Rural Wage Cost of Living Adjustment (COLA)

The RW-COLA would be a supplemental wage adjustment for workers employed in designated rural areas, designed to offset the rising cost of living and boost the limited economic opportunities often found in those regions.

Below is a summary of the idea of the RW-COLA Bill that would be introduced to bring this program to life. As always, the exact language matters and is subject to change. Note that this page is more of an actual bill summary compared to other pages on the site to show how exactly this might work, and that we can have the government work for people, you know, the whole point of the job. There will be a possible initial draft for Virginia midway through that is tailored to our state to benefit the counties of the Ninth District the most.

The Rural Wage Cost of Living Adjustment (RW-COLA) Program is established to address the disproportionately high cost of living and limited economic opportunities in designated rural areas of Virginia and other such locations around the USA. The program aims to improve the affordability of living and working in these areas, attract and retain essential workers, and stimulate local economic development.

Definitions:

Rural Area: A county designated as “Rural” by the local State Department of Rural Development, based on the following criteria: Population density below [X] persons per square mile, poverty rate above [Y]%, and limited access to essential services (healthcare, education, utilities). The list of designated Rural Areas will be reviewed and updated annually. Each state would be able to set their own adjustment level tailored to their situation.
Essential Worker: An employee in a designated Rural Area employed in a critical sector, including (but not limited to): Healthcare, Education (K-12 and Higher Education), Logistics, Public Safety (Law Enforcement, Firefighters, Emergency Medical Services), Utilities (Water, Electricity, Internet).
RW-COLA Adjustment: The supplemental wage adjustment provided to eligible Essential Workers in designated Rural Areas.

Eligibility:

Employee must be employed within a county designated as “Rural” by the local State Department of Rural Development. Employee must be classified as an “Essential Worker” as defined above. The RW-COLA Adjustment will be tiered, with higher percent adjustments for lower-wage workers. The maximum RW-COLA Adjustment will be capped at $100 per week. An individual state can increase this cap limit, but not decrease it.

RW-COLA Adjustment Calculation:

The RW-COLA Adjustment will be calculated as a percentage of the employee’s base wage, using a Cost of Living Index (COLI) specifically tailored to rural areas. The COLI will be updated annually by the local State Department of Finance.

The Caps can exist per week or per tier, subject to the State's designation. Same with the number of tiers to properly target the area's rural workers.

Possible Virginia Numbers (to be adjusted based on state budget and needs):

Rural Designation Threshold: Population density < 45 persons/sq mile per VA county
Annual State General Fund Allocation: $5 million
Target Annual Federal Funding: $2 million
Wage Tiers:
- Tier 1: Wage < $37,500 – 10% adjustment
- Tier 2: Wage between $37,501 and $70,000 – 5% adjustment
- Tier 3: Wage between $70,001 and $140,000 – 2.5% adjustment
- Etc.
Weekly Adjustment Cap: $100
Projected VA Yearly Jobs Boosted at this Funding: 2000-5000

Funding:

The RW-COLA Program will be funded through a combination of State General Fund Allocation and Federal Rural Development Funds.

State General Fund Allocation: $5 million annually will be allocated from the State General Fund to the RW-COLA Program.
Federal Rural Development Funds: The State Department of Rural Development will actively pursue grants and partnerships with federal agencies (USDA, EDA, etc.) to supplement State funding. A target of $2-5 million in Federal funding will be sought annually per state, per need.

Administration:

The State Department of Rural Development will be responsible for administering the RW-COLA Program, including:

Designating Rural Areas.
Calculating and updating the Cost of Living Index.
Processing applications and verifying eligibility.
Distributing funds to participating employers.
Monitoring program effectiveness and reporting to the legislature.

Participating Employers:

Employers must apply to participate in the RW-COLA Program.
Participating employers will be required to meet certain criteria, including demonstrating a commitment to employee retention and providing a safe and supportive work environment.
The Department of Rural Development will provide technical assistance to participating employers.

Reporting and Evaluation:

The Department of Rural Development will submit an annual report to the legislature, detailing the program’s effectiveness, including:

Number of participating employers and employees.
Total amount of RW-COLA adjustments distributed.
Impact on wages and cost of living in designated Rural Areas.
Recommendations for program improvements.

Rural Wage Cost of Living Adjustment (RW-COLA)