The consumer price index does not measure the rising costs of the basics of life. Those prices have risen an average of 4 percent over the last 100 years.
At 4 percent per year inflation on everyday things such as food, gas and health care, the state retiree with no cost-of-living increase will end up on welfare in their later years. That’s going to cost far more than a COLA.
Run the numbers. A 65-year-old with a state pension of $20,000 per year today may well live to be 95. With no COLA, at 4 percent per year inflation his buying power at age 95 will be only $6,000 a year.
That is effectively a 70 percent pay cut. It is unrealistic to expect anyone to live on that little, especially since they will almost certainly have many chronic health problems by then.