Grade 9 Lesson 4: #costofliving
Recently, the #USA gave out the largest increase in #COLA (#Cost of #Living #Adjustment) for its #SocialSecurity benefits. But what does it all mean? We will discuss the same in this chapter.
Cost of living is defined as the amount of #money required to cover necessary #expenses to maintain a certain #lifestyle standard in a particular place and time. Cost of living calculations are used to compare the cost of maintaining a certain #standardofliving in different geographic areas.
An organization called the #Economist #Intelligence #Unit produces a semi-annual worldwide cost of living survey that compares more than 400 individual #prices across 160 products and services. They include food, drink, clothing, household supplies, personal care items, home rent, transport, utility bills, private schools, domestic help, and recreational costs. In addition, Several country-focused #organizations create their own cost of living index to track and report the cost of living in various regions within the country.
Typically, the cost of living index is calculated by comparing the prices of a range of goods and services on which consumers spend their money. #Costs are broken down by category, like health care, food, and housing, and weighted based on spending patterns and individual #budgets. A cost of living index lets you compare how much it costs in one area compared to another. By comparing the cost of living in different cities and regions, you can better understand how far your money can go in different parts of the world.
Certain #cities consistently feature the most expensive cities to live in. E.g., #Singapore is always one of the most expensive cities in the world. #Sydney and #Melbourne have also both cemented their positions as top-ten staples. Interesting statistic - #Asia is home to more than five most expensive cities in the top twenty but also home to eight cheapest cities of the cheapest ten.
Coming back to where we started this chapter - cost of living adjustment – what is it and what is its importance? As the cost of living changes, #wages and #benefits also need to change to maintain the same standard of living. #TheUSA sometimes adjusts its largest #government #pension program (called social security benefits) to keep up with the increased cost of living. This is known as a cost of living adjustment (COLA) and is assessed annually. Due to the high #inflation in 2022, the USA increased their benefits by 8.7% for 2023, the highest ever since 1982.
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