Colombian President Gustavo Petro announced a 23.7 percent increase in the minimum wage for next year, which will affect approximately 2.4 million employees. In a nationally televised address, the president detailed that the minimum wage will be 2 million pesos (approximately US$540 at the current exchange rate) in 2026.

He specified that the minimum living wage, that is, the wage that covers not just individual but family needs, will be 1,746,882 pesos (about US$471), plus a transportation allowance. He also noted that real wages, not nominal wages, would thus experience an 18.7 percent increase.

RELATED:

Ecuador Limits Border Crossings With Peru and Colombia to One Checkpoint Each

Furthermore, he warned that the wealthiest sector would likely express discontent with the increase.

“There will be insults, people will say we’re wrong, they’ll say the economy will grind to a halt, they’ll say many employees will lose their jobs. But right now, up to this moment, we have the lowest unemployment rate of the entire century,” the Colombian head of state declared.

He asserted that the measures will reduce poverty. “I believe employment will increase because demand will increase, and businesses will sell more; therefore, they will need more workers,” he stated.

According to the president, the 18.7 percent increase is more than what was achieved during the three years of his administration. “In the last year, we raised real wages more than the sum of the previous three years, and we practically doubled real growth to 36 percent,” he explained.

While he expressed confidence that the measure will reduce inequality, he acknowledged that there will be upward pressure on prices. “Of course there is a struggle in Colombia to distribute wealth. The problem is that this government is doing the opposite of what all previous governments did, which is to concentrate wealth at the top, in a group, a club of privileged individuals,” he emphasized.

Petro asserted that the goal is to democratize wealth for working people, who make up the majority of the Colombian population. “If the people of Colombia live better, the conditions for peace will be built,” he stated.

The increase in the minimum wage for next year was decided via presidential decree because business associations and labor unions could not reach an agreement on the issue. The former proposed a 7.2 percent increase, while the latter wanted a 16 percent increase.

The measure will take effect on January 1st.

From teleSUR English via This RSS Feed.