Labour Minister Simon Bridges today announced the minimum wage is to rise to $13.75.
This is a 25 cent increase on the current wage of $13.50, despite calls for the wage to rise to $15 an hour.
The training and new entrants' minimum wages will increase from $10.80 to $11, which is 80 per cent of the adult minimum wage.
"Setting these wage rates represents a careful balance between protecting low paid workers and ensuring jobs are not lost as the economic recovery gains pace."
He said the Government is firmly focussed on growing the economy and boosting incomes.
"Through our Business Growth Agenda we are creating opportunities to help grow more jobs in New Zealand, for New Zealanders," said Mr Bridges.
The new minimum wage rates will come into effect on April 1.
Labour's spokeswoman on labour issues Darien Fenton said a 25 cent increase in the minimum wage was "miserable".
She said an extra $10 a week pay rise for struggling workers was a slap in the face.
"Four out of ten of the Kiwi children living in poverty and hardship come from working families. An extra $10 a week, less tax, won't be enough to make their lives any easier."
She said Labour would lift the minimum wage to $15 an hour, giving people an extra $50 a week.
Green Party industrial relations spokeswoman Denise Roche said the 25 cent increase would do little to help the working poor and a bigger increase was needed.
"The National Government disguises its inaction on the growing gap between the rich and poor with tiny rises like today's 1.9 per cent increase to the minimum wage - chief executives' pay went up nearly 10 per cent last year."
First Union general secretary Robert Reid said 25 cents an hour would do little to reduce poverty.
"$13.75 is an absolute insult to hundreds of thousands of low paid workers."
"Our poverty wages see families going without food and proper housing, and whole communities being ripped off by dodgy loan sharks as it becomes the measure of last resort in desperation."
Mr Reid said First Union supported the living wage campaign, which set a liveable hourly rate as $18.40 an hour.
Service and Food Workers Union National Secretary John Ryall said the Government had condemned low paid workers to poverty with its increase to the minimum wage.
"While the Prime Minister pocketed an extra $150 a week in December's pay rise, New Zealand's lowest paid workers will get a miserable $10 increase if they are lucky enough to get a full week's work."
"The 25 cents increase in the minimum hourly wage is an insult to hard-working New Zealanders and a disgrace," he said.
Mr Ryall said an independent report, published two weeks ago, identified $18.40 an hour as the New Zealand living wage - the income necessary not just to survive, but to live a decent but modest life.
"Nobody could survive on $13.50 and nobody can survive on $13.75 - there is growing concern in New Zealand about poverty and inequality and this announcement will add to that concern," said Mr Ryall.