Salary increase of 3.5% in Colombia does not convince the unions of workers 0:44
(CNN Spanish) --
Colombia will have an increase in the minimum wage starting in 2023. After an agreement between the government, businessmen and the labor unions, the increase will be 16%, announced President Gustavo Petro.
In this way, the minimum wage will go from 1,000,000 Colombian pesos (about US$209 at the current exchange rate) to 1,160,000 pesos (around US$242).
The new minimum wage goes into effect on January 1, 2023.
This is how the minimum wage has increased in Colombia in recent years
Petro assured that he hopes that with this increase "the purchasing power, the level of income" of Colombians will be recovered and that "it will become the engine of economic growth."
In addition, the president announced that there will be a greater increase in the transportation subsidy that will be 20%, 140,606 pesos, about US$29.
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Thus, the total minimum wage, including transportation assistance, will be 1,300,606 pesos, around US$272.
To establish the percentage increase in the minimum wage, total factor productivity (1.24%), inflation of poor and vulnerable households (14.34%) and Gross Domestic Product (9.4%) were taken into account. %).
Mexico will increase the minimum wage by 20% in 2023
Colombia registers year-on-year inflation of 12.5%, according to the most recent DANE data corresponding to the month of November.
The economic outlook for 2023 is not encouraging.
Amid fears of a global recession, the International Monetary Fund estimates that Colombia's real GDP will grow 2.2% next year compared to 7.6% growth in 2022.
The increase in the minimum wage for 2022 defined in 2021 had been 10.7%.
How has the minimum wage evolved in Colombia?
From 1980 to date, annual increases in the monthly minimum wage have ranged from 3.5% to 27%.
The year with the highest increase was 1989, while the lowest was 2021 (which was set at 2020 amid the coronavirus pandemic).
The late 1980s and early 1990s saw the most significant percentage increases, as can be seen in the graph below.
If the last two decades are taken into account, the largest increases in percentage terms are those that came into force in 2000, 2001 and 2022, which were around 10%.
The real value of the increases depends on inflation, which in its year-on-year measure has already exceeded the figure set by the Government for this 2022 by just over one percentage point.
With information from Rocío Muñoz-Ledo and Ángela Reyes
Colombian minimum wage
