What is the term for wage adjustments made during inflation to help workers maintain purchasing power?

The term for wage adjustments made during inflation to help workers maintain their purchasing power is Cost of Living Allowance (COLA). This adjustment is specifically designed to counteract the effects of inflation, ensuring that employees' earnings keep pace with rising prices. As every economy experiences fluctuations in purchasing power, COLA serves as a vital tool for employers to support their workforce, preventing a decline in real income during inflationary periods. It is often calculated based on changes in a consumer price index or similar measure that tracks inflation, emphasizing the importance of maintaining financial stability for employees. Other terms such as merit increase and salary review relate to performance-based compensation adjustments or periodic evaluations of salary structures but do not specifically address the inflation concerns that COLA does.