What are the cost-of-living adjustment clause, the wage reopener claus

QUESTION

What are the cost-of-living adjustment clause, the wage reopener clause, and givebacks?

What will be an ideal response?

ANSWER

Answer: The cost-of-living adjustment (COLA) clause is a contractual clause that states that during the period of the contract, future wage increases are tied to increases in the cost of living. The wage reopener clause allows wage rates to be renegotiated at certain stated times during the life of a contract. Givebacks are previous wage or benefit gains the union gives up in return for something else.
Explanation: Because the cost of living is always going up (at least so far), unions often try to ensure that future compensation will go up as well. The primary tool used is the cost-of-living adjustment (COLA) clause, which during the period of the contract ties future wage increases to increases in the cost of living. An alternative to the COLA clause is the wage reopener clause, which allows wage rates to be renegotiated at certain stated times during the life of the contract. Management and labor may negotiate givebacks, in which the union agrees to give up previous wage or benefit gains in return for something else.