Most years the cost-of-living increases. Many employers provide employees with an annual cost-of-living increase in pay.

If the cost-of-living increases 5%, and the cost-of-living raise is 5%, spending power does not decline.

The goal is to keep employees loyal to their employer.
.

If the cost of
living increases and
your salary doesn't too
you have less spending
power and actually
took a cut in pay.
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