has to pay rising prices for other goods and services while the net SS check increase is stuck at zero.

Even this year [2018] when the COLA increased benefits 2%, more than any other year since 2011, the average senior was left with less than $5 additional dollars after paying for Medicare Part B.

https://www.thinkadvisor.com/2018/06/21/how-the-social-security-cola-fails-seniors/
Worse, those with lower than average SS benefits - the ones who needed an increase the most - didn't even see that $5 net increase, because their 2% increase was lower in absolute dollars.