Thursday, July 31, 2008

Reading the Tea Leaves

This could be pretty important, from Forbes Magazine:

If you live in Seattle, it might be time to ask for a cost of living increase. The city has the highest inflation rate in the country.

"Seattle household income is fairly high, and that helps to maintain a high rate of inflation since higher income areas can afford price increases," says Steve Cochrane, an economist with Moody's "Some of it is fuel, but housing prices have also been more stable than anywhere else on the West Coast, which adds to inflation."

Normally, Seattle's 3.7% unemployment rate, well under the national average of 5.5%, would be a good thing. But a growing economy with low unemployment drives up wages and costs. The Emerald City's consumer prices are up 5.8% from this time last year, which ties for the highest inflation rate in the country with Dallas, where high energy costs for home cooling and driving are eating up incomes.
Consider that the COLA for teachers mandated by I-728 is tied to the inflation index in Seattle. Consider further how many districts struggled with COLA costs for their staff that aren't funded by the state, and that was at only 5.1%. Wrap all that up with a $2.7 billion dollar budget deficit bow, and I'd say that there's certainly going to be a movement to suspend the teacher COLA in the legislature this year.

(Hat tip to Slog for having the story first.)

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