The Government is to raise the minimum wage by 25 cents an hour to keep it in line with increases in the cost of living.
From April this year, the current rate of $12.50 per hour will rise to $12.75.
The minimum wage for training and new entrants will also rise from $10 an hour to $10.20.
Those on the minimum wage, working a 40-hour week, will get an extra $10 a week in their pay packet.
Minister for Labour Kate Wilkinson says the increase is linked to the rate of inflation and is confident that the increase will not discourage businesses from taking on new staff.
However, the Council of Trade Unions says the latest increase is insufficient to help those on the lowest wages meet their basic costs.
It describes the increase as mean and a missed opportunity to close the wage gap with Australia.
CTU president Helen Kelly says a 25c rise will do little to help people who are struggling to pay their bills.
The PSA's National Secretary, Richard Wagstaff, says because of improvements in the minimum wage and pay increases in other sectors, the idea of a wage freeze for his union's members has lost all credibility.
Labour MP Trevor Mallard says international evidence shows spending can be stimulated within the economy by rewarding low wage people with better pay rates, though he concedes there will be a few jobs that aren't viable at a higher rate.