The WA Chamber of Commerce and Industry (CCI) has hit out against a planned minimum wage increase.

The Fair Work Commission approved a new minimum wage of $18.29 an hour this week, meaning an extra $22 a week for the country’s lowest paid workers.

The CCI says the decision shows a clear lack of understanding of the challenges facing WA businesses, because the rate of the increase is higher than WA's inflation rate.

“The decision from the Fair Work Commission does not reflect the challenging conditions faced by many businesses in WA and across the country,” CCI director of advocacy Cath Langmead said.

“With the WA unemployment rate at 10.4 per cent and the jobless rate still stubbornly high at 5.9 per cent, now is not the time to make it harder for WA businesses to create jobs.”

But the WA Council of Social Service (WACOSS) wants the minimum wage to increase by $45 a week.

WACOSS says wages have fallen behind the cost of living for those on the lowest wages.