No, not a new brand of soft drink, but rather Cost Of Living Adjustments that adjustment downward.
Certain payment amounts are adjusted yearly based on inflation, usually as measured by the CPI. Social Security payments, for example. Also I believe some union contracts have provisions for hourly wages to be adjusted this way. In some states (including here in Oregon), the minimum wage is indexed similarly.
Now we’ve a lot of inflation, caused mainly by the run-up in fuel prices. This has led to some big COLAs. For instance, the minimum wage here in Oregon will go up by 45 cents to $8.40 in January. That’s about a 5.6% increase. This figure is determined in August or September and probably is based on the 4 quarters ending in June 30th or possibly the end of July.
At any rate, it’s a huge jump and the calculations included pretty much all the inflation caused by fuel prices. Now those prices have come way down and we’re entering a recession that promises to be severe. It wouldn’t surprise me in the least if we had some deflation during the recession.
So if we did have some deflation, will the aforementioned COLAs actually reduce these payments/dollar amounts? Did the people who wrote the laws only allow for increases or did they assume that we’ll never get deflation and didn’t worry about it? Or perhaps they thought negative COLAs would be a good idea in case of deflation?