With all the data on the table, this week the letters of employers and unions will be revealed regarding how much the minimum wage should increase for next year, in the midst of an environment of cordiality but distance that the Government tries to overcome to reach an agreement.
This Monday -December 9th- the Permanent Commission for Coordination of Salary and Labor Policies was formally installed, which started a few days ago with the Productivity Subcommittee and has already heard the reports from Dane, the Bank of the Republic and the Ministry of Finance; on productivity, inflation and economic projections.
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The Minister of Labor, Gloria Inés Ramírez, who heads these meetings On behalf of the Government, he explained that the information received will allow the labor confederations and unions to make grounded proposals consistent with the economic reality of the country, thinking about overcoming inequalities, without generating fiscal instability.
“El Dane reported that the Consumer Price Index had an annual variation of 5.2%, which means inflation with a decreasing trend, great news for all businessmen, workers and in general for the entire population. Colombian,” said Ramírez Ríos, who also said that the contribution of salaries to national income in 2024 has been 2%.
Minimum wage negotiation – Mintrabajo.
Courtesy – Mintrabajo / API
In this session it was also known that the Bank of the Republic agreed with the Dane, in an inflation in 2024 of 5.2%, and that projected for 2025 of 3%, with which the Minister of Labor made it clear that ” We are going to continue analyzing these technical inputs that will allow us to energize and flow this tripartite dialogue. The data show that it is the lowest level of inflation since October 2021, when inflation continued its upward trend. If we have lower prices there will be a lower cost of living for Colombian households.”
In the context of the tripartite dialogue, it was also highlighted that maintaining purchasing power is an impetus to improve the income in real terms of the working population, which provides a greater boost to demand, more sales for entrepreneurs and strengthens the economic reactivation.
“This is accompanied by the measures that we are going to continue reviewing so that some goods, services and articles are deindexed, which is essential for us. There is concern in cases such as housing and what is happening with microcredits that have had a drop… What is sought is for this dialogue to flow and we can dynamically build the figure for the increase in the minimum wage for 2025,” Ramírez concluded. Rivers.
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Points aside
At the same time as the Minister of Labor, the labor confederations also delivered their perceptions. Fabio Arias, president of the Unitary Central of Workers (CUT), indicated that they believe there will be no agreement.
Minimum wage negotiation – Mintrabajo.
Courtesy – Mintrabajo / API
The CUT spokesperson maintained that they will remain firm that the increase is double digits, after knowing the macroeconomic data from Dane, the Ministry of Finance and the Bank of the Republic, next Wednesday the workers and the union bench “will put on the table what is our proposal exact within the two-digit framework, about what we aspire for the 2025 minimum wage.”
Because of the questions “that the business community has been asking about the data reported by the Dane, including questioning the work of the Dane, and questioning its own methodologies, because it is those of the OECD (Organization for Economic Cooperation and Development) that defend to the methodology, we believe exactly that there will be no agreement in the Concertation Commission.”
According to Arias, from the CUT they will persist in the double digitsespecially “looking at the inflation caused, the productivity data that remains much higher.”
In addition, he indicated that the “labor (reform) is what we have always demanded be applied, rather than the total ownership of the factors, which is what businessmen like, because this year they did not like the contribution more of wages to economic growth, plus what we call a ‘wage gap’ of the last 18 years at the negotiation table, where by not applying labor productivity they have always left us with a very high wage gap, which is at the time of today 35 points.”
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That said, he pointed out that they are going to tell the Government that this, “must be the opportunity to begin to reduce that wage gap, which is why we are talking about double digits.
For his part, the president of Fenalco, Jaime Alberto Cabal, disagreed with Arias, as he was emphatic that next year’s increase in the minimum wage cannot be so high and, in fact, it should be much closer to the figure. of inflation.
Prudent levels
In the midst of this country conversation, the Labor Market Observatory and the Social Security of the Externado University published a report in which it suggests that some value between 6.5% and 7% could represent a sensible increase for the year 2025.
Minimum wage negotiation – Mintrabajo.
Courtesy – Mintrabajo / API
For these economists, “the parameter relative to the bargaining power of the parties depends on several factors. The business cycle: When the economy booms, employers are likely to grant larger wage increases. Also from the implementation of other economic policies.”
Stefano Farné, director of the Observatory, said that “for example, if the Government approves a tax reform that lowers taxes on companies, employers will be willing to grant higher salary increases. Likewise, it depends on the political orientation of the government in power. The current trend to value more the proposals of the unions; governments of the past were less prone.”
In this way, they explain that throughout this process it is essential to consider that in 2024 there was a real increase close to 6%, the most significant since 1995, while the inflation projection for 2025, lower than that of 2024, favoring an improvement in the purchasing power of the minimum wage and leaving an opportunity to consolidate real gains in workers’ income.
Furthermore, they closed by saying that productivity, measured by the Dane, shows variations sensitive to temporary factors, with an increase of 1.73% in 2024 compared to a decrease of 1.71% in 2023. Therefore, according to its concept, it is prudent to base the adjustment on a long-term average, minimizing the impact of economic fluctuations.
VALENTINA DELGADILLO ABELLO AND DANIEL HERNÁNDEZ NARANJO
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