COLA

The price of food is up. It’s always up. Rarely does the price go down unless there has been some record breaking problem that an industry has had to endure, like a hard frost in Florida and California and all the oranges froze. The price goes way up for orange juice, but then comes back down when the groves are established again and the crop is plentiful.

Supply and demand. If the supply in the warehouses is great and the demand is low, the price comes down. The opposite happens when there is a demand on the item. This is how the economy is driven, so we are told.

Problem is, because of so many “drivers” making prices go up, and people still need these items as a matter of everyday middle class survival, the price tends to stay high no matter what the supply. Fuel prices make transporting goods across the country expensive. This is a driver that makes the prices stay higher.

Labor costs is another driver. Costs of the raw materials another. Add to this greed and you have the makings for the disparity that exists today in the grocery store. The widening gap between classes of people. These classes unnoticeable by dress , sex or race in many cases, but also very noticeable within minority populations of certain regions.

Now, the government has announced their 2008 COLA. Cost Of Living Allowance. This is set at 2.3% for 2008. This means that folks on Social Security get a 2.3% increase in their monthly allowance starting January First of 2008. This is a $23.00 raise for every $1000. you receive from Social Security for benefits.

Problem is, the average price of everyday items has risen by much more than 2.3%. The Consumer Price Index mentions a 3.5% to 4.5% increase in food costs alone. For example, the price of a loaf of white bread, the cheap stuff, like the store brand, went slightly higher than last year. But a good quality bakery whole grain bread went up by 8%. So, the retired or disabled person can still buy the cheap white bread, but won’t be able to afford the good stuff.

In fact, there are a number of items that the government doesn’t include when figuring the COLA. They don’t think the aging or the disabled are in the market for some things, so, they don’t figure the increase of these items in their calculations. That results in the COLA being lower than the actual Cost Of Living is!

The statistics used to calculate the COLA is strategically biased, but does benefit Social Security recipients in some years. This excerpt from an AP story may explain some of this:

In the past two years, retirees have benefited from the timeframe the government uses to set the adjustment for the next year. The 2006 increase picked up a jump in energy prices from what occurred in September 2005, reflecting the impact of Hurricane Katrina on production at Gulf Coast refineries.

This year, however, retirees may be penalized because energy costs, which moderated over the summer, are expected to pick up again during the final three months. In addition, food prices and medical prices have climbed rapidly.

But those gains have been offset somewhat by moderation in categories of goods that older people to buy less; they include computers, consumer electronics and clothing.

“Retirees are going to feel a disconnect this year between the COLA increase and the reality of the inflation they face,” said Mark Zandi, chief economist at Moody’s Economy.com. “If this calculation were done in another three months, it would be measurably higher.”

As you can see in the third paragraph. Since seniors buy less of certain products, they are not considered in the calculations, but the costs of these products have increased significantly. They admit that costs in the future will rise, but still make their adjustments based on old information.

Read the entire article HERE.

I am on Social Security Disability. I have had heart attacks and the doctors have concluded that I should not work. When I did work, I paid money each pay check to FICA, the Federal Insurance Contributions Act. This is the law that says we will pay a certain percentage of our earnings into an account and get it as Social Security benefits when we retire, or in my case, if I become disabled, and I am.

So, I am getting my own money back. I started getting it when I was 53 years old. My Dad got his retirement when he was 62, but only lived nine months. My Father-in-law passed on at age 54, he got none of his. So it goes, a balancing act. Some get it, some don’t. Some get more than others. If you made a lot of money when you worked, you get more per month when you start to collect and vice versa. The poor schmuck that dug ditches for minimum wage gets far less than that Union Pipe fitter.

Prosper as you live and prosper as you age. Be poor while you live and be poor for life. This may seem like a fair plan since the amount is based on your own income and contributions, but the mechanism that establishes this cost of living adjustment seems out of whack.

The guy making $1000. a month, who now gets $23.00 extra doesn’t seem to be keeping up with the guy who gets $2000. I believe the COLA needs to be adjusted for what living in America actually costs. If you are from somewhere, you shouldn’t have to move to a seedy part of town because you don’t get enough money to pay the rent where you lived all your life.

I know there are programs that sort these issues out for some folks, but too many slip through the cracks and get lost and mired in the system. Many don’t even pursue programs for reasons of pride, ignorance or lack of an ombudsman or other advocate to help them find help.

This leaves some people eating the proverbial dog food rather than not pay a medical bill or a heat bill. Or don’t put on air conditioning in sweltering heat to have money for peanut butter. When they read of a shortage of an everyday essential like toilet paper, they buy all they can and hoard it.

It is hard to identify many of the real poor in this country. We see the ones getting a free meal at the Union Gospel Mission. Putting aside their freedom of religion to be able to eat. How generous. We’ll feed you, but you must pray our prayers first. In some places, I have seen those that live off the food kitchens as a lifestyle. They lounge on the lawn in the sun with their backpacks full of what they deem important, a camaraderie between the people who might choose homelessness as a way of life, then share repast before heading out to the shelter.

Utah Philips, a Korean Veteran, folk singer, poet and storyteller rode the rails for years. His definition of a Hobo, aTramp and a Bum sort of sums up those that choose a lifestyle that doesn’t seek material wealth. Hobos, themselves, seem to differentiate themselves as travelers who are willing to do work, whereas a Tramp will travel but will not work and a Bum will do neither.

Then there is the working poor that work, but can’t afford or have access to shelter or nutritious food. Sometimes they feed their children before they feed themselves. There are no statistics on this, but it does happen. proud people who have no money, but have dignity and won’t ask for handouts.

Oftentimes, the real downtrodden suffer with this pride that prevents them from seeking help. Some times this is not only the adult, but the children as well, living in a car parked on a dead end road. Water for hygiene and drinking coming from a public restroom in the dark shadow of night as to not call attention to themselves.

America doesn’t know the real poor of this land. We don’t see them. And many are those that we say we are helping because they receive a Social Security check each month.

The churches are well meaning and most don’t lay out conditions for those that need a meal or clothing. A local church here in the community where I live has a stop gap measure, totally funded by parishioners. This is a pittance, but the $50.00 or $100.00 dollars that they give to individuals who ask and have good reason is the difference between hunger and sickness and shelter and freezing, possibly to their death in this extreme Northern climate.

This article calls attention to the poor and to the problems with the COLA, but add to these ideas the fact that we spend many millions of dollars on elections and billions on war. It is said that the Presidential election cost for 2008 will exceed 650 million dollars to the victor, and it will cost a billion dollars by 2012. In 2004, the Presidential elections cost over 2.5 billion dollars.

Add to that the daily cost of having a war with Iraq, or the cost to send one US soldier for a year. That amount, by the way, is somewhere around $390,000. That’s a lot of money. A very small portion of either the presidential election or the Iraq war could add a real substantial lifestyle change to so many of the Nations poor, and possibly find and identify those with dignity that are hungry, cold and homeless.

Like health care, this is another system that needs some tweaking, if not all out fixing. I realize that there are many factors and situations at work here. But if we, as a nation, can get the internet up and running and find you when you might skip a year paying your full amount of taxes, we should be able to make it so a few old folks don’t have to eat dog food, although some brands are better than that white bread they can afford.

tags: social security, cost of living, poverty in america

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