The adult minimum wage will increase from $14.25 to $14.75 an hour from April 1, Workplace Relations and Safety Minister Michael Woodhouse said today.

The starting out and training hourly minimum wages will also rise, by 40c to $11.80 an hour - 80 per cent of the adult minimum wage.

"The Government has taken great care in setting these wage rates to ensure we maintain the balance between protecting our lowest paid workers and ensuring jobs are not lost," Woodhouse said.

"While annual inflation is currently at 0.8 per cent, we are increasing the minimum wage by 3.5 per cent which will directly benefit 115,100 workers and increase wages throughout the economy by $60 million per year.

"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 5,000 jobs per year," he said.

That compares with the Living Wage of $19.25 an hour, adopted by some businesses in response to a campaign by Living Wage Aotearoa, to provide an income to allow workers "to not just survive, but thrive".

Council of Trade Unions President Helen Kelly said over 300,000 workers were on or near the minimum wage.

"The mean-spirited increase announced today means thousands of hard working families facing another year of struggling to make ends meet," Kelly said.

"The economy can afford higher pay increases. From the bottom of the recession in 2009 to 2013, productivity rose 10.1 per cent but real wages rose only 1.5 per cent. Workers are due a big catch-up."

Unite Union welcomed the 50c an hour increase, but said the minimum wage itself was of little benefit if employers still used zero-hour contracts, or contracts without a guaranteed minimum number of hours.

"The entire benefit of a pay rise can be lost for someone on around 20 hours a week if they lose only one hour's pay," said Unite union national director Mike Treen.

Unite wanted the Government to progressively increase the minimum wage from its current level of about half the average wage to two-thirds of the average wage, which was the standard in New Zealand in the past.

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