The Importance of a Cost-of-Living Adjustment for Disabled Workers in California

The California Workers’ Compensation system has long provided benefits to workers who are injured on the job. However, without adjustments for inflation, the value of these benefits erodes over time. Injured workers on permanent or partial disabilities are the most vulnerable to inflation and the rising cost of essential goods. For these injured workers, a Cost-of-Living Adjustment (COLA) can be a lifeline, as it allows them to maintain a basic standard of living even as prices rise for housing, groceries, and medical care.

In most cases, COLAs are calculated using government-published indices like the Consumer Price Index (CPI) and are adjusted annually. And most simply track the COLA for Social Security. For 2023, Social Security beneficiaries received an 8.7% increase in their benefits, reflecting the sharp raise in inflation. In total since 2014, monthly Social Security benefits for retirees have increased by $531, from $1,256 to $1,825. What has not increased in the past decade is the maximum permanent disability compensation rate for injured workers. It remains as it was in 2014, at $1,256 per month.

It is worth noting that COLAs have been widely implemented in California, including for state legislators. Since 2014, CA state legislators have received a total of nine adjustments to their salaries (totaling 31.7%) to ensure that they remain competitive and sufficient to cover the increased cost-of-living for these public servants. If state officials receive protections against inflation, why shouldn’t injured workers who rely on fixed incomes receive the same consideration?

The reality is that without COLAs, permanent and partially disabled workers face shrinking incomes as inflation continues to rise. This disproportionately affects those who are already struggling to make ends meet. Expanding COLAs to those relying on limited incomes, including disabled workers, would not only level the playing field but also demonstrate a commitment to fairness and equity for some of California’s most vulnerable residents. As we advocate for Workers’ rights, ensuring that COLAs are part of the conversation is essential in helping workers that have been injured live with dignity and security.