Colombia's Minimum Wage Soars 23.7%, Sparks Business Backlash

The Colombian government has announced a historic 23.7% increase in the minimum wage, raising it to 2 million pesos (approximately $535) for 2026, including transportation subsidies. President Gustavo Petro emphasized that this decision aims to improve living conditions for workers and reduce inequality, despite acknowledging potential inflationary pressures. This unilateral move follows failed negotiations with business and labor representatives, leading to significant criticism from business leaders who warn of adverse effects on inflation and employment. The increase is expected to generate additional public spending of around 400 billion pesos for every 1% rise in wages, raising concerns over the economic impact on vulnerable citizens.

Key Details: • Minimum wage set at 2 million pesos for 2026, including transport subsidy. • Increase calculated based on inflation and productivity indicators. • Critics warn of inflation risks and negative impacts on employment. • Each 1% wage increase could cost the government an additional 400 billion pesos.