Why the zero increase in Social Security benefits is unjust

Elderly Woman Cooking CC0The cost of living is rising for seniors and people with disabilities, but Social Security benefits are not.

Social Security announced October 15 that there will be no rise in Social Security benefits in 2016, so nearly 65 million Americans who receive Social Security retirement or disability benefits will see no increase, despite the fact that their actual cost-of-living is rising.

The annual cost-of-living adjustment (COLA) is an automatic annual increase in benefits based on the measure of inflation provided by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). According to the U.S. Bureau of Labor Statistics, the CPI-W fell 0.6 percent over the past year, mostly because of the nearly 30 percent drop in gasoline prices. Since the CPI-W actually decreased, there will be no COLA increase.

There is one big problem with that: retired people and people who are not working due to disabilities do not drive as much as urban workers, so the CPI-W is not an accurate measure of the actual increase in their cost of living. A more accurate measure of inflation for Social Security beneficiaries would be the CPI-E, an index for the elderly. This inflation index gives greater weight to costs like housing and health care, which have increased. Although the CPI-E is not fully developed, under current calculations, it has increased by 0.6 percent, which would provide for an $88 increase in annual benefits for the average beneficiary. This is a desperately needed raise, especially since about 30 percent of Medicare beneficiaries are expected to see their Part B premiums increase by 52 percent next year, from $104.90 per month to $159.30 per month.

If we believe this erosion of benefits is unjust, we can demand change. Democratic candidates for President Bernie Sanders and Martin O’Malley have proposed Social Security plans that expand benefits and protect them from erosion by using a more accurate cost of living measurement.

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