Price Indexing

Price Indexing refers to the the Bureau of Labor Statistics (BLS) publication the Consumer Price Index for Urban Wage Earners and Clerical Workers. This publication is referred to as the "CPI-W". Social Security uses the statistical information contained in the CPI-W to annually adjust the benefits paid to Social Security beneficiaries. The average CPI-w value is computed using the reported monthly CPI values. General cost of living increases or COLA's are measured by the Consumer Price Index published by the Bureau of Labor Statistics.

Fast Facts

  • In AIME indexing, the index used to bring past earnings forward to current dollars would be a price index rather than a wage index.
  • AIME indexing is expected to result in larger declines for low-income workers than for high-income workers.

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