For the second straight year, there will be no Social Security cost-of-living increase or adjustment. The reason for the lack of a raise is the same one given for the zero raise in 2010 – inflation is very low and an increase is not necessary.
Now most people would argue that the methods used to measure the official inflation are flawed. However, the government gets the final word – so no raise.
Will there be a stimulus check to make up for the zero raise?
While the odds of a 2011 stimulus check for Social Security recipients is not very good – it’s not an impossibility either.
How is the COLA amount determined?
There is a measured index which is used to see if prices are going up or down. This will determine how much the official rate of inflation is. The index is called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index is tracked by the Bureau of Labor Statistics who have determined that this index has not changed between the third quarter of 2008 and the third quarter of 2010. This is why there was no raise in 2010 and why there will be no raise in 2011.
History of Social Security increases
Here is a table of all the SS COLA (increases) from 1950 onward.