This Tuesday, November 28, the consultation table between labor unions, businessmen and the Government was set up, and the discussion officially began to increase the minimum wage in Colombia in 2024.
Currently, the minimum in the country is 1,160,000 pesos, while the annual inflation in October was 10.48% and the GDP in the third quarter reported a decrease of -0.3%.
“This is a construction table and I call for us to do our best to contribute to the country in a scenario where we are developing. On behalf of the Government and the Ministry of Labor, we have an open mind to contribute and move forward ,” Gloria commented. Inés Ramírez, the Mintrabajo, to open the negotiations.
The three technical elements that will be considered to define the increase in the minimum wage for 2024 are inflation for the current year, the evolution of productivity and inflation projection for the next year.
“The institutional idea and mandate is that the purchasing power of wages should not be reduced,” explains Professor Hernando Zuleta, from the Faculty of Economics of the Universidad de los Andes, in this respect, adding that it is expected that “” The increase is moderate so as not to affect households, especially the most vulnerable, who have lost the most purchasing power throughout the year.”
Regarding the positions of each of the parties in the negotiations on the increase, it is expected, based on the fact that the annual inflation in 2023 will close between 9% and 10%, that the unions will ask for a double-digit increase, while employers They have discussed moderation.
The Government, for its part, is in line to increase by 10%, and some experts and study centers, such as Anif or Fedesarrollo, insist that an increase of 9% could be harmful.
However, it should be taken into account that, by order of the Constitutional Court, the increase must exceed the level of inflation at the end of the year.
“It will be a very interesting discussion, but there is some uncertainty about what will happen with inflation. For example, a few years ago there was a very high increase in the nominal minimum wage, but part of that that increase is swallowed up by inflation, then the question is: we have an increase of at least 10%, if we can end the next year with an inflation of 5%, let’s say, that means a real increase of 5%. These types of things, such as future inflation or unemployment, will be fundamental when discussing, because we do not want a high minimum if the labor market can be depressed due to the reduction of economy,” said teacher Zuleta.
According to Bancolombia analysts, the minimum may increase by 12% and reach 1,300,000 pesos.
This is the result of this year’s discussion that brought the annual inflation reference cut to November (which will be 10.2%), where they added an increase in total factor productivity (TFP) of 0.8% (average of the last five years. ) and an excess of close to 1% (a value located at the lower end of the historical range considering the need to maintain pressures).
Regarding the dates, the table starts on November 28 and the first deadline to make a decision is December 15.
If there is no agreement that day, the sessions will continue and December 30 will be the maximum date for issuing and publishing the decree that sets the minimum wage and transportation assistance.
