The Maori Party is at odds with the Government over the increase in the minimum wage to $13.75, calling it pitiful.
Maori Party MP Te Ururoa Flavell said the Government had the opportunity to address low wages by increasing them to a more realistic level, which he said would be $16 an hour.
Labour Minister Simon Bridges announced the 25-cent increase today, saying he wanted to balance protecting low income earners and employers and protecting jobs.
The training and new entrants' minimum wages will also increase from $10.80 to $11, 80 per cent of the adult minimum wage.
He said the Department of Labour recommended the minimum wage be increased to $13.80 an hour.
"I don't think there is any science in this; there are economic theorists and they will tell you all sorts of things, but what I do know is there comes a point when you are putting people out of jobs and I'm very clear that at $15 we are putting people out of jobs.
"This is a pro-jobs Government that doesn't want to do that."
Mr Bridges said he did not have any evidence that jobs would be lost as a result of an increased minimum wage.
Mr Flavell said the Government should focus on reducing wage inequality by targeting the wages of excessively high income earners.
"There is researched evidence to show that increasing the minimum wage doesn't lead to massive job losses and it can in fact increase productivity and economic efficiency," said Mr Flavell.
Labour spokeswoman on labour issues Darien Fenton called the increase a slap in the face for the poorest paid workers.
Earlier this month a living wage campaign called on businesses and local councils to pay workers $18.40 an hour.
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."
Service and Food Workers Union national secretary John Ryall said the Government had condemned low paid workers to poverty with the increase.
"While the Prime Minister pocketed an extra $150 a week December's pay rise, New Zealanders lowest paid workers will get a miserable $10 increase if they are lucky enough to get a full week's work," said Mr Ryall.
- APNZBy Kate Shuttleworth @K8Shuttleworth Email Kate