UAW President Comments on (COLA) Payment Decline

DETROIT, Feb. 21 -- UAW President Stephen P. Yokich said today that the Cost-of-Living Allowance (COLA) paid to many UAW members would decline beginning with the first pay period in March, the result of falling consumer prices during the three months ended January 2002. While emphasizing that lower prices benefit consumers, Yokich warned that, ``low inflation is no substitute for economic growth and rising employment.''

``Lower prices increase working families' purchasing power,'' said Yokich, ``which is welcome in a weak economy when incomes aren't rising. But that is scant comfort to workers who have lost their jobs or seen their hours of work cut back in a recessionary economy. My concern is that this latest price report shows economic fragility, not strength.''

The COLA paid to UAW members working for the Big Three will decline by eleven cents ($0.11) per hour beginning in March, to $1.28. This is the second consecutive quarter that COLA has declined, following a one cent ($.01) drop in the quarterly adjustment for December 2001, and marking the fourteenth negative adjustment since COLA was established at GM in 1948.

The decrease in COLA is due to a decline in the three-month average of the Consumer Price Index for Urban Wage and Clerical Workers (CPI-W). The COLA amount for March is based on comparing the CPI-W average for November and December 2001 and January 2002 to the average for August, September and October 2001. Although the CPI increased slightly in January, it had fallen in five of the preceding six months.

Pointing out that energy prices are driving the overall trend in prices, Yokich stressed the continuing value of the union's COLA provisions. ``We all know that energy prices are volatile. When oil prices take off again, our members will be protected.''

SOURCE: UAW