Q Can you explain why people on Social Security are not getting (for the first time) a cost-of-living adjustment (COLA) for 2010? Things clearly cost more -- including Medicare -- and raises, new jobs, etc. are hard to come by. So why isn't there a COLA?

JUDI, ST. PAUL

A You're right. For the first time in 35 years, Social Security recipients aren't slated to get an increase in benefits next year. The projections suggest there may be no or minimal cost of living adjustments through 2012 for the system's 50 million-plus recipients.

The answer lies with changes in the country's main measure of inflation, the consumer price index (CPI). Social Security benefits are adjusted annually to reflect shifts in the CPI. This year, for example, beneficiaries received a hefty 5.8 percent increase, the largest jump in a quarter century. The gain largely reflected the soaring prices of oil and food. But oil prices are down sharply since mid-2008, as are prices for everything from homes to computers. The CPI actually recorded a decline -- what economists call deflation or a decline in the overall price level.

The good news is that benefit payments stay flat but don't go down during deflation.

That said, many elderly folks don't see falling prices. Many people on Social Security have seen their budgets squeezed by the falling value of their pensions and higher expenses, especially on medical bills. The elderly spend a lot of money on pharmaceuticals, doctor visits and other kinds of medical care. Those prices are rising at a rapid pace. In sharp contrast, many of the things that are falling in price, such as a computer or hotel rooms, are bought infrequently by many seniors.

The Bureau of Labor Statistics, the keeper of the CPI data, maintains the CPI-E. It's an experimental index geared to capturing inflation among the 62-and-over crowd. From 1982 to 2007, it ran at an average annual rate of 3.3 percent. That compares with a 3 percent rate with the CPI-W, which is the figure used to determine Social Security benefits. It reflects the spending patterns of wage-earners; it excludes families that get their primary income from Social Security and retirement pension. The gap is small, but it does add up over time.

Perhaps there is a rough form of economic justice at work. The oil-price-fueled 5.8 percent gain this year was unusually large. The planned zero increase next year is exceptional, too. But taken together, they average out.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.