Following stalled talks where unions demanded a 16% rise and businesses warned of economic risks, President Gustavo Petro decreed on December 30 a 23% increase in Colombia's 2026 minimum wage, to 1,750,905 pesos plus 24.5% higher transportation aid of 249,095 pesos, totaling 2 million pesos monthly. The hike benefits 2.4 million formal workers and aims for an ILO 'vital wage,' but prompts debate on inflation, SME impacts, and competitiveness.
The adjustment raises the wage from 2025's 1,423,500 pesos, delivering 18.7% real growth and 36% cumulative under Petro—the highest since the 1960s. Labor Minister Antonio Sanguino said it narrows the gap to the 1.8 million pesos vital wage benchmark, spurring consumption for over 5% GDP growth, per Finance Minister Germán Ávila.
Business groups reiterated concerns post-announcement. Tourism's Anato President Paula Cortés Calle highlighted mismatches with 8-12% sector forecasts and dollar strength at 3,700 pesos. Andi's Bruce Mac Master noted 11 million informal workers face cost hikes without gains, pressuring SMEs. Fenalco's Jaime Alberto Cabal deemed it 'disproportionate' vs. inflation.
Unions, including CUT's Fabio Arias, celebrated as a historic correction to inequalities, arguing it curbs unemployment, boosts demand, and avoids price spirals due to desindexing over 200 items—including VIS/VIP housing plans.
Ripple effects include full increases for one-wage pensioners, IPC-linked adjustments for others, VIS housing caps rising to 262 million pesos, and potential 200-peso public transport fare jumps (Asocapitales). Colombia's wage equates to $540, fifth in Latin America.
