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COLA: How It’s Determined and Why Is It Important?

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By Meta Talent Group

The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on the increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated monthly by the Bureau of Labor Statistics.

COLA Effectivity: Listen-Up

A COLA effective for December of the current year is equal to the percentage increase in the CPI-W from the average for the third quarter of the current year to the average for the third quarter of the last year in which a COLA became effective.

If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase or the rounded increase is zero, there is no COLA for the year.

COLA- Benchmark for Determining Wage Increases Across the Board

Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase by 1.3 percent in 2021.

 The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. 

COLA is a significant number for those people receiving SSI and the rest of the U.S. workforce. It serves as a benchmark or baseline for determining wage increases across many industries, including Cannabis and Alternative Health.

On the Job Front:

The job openings rate, or the number of jobs available as a percentage of those employed, rose to 4.9% in February, which is the highest rate since the data was first collected back in 2000- reported by the U.S. Department of Labor.

Furthermore, the total number of jobs available saw a modest increase to 7.4 million. 

It’s positive news on the improving job market (916,000 jobs added in March) with increased openings in health care, accommodation and food services, arts and entertainment, and recreation.

The International Monetary Fund raised its forecast for Global Growth in 2021 to an annual rate of 6%, with the U.S. coming in at 6.4%. Those are increases from the organization’s January forecast and primarily in line with improving estimates across the board.

The National Federation of Independent Businesses (NFIB), a small-business association, reported on April 1 that 42% of its member firms couldn’t find enough workers to fill open positions.

This is the highest number on record and nearly twice the average going back to 1974.

Reasons for Increased Job Availability:

We could point to structural unemployment as a reason for the increased available job openings, where people are available for work, but they either don’t have the training necessary for the jobs available, or they don’t live in areas with open positions.

An additional hurdle could be that the government provides unemployed workers with federal unemployment assistance that brings total U.I. benefits close to their routine, pre-covid pay levels.

With a weekly $300 federal unemployment added to standard state unemployment, we can comfortably surmise that a high percentage of unemployed workers may be making more income by staying home…

The new American Rescue Plan extends the Federal Pandemic Unemployment Assistance (PUA) program through September, so these issues may further persist.

People might choose to stay home instead of work for many reasons, ranging from needing care for children who are attending school remotely to assist with household needs.

The Law Behind Filing for Unemployment:

By law, workers filing for unemployment benefits are required to search for employment simultaneously.

Employers who recall workers, such as restaurants that reopen and ask workers to come back, are supposed to report workers who refuse their unemployment commission. Amid the pandemic and chaos at unemployment offices around the U.S., who is checking on such things?

Supply vs Demand:

Although the increased availability of jobs is a positive indicator of an economy on the rebound, we must meet the supply of open positions with demand.

In the most basic sense, job availability is not going to help our economy if there isn’t anyone willing or able to fill them.

Jobs in The Canna-Economy:

For certain, the Cannabis Industry is growing and evolving at a great pace, in the US and globally, with the Meta Talent Group at the helm, you can confidently count on as a guide for your journey ahead.

We provide staffing and direct-hire recruitment services for the world’s top talent and growing companies focused on people, planet, and profitability.

Inspired by our desire to transform the world socially and environmentally, Meta Talent Group provides synergy between great people and purpose!

By connecting real people with altruistic companies, we will fuel these companies’ growth and help transform the world.

No matter what stage of the business cycle you’re in, we help support growth and change!

Industry Updates:

  • Mergers & Acquisitions
    • Greenlane and KushCo merged to become the world’s largest maker and wholesaler of ancillary products
  • Legalization
    • March 31, 2021 – N.Y. becomes the 15th state to legalize recreational marijuana
    • April 7, 2021 – Virginia becomes the 16th state to legalize adult-use marijuana taking effect July 1, 2021
    • Nevada lawmakers moved forward legislation that would permit consumption lounges
    • D.C., our nation’s capital, says it’s ready to start selling adult-use cannabis
    • The Texas House of Representatives approved a bill to decriminalize marijuana possession, the state Senate is next
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