Establishing the Cost-of-Living Allowance (COLA): Updating the Market Basket Over Time

You may have heard the term “market basket” used in connection with Cost-of-Living Allowances (COLA). The market basket is a key element in establishing the COLA, so it is important for you to understand it. In this article, we will explain what the market basket is, why it is important to the COLA, why it is important to keep it updated and why it is vitally important to make those updates gradually.