Minimum Wage
Fiscal Risks and Anti-Inflation Measures After Colombia's 2026 Minimum Wage Decree
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The Autonomous Fiscal Rule Committee (Carf) warns that the recent 23% minimum wage hike to $2 million—decreed on December 30—could cost $5.3 trillion in 2026 (0.3% of GDP), complicating fiscal sustainability. Labor Minister Antonio Sanguino announced plans to desindex key goods from the wage and provide SME relief to curb inflation.
The Senate approved on Tuesday the adjustment that raises the minimum wage to $553,553 retroactively from May 1.
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DANE reported a 10.9% unemployment rate for January 2026, the lowest in recent history for a first month of the year, despite a 23% minimum wage increase. Informality dropped to 55%, and the employed population grew by 324,000 people. Yet, these official figures are sparking political polarization.
The government has decided to negotiate solely with the UGT and CCOO unions on the 2026 minimum wage (SMI) increase, after realizing it cannot count on the CEOE and Cepyme employers' associations. Experts propose a 3.1% rise if it remains exempt from IRPF tax, raising it to 1,221 euros monthly in 14 payments, above 60% of the average salary. This deal aims to cover inflation and prevent companies from offsetting the increase through salary supplements.
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Mexico's Employers' Confederation (Coparmex) will provide technical support for President Claudia Sheinbaum's goal to raise the minimum wage to 2.5 times the value of the food and non-food basket by 2030, with annual responsible reviews. In Baja California, the minimum wage will increase from 419 to 440 pesos daily starting January 1, 2026. This policy aims to strengthen family economies and formal employment without undermining competitiveness.