Seniors Are Getting Systematically Screwed By How We Pay Social Security — And It's Been Happening For Years

Danny Vinik
Nov. 22, 2013, 9:43 AM

For decades now, the real purchasing power of social security benefits has been falling.

In real terms, the benefits seniors receive are considerably less than what their parents received a few decades ago. It's time we do something about it.

The Bureau of Labor Statistics (BLS) use a cost-of-living adjustment (COLA) called CPI-W each year to calculate how much social security benefits should grow to keep up with inflation. Their purchasing power would quickly degrade rapidly if such an adjustment were not made. Here's the problem: CPI-W underestimates how much the cost-of-living for seniors increases each year.