COLA and You

Mark Dimondstein

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(This article first appeared in the July/August 2022 issue of the American Postal Worker magazine)

Soaring inflation is hurting working people worldwide with rising prices on basic necessities including gasoline, food, transportation and housing. Inflation is largely being driven by an economy concentrated in the hands of a few powerful and greedy corporate monopolies that have the power to raise prices, with little fear of competition. In 2021 consumer prices rose 6.7 percent yet corporate profits rose 25 percent – a record high. In the first quarter of 2022, the five major oil companies tripled their profits to $35 billion. Monopoly power and price gouging may be good for corporate profits and Wall Street, but they are disastrous for workers. Clearly, over the long run we have to replace corporate domination and power with more workers’ power.

Rising inflation underscores just how important the continuation of our negotiated Cost of Living Adjustment (COLA) is in our outstanding new union contract. COLA is our best protection against inflation. We are some of the few U.S. workers who receive COLA increases. Even in the postal world, we are the only union that has maintained full COLA in our union contract. We should never take our union won gains for granted. Management puts COLA on the chopping block during every round of negotiations and we have to fight to preserve those hard-won provisions.

Let’s examine the “COLA Difference:” (The APWU has negotiated a number of union contracts/collective bargaining agreements. The figures below apply to the main agreement covering 200,000 postal workers.)

  • As inflation started to dramatically rise in 2021, the union-negotiated COLA increases for that year amounted to $1.14/hour or $2,371 annually for fulltime career employees.
  • The first COLA (March 2022) under the newly negotiated and ratified union contract was sixty-three cents/hour or $1,310 annually.
  • The second COLA, due this August, currently stands at a whopping eighty-seven cents/hour or $1,809 annually. With two months left until the second COLA is set, (while the final allowance may fluctuate), we believe it could top $1.00/hour.
  • At this point in time, the first two COLAs in the new contract amount to $3,120 annually.
  • The 2021 and 2022 COLAs combined will exceed $5,500 annually. COLA becomes part of our regular wages and thus carries over year-after-year.
  • In addition to COLA, the annual wage increases due each November under the new union contract amount to an average of $800/year for career employees. Those not yet at the top step of the pay scale continue to receive step increases of approximately $1,000 every thirty-six weeks, in addition to COLA.
  • If prices decrease, with fuel for example, we still keep our COLA increases. Those gains are locked in and become part of our base salary going forward.
  • While PSEs do not receive COLA, upon conversion they are slotted into the proper pay scale that includes all these COLA increases.

Over the years of contract negotiations, it has not been uncommon to lose COLA increases, either through an arbitration award or voluntarily absorbing an increase(s).
For example, the 1994 interest arbitration award eliminated two COLA increases. In 2010, the APWU voluntarily gave up two COLAs. Once we skip COLA increases, they are gone forever. Just think what would have happened if we went to interest arbitration and lost the first two COLAs of the new CBA! Postal workers would have lost over $3,000 a year or approximately $100,000 over a typical postal career.

I am proud that as your lead negotiator in the last three contract negotiations of 2015, 2018 and 2021, we maintained all our COLA increases. And you should be union proud as well — every member is the strong foundation on which we build our union rights and build a better future for all postal workers and our families – including COLA!