The adult minimum wage will go up by 50 cents an hour from April 1.
Workplace Relations and Safety Minister Michael Woodhouse announced today that the minimum wage for adults would increase from $14.25 to $14.75 an hour.
The starting-out and training hourly minimum wages would also increase by 40 cents, to $11.80 an hour.
The Government had taken great care in setting wage rates to ensure they maintained the balance between protecting the lowest paid workers and ensuring jobs were not lost, Mr Woodhouse said.
"$14.75 per hour is an appropriate increase given current economic and labour market conditions. It balances the needs of both businesses and workers whilst having minimal impact on the wider labour market.
"An increase of the minimum wage to $14.75 ensures there is no restraint on jobs while still increasing the incomes of the lowest paid. A higher increase to even $15.50 would constrain employment growth by up to 5000 jobs per year."
New Zealand Council of Trade Unions President Helen Kelly said today's announcement showed a disrespect for the families of New Zealand.
"Yesterday new figures were released for a living wage, with the rate identified at $19.25. The mean-spirited increase announced today means thousands of hard working families facing another year of struggling to make ends meet."
She said the increase would barely cover the loss of two 10 minute tea breaks from March 6.
"Over 300,000 workers are now on or near the minimum wage as collective bargaining rights have been decimated, insecure work arrangements have become widespread and unfettered migration has been allowed to flood low paid, low skill work areas.
"What Government is clearly saying today is - expect more of this," Ms Kelly said.