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I didn't know that wages and the cost-of-living were previously "connected." If they were, that would have been in violation of one of the ten commandments of compensation management which tells us that they should not be mentioned in the same breath. It will be interesting to hear the discourse about the cost of living and the cost of wages now that the former will be in full gear.



You're correct - it is a violation of the ten commandments of compensation to mention these in the same breath, and it is something I am always/forever warning my clients about (as in "we pay cost of labor, not cost of living"). HOWEVER. And this is a big however. While we (compensation professionals) are well-advised to strike the term cost of living from our communication with employees, I think it does behoove us to pay attention to the interplay between cost of living and cost of wages, so that we have an informed sense of whether our employees are - or are not - making headway. In my annual salary planning seminars, I typically show a chart that displays COL and average wage increase data for the past 8-10 years, just to ensure that people see and understand what is going on here, in a macro-economic sense.

That's my point of view, anyway. So ... your caution is well placed, but I think ERI is within reasonable limits to mention this to the employers who track and purchase their data.

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    Compensation consultant Ann Bares is the Managing Partner of Altura Consulting Group. Ann has more than 20 years of experience consulting with organizations in the areas of compensation and performance management.

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