The cost-of-living adjustment (COLA) for 2025 federal employees is a crucial measure that aims to maintain the purchasing power of federal workers’ salaries in the face of rising inflation. It is calculated based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the previous year.
The COLA is of utmost importance as it ensures that federal employees can keep up with the rising cost of living and maintain their standard of living. It plays a vital role in attracting and retaining a skilled and dedicated workforce within the federal government. Historically, the COLA has been an integral part of federal compensation packages, helping to ensure fairness and equity for those serving in the public sector.