Final answer:
A COLA, or Cost-Of-Living Adjustment, is the increase in worker salaries to adjust for inflation, ensuring wages keep pace with rising prices.
Step-by-step explanation:
An increase in worker salaries to adjust for inflation is known as a Cost-Of-Living Adjustment (COLA). In the 1970s and 1980s, labor unions negotiated wage contracts that included COLAs to ensure that wages kept pace with rising prices due to inflation. These adjustments are a form of indexing applied to wages, and they work by providing an automatic percentage increase based on the rate of inflation. For example, if a contract included COLA plus 3%, and inflation was 5%, then wages would increase by 8%. If inflation were to rise to 9%, then the wage increase would be 12% accordingly.