The Council of Trade Unions says New Zealand's productivity record could be improved by a bigger boost to the minimum wage than is being considered by the Government.
Prime Minister John Key has hinted at a new $13 an hour rate, representing a 2% increase.
CTU President Helen Kelly says that's not good enough given inflation is 4% at present.
Ms Kelly says companies have under-invested in plant and machinery for years, leaving workers under-equipped and less productive because labour is relatively cheap, and a bigger increase in the minimum wage could boost productivity.
But Business New Zealand's chief executive Phil O'Reilly says raising the minimum wage would cost jobs.