escalator clause

escalator clause   n.  A provision in a contract stipulating an increase or a decrease, as in wages, benefits, or prices, under certain conditions, such as changes in the cost of living.

Main Entry: es·ca·la·tor clause
Pronunciation: 'es-k&-"lA-t&r-
Function: noun
1 : a clause in a contract that provides for an increase in the amount of the payments made under the contract to reflect an increase in costs or the raising of a government-imposed cap on costs
2 : a clause in an employment contract that provides for an increase in wages to reflect a rise in the cost of living but prohibits a decrease to reflect a drop in the cost of living