Kiwis on the minimum wage will have an extra $1.50 an hour in the pocket from tomorrow.

The increase, which comes in from April 1st, brings the wage to $22.70 an hour. 

The government says the impact on inflation will be minor, but the ACT Party says thousands of job losses are now possible. 

NZ Initiative Chief Economist Eric Crampton told Andrew Dickens it's possible, especially if the economy turns sour.

"Once you get into a downturn, there will be pressures for job losses," he said. 

"Employers will be getting less revenue, they may be downsizing and finding ways to cut costs."