The Coronavirus has come to the United States after the first case was diagnosed in California, developing from an unknown origin and worldwide continues to spread across continents, but what does that have to do with Social Security? Believe it or not, in an indirect way the Coronavirus could play a factor in determining Social Security benefits for 2021.
An interesting analysis was published by The Motley Fool about how the Coronavirus could affect the annual cost-of-living adjustment (COLA) Social Security beneficiaries rely upon for an increase in benefits. As the article points out, the Coronavirus may have both positive and negative impacts on Social Security’s COLA in 2021.
Social Security’s COLA is determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which consists of several different major spending categories and subcategories that track the prices of goods and services. The inflation rates of these categories and subcategories help determine Social Security’s COLA each year. The Motley Fool looked at two CPI-W categories, crude oil prices and food and household good prices. So far, it looks like the impact of the Coronavirus has led to a reduction in the price of crude oil, but an increase in the price of food and household goods. The article indicates that crude oil is down about 15 percent, which makes up about 8 percent of the criteria for determining Social Security’s COLA. China reported a 5.4 percent increase in the price of food and household goods and that category accounts for about 3.3 percent of Social Security’s COLA determination.
Everyone wants a pay increase so many people who receive Social Security benefits pay very close attention to the COLA announcement each year, but it is important to remember that an increase in COLA is only an increase of benefits based on the cost of living, so COLA does not necessarily give beneficiaries any more buying power. In fact, as the article points out, the CPI-W’s use in determining the annual COLA increase is flawed because retired workers have seen their purchasing power decline by 18 percent in the last 10 years and by 33 percent since 2000. The increasing costs of housing and medical care are reducing the purchasing power of Social Security beneficiaries because these two categories are not weighed heavily enough to determine COLA each year, according to the article. It is time to determine COLA increases in another way.
Information About Coronavirus
The Centers for Disease Control and Prevention (CDC) are taking the Coronavirus seriously and know that information is one of the best ways to combat the spread illnesses. Below is some information from the CDC website, cdc.gov, to inform the public about how Coronavirus can spread and what the symptoms are.
Person-to-person spread
The virus is thought to spread mainly from person-to-person. Between people who are in close contact with one another (within about 6 feet). Through respiratory droplets produced when an infected person coughs or sneezes. These droplets can land in the mouths or noses of people who are nearby or possibly be inhaled into the lungs.
Spread from contact with infected surfaces or objects
It may be possible that a person can get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes, but this is not thought to be the main way the virus spreads.
Can someone spread the virus without being sick?
- People are thought to be most contagious when they are most symptomatic (the sickest).
- Some spread might be possible before people show symptoms; there have been reports of this occurring with this new Coronavirus, but this is not thought to be the main way the virus spreads.
How easily does the virus spread?
How easily a virus spreads from person-to-person can vary. Some viruses are highly contagious (spread easily), like measles, while other viruses do not spread as easily. Another factor is whether the spread is sustained.
Symptoms
For confirmed Coronavirus disease 2019 (COVID-19) cases, reported illnesses have ranged from mild symptoms to severe illness and death. Symptoms can include:
- Fever
- Cough
- Shortness of breath
CDC believes at this time that symptoms of COVID-19 may appear in as few as 2 days or as long as 14 days after exposure.
