The country's lowest paid workers will tomorrow see a boost to their paycheck from tomorrow.
The minimum wage will increase up a $1.20 to $17.70 tomorrow.
It will lead to an extra $48 a week for those on the lowest income bracket, which Workplace Relations Minister Iain Lees-Galloway says will significantly benefit them.
He told The Weekend Collective economic growth has not been matched by wage growth.
"Speak to any economist you like, and they will say that wage growth is what has been missing in the recovery since the Global Financial Crisis."
The Government wants to reach $20 an hour by 2021, which Lees-Galloway says is a significant increase.
The increase will put pressure on smaller businesses, but the Minister says that they have signalled this early to give them time to prepare.
"I have absolute confidence in our small businesses. They are resilient, they are agile, and I think they'd be able to adapt to this. I think what they will find is that it leads to improvement to productivity, and profitability overall."
He denies that the increase is a replacement for failures in the social welfare system. Lees-Galloway says that both the public and private sector have a role in the distribution of income.
"Good wages encourage a more productive economy, and that's something we need to focus on more in New Zealand."
Wages for those on the lowest tiers have stagnated over the last 20 years, Lees-Galloway says, and something needs to change.