How often does the minimum wage increase with the cost of living? Each year, the L&I is required by law to make a cost-of-living adjustment. The CPI-W is the measure used to calculate this adjustment. Read more on our Minimum Wage page to learn how to calculate your exact salary based on the cost of living index in your state. It will also tell you when the minimum wage will be the highest and lowest.Some business leaders worry that minimum wage increases will increase prices and negatively impact economic growth. However, new research suggests that this effect is temporary and much smaller than previously believed. According to a new study published by the Upjohn Institute, the pass-through effect on prices is smaller than previously thought. The paper also shows that minimum wage increases can increase prices of goods and services but are unlikely to reduce overall spending. This means that the minimum wage will still increase prices even more for those on the lower and middle income levels.However, when factoring in inflation, the minimum wage has flattened or decreased. Today, it would be worth roughly $26 per hour. That would translate to $50,000 per year. However, if productivity gains kept up with the past fifty years, the minimum wage would be worth more than $26 an hour. In the meantime, minimum wage has decreased in purchasing power. Fortunately, many cities, states, and businesses have begun to raise their wages.