0.2% Projected Benefits Increase Not Nearly Sufficient
Friday June 24, 2016

The trustees of our Social Security and Medicare programs on Wednesday released their current estimate for calendar year 2017 cost of living adjustments in social security and related benefits programs. The projected 0.2% increase is well below our read of what is necessary to keep up in the growing U.S. economy. Through Q1 2016, the Staying Even Index was up 2.5% from 2015, suggesting that the projected Social Security increase is less than one tenth of the increase required to at least Stay Even.

While we are not advocates of faster increases in social security – because the nation can’t afford them – we do think it important to point out that these so-called “cost of living” increases do not actually allow people to keep up and – therefore – should not be used by corporations and individuals to develop and assess pay raise programs in the private economy. 

We instead suggest you use the Staying Even Index (SEI), which measures the year on year increase in the per person size of the US economy. In order to maintain or increase your adjusted share of the US economy, you should look for pay increases at or above the SEI.

Full year SEI growth for calendar year 2015 was 2.7%, and as stated above the YTD Q1 2016 SEI growth was 2.5%. Individuals whose incomes grew faster than these levels expanded their adjusted share of the U.S. economy, and those whose incomes grew more slowly fell behind.

For more information about the Staying Even Index, including why it is a better way to measure your economic progress than the CPI or COLA, and for access to the Staying Even calculator, visit StayingEven.com. We also publish monthly updates to the SEI as GDP and population estimates are updated by U.S. government agencies.

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To find out whether you have gotten ahead and to learn more about the Index, please follow @stayingeven on Twitter and visit us at StayingEven.com