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Why Your Salary May Depend on the Price of Lettuce Salary Raises Depend on The Consumer Price Index

How is your yearly raise, if you are lucky enough to get one, calculated? It has to do with the price of bagged non-organic salad.


Will you get a raise this year? How much? If you're lucky enough to be at a healthy company, they may offer you a little boost to "keep pace with inflation." NPR has a wonderful little explainer on how that cost of living adjustment is calculated. They follow a surveyor gathering data for the Consumer Price Index on a little shopping trip through Brooklyn, New York.

His shopping list is prepared by his bosses at the Bureau of Labor Statistics, and it represents the purchases made by a typical U.S. household. The list is called the "market basket," and the items in it are very specific.


Today, for example, George is looking for a very particular kind of lettuce at a small supermarket in Brooklyn.

"A multi-pack of romaine lettuce, not certified organic, from California," he says.

Lettuce was cheaper this time around. The thing is, food prices are notoriously volatile, so most food products are excluded from the "core CPI," which most economists use. Either way, it's worth a listen to the NPR story for a little peak into the surprisingly mundane but methodical way this crucial index is formed, keeping in mind that it will likely affect our yearly cost of living salary adjustments. The next CPI will be released next week.

(via NPR)

Image: (CC) by Flickr user Vic Lic


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