Colombia's minimum wage rose 23% for 2026, prompting over 14% of firms to switch from integral to ordinary salaries. A study by the Colombian Federation of Human Management indicates 32% of companies cut expenses while 24% turn to AI automation. Meanwhile, J.P. Morgan notes a robust labor market beforehand, with unemployment at historic lows.
The 23% minimum wage increase for 2026 has prompted varied responses from Colombia's business sector. According to a study by the Colombian Federation of Human Management (Acrip), over 14% of firms with integral salaries shifted to ordinary ones, while more than 50% remain undecided. 32% of companies have adopted austerity measures, cutting expenses to offset financial strain. Additionally, 24% are focusing on process automation using artificial intelligence (AI).
Regarding salary adjustments, 82.4% of surveyed firms plan raises for 2026, with 47.1% implementing them in January and 22.8% in February. Increases average 13.3% for base personnel, 8.2% for technicians, 6.9% for professionals, 6.4% for mid-management, and 6.3% for high management, exceeding prior projections of 6% for upper levels.
Juan Carlos Ramírez, Acrip's president, stated: "the disproportionate minimum wage increase decreed by the Government has impacted companies' finances, leading them to devise strategies to mitigate its effects". He added that "the labor market lacks the financial capacity to raise salaries to that level".
Meanwhile, a J.P. Morgan report underscores the labor market's strength in 2025, prior to the hike. National employment grew 2.6% and urban 3.9%, driven by sectors including restaurants and hotels, manufacturing, transport, agriculture, and the public sector. Unemployment dropped 11.35%, reaching 8.3% nationally and 8.1% in urban areas in December, historic lows. The urban occupation rate rose to 61.6%, the highest since 2016. Real wages in manufacturing and commerce increased 2.6% in 2025.
For 2026, J.P. Morgan forecasts continued real wage growth from the minimum wage adjustment, though it cautions that rising informality could temper the impact. Labor participation rates, however, remain below 2010-2019 averages, constraining economic potential.
