cost of living

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cost of living,

amount of money needed to buy the goods and services necessary to maintain a specified standard of livingstandard of living,
level of consumption that an individual, group, or nation has achieved. The evaluation of a standard of living is relative, depending upon the judgment of the observer as to what constitutes a high or a low scale.
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. The cost of living is closely tied to rates of inflationinflation,
in economics, persistent and relatively large increase in the general price level of goods and services. Its opposite is deflation, a process of generally declining prices. The U.S.
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 and deflation. In estimating such costs, food, clothing, rent, fuel, lighting, and furnishings as well as expenses for communication, education, recreation, transportation, and medical services are generally included. The Consumer Price Index (CPI), a measurement of the cost of living prepared by the U.S. Bureau of Labor Statistics, tracks changes in retail prices of an average "market basket." Changes are compared to prices in a previously selected base year, from which figures the percentage increase or decrease in the cost of living can be calculated. In addition to changes over time, such analyses must also consider regional variations in the cost of living, and the relative weighting of the components of the index must be reappraised periodically. The CPI is based the spending habits of 14,000 households that are considered representative of the U.S. urban and metropolitan population; data collectors collect and compile some 80,000 price quotes monthly. The first attempt to gather data on the cost of living in the United States was made by the Bureau of Labor Statistics in 1890. The dramatic increase in the rate of inflation during the 1970s led to the widespread use of cost-of-living adjustments (COLA) in wage agreements, real estate leases, and such government benefits as social security. These adjustments are often made using the CPI.

Bibliography

See bibliography under standard of livingstandard of living,
level of consumption that an individual, group, or nation has achieved. The evaluation of a standard of living is relative, depending upon the judgment of the observer as to what constitutes a high or a low scale.
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.

cost of living

1. 
a. the basic cost of the food, clothing, shelter, and fuel necessary to maintain life, esp at a standard regarded as basic or minimal
b. (as modifier): the cost-of-living index
2. the average expenditure of a person or family in a given period
References in periodicals archive ?
After the two most recent union contracts were finalized, Commissioner Faye Stewart proposed that the county consider providing nonunion employees a cost-of-living increase as well, at a board meeting in late October.
2001, "Should Cost-of-Living Index Provide the Conceptual Framework for a Consumer Price Index?
Most arise because the basket of goods and services used to compute the cost-of-living statistic gradually becomes dissimilar to the basket of goods and services actually purchased by consumers.
Inevitably, the annual cost-of-living increase became an intrinsic part of that expectation.
Other important settlement terms included incorporation of the existing 43-cent-an-hour cost-of-living allowance into basic wage rates; hourly wage increases of 25 cents in 1989, and average increases of 25 cents per hour in 1990 and 50 cents per hour in 1991; and a 4-year contract, more in line with recent settlements in the industry, rather than the 3-year duration of previous agreements.
Union President Scott Olmos said the proposed agreement would eliminate cost-of-living raises for the duration of the contract.
The new cost-of-living increase for Los Angeles Mayor Antonio Villaraigosa, resulting in higher wages than our nation's vice president receives, makes as much sense as it would to pay an army captain more than a four-star general or a box boy more than a store manager.
The differential can be updated annually through a variety of cost-of-living differential calculators and software that can take into account an area's cost of living and area base pay, multiple earning levels and geographic differential data.
The taxpayer asked the IRS if it was possible to modify his payment plan by adding an annual 4% cost-of-living adjustment (COLA) and by including a one-time "catch-up" amount.
A considerable professional consensus already exists for at least two actions that would almost surely bring the CPI into closer alignment with a true cost-of-living index.
Based in Redmond, Washington, ERI provides salary survey and cost-of-living research reports and software to over 15,000 organizations worldwide.
For the first time in more than 30 years, seniors and disabled workers on Social Security will not receive a cost-of-living adjustment next year.