The Federal Diary in the 1970s: Retiree COLA rises 50 percent

December 11, 2012

When federal worker retirees first began to receive annual cost of living adjustments tied to an inflation measurement formula, some reacted by asking the Post to hush up about it. 

“Some have sent petitions to this newspaper — which serves some 70,000 federal retirees — asking that it impose a complete blackout on information about retiree raises,” Federal Diary columnist Mike Causey wrote on November 28, 1974. The attention, they claimed, “just causes landlords and merchants to raise prices and doesn’t give the total picture.” 

Our decade-by-decade look into the archives of the Federal Diary on its 80th anniversary of covering federal worker news dips into the issue of how retiree benefits are calculated compared to current worker pay. 

Causey, forging ahead, went on to explain that after Congress in 1967 tied retirees’ COLA to the Consumer Price Index — a measure of inflation — their pensions had risen 50 nearly percent by 1974. Current federal employees salaries only rose 42.2 percent in that time, because they’re calculated by a different formula that watches private industry pay.

“Inflation began to pick up and there was a … raise in 1969 of 5 percent,” Causey reported. The COLA went up 5.6 percent in 1970 and 4.5 percent in 1971, followed by 4.8 percent in 1972 and 6.1 percent in 1973. 

By comparison, retirees received a 1.7 percent COLA in 2012 and none in the two years before that, due to a lack of inflation. 

Causey suggested that if trends continued, current federal workers might press for their pay to be linked to the CPI as well. 

The CPI and its method of calculating inflation are in the news again, this time as a possible part of a “fiscal cliff” deal. 

Causey wrote just a week ago for Federal News Radio about the potential effect on federal  and military retirees of switching to a different measure of inflation, called the “chained CPI.” The chained CPI calculates inflation at a lower rate than the current methodology, and so over time would make lower federal retiree and Social Security cost of living adjustments. 

We’d like to hear from readers about their favorite Diary columns, memorable Diary moments, or, like the petitioners in 1974, any Diary critiques. Write to federaldiary@washpost.com or leave your comments below.

Previously in this series1930s: No more primping1940s: A post-War transition shakeup1950s: Pay raise proposals galore; 1960s: A focus on the Great SocietyThe Federal Diary’s inaugural 1932 column

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Josh Hicks | December 11, 2012