Actual rise from 2023 low is second highest since 1985

Actual rise from 2023 low is second highest since 1985

The 2023 minimum wage It was set by agreement between unions and unions yesterday, on the last day that the two parties had by law to reach a joint figure.

The Government announced that next year’s salary readjustment will be 16%, with which the minimum will reach the figure of $1,160,000.

In addition, the transportation subsidy will grow 20%, to $140,000for a total of 1’300,000.

(See: Increase in the minimum wage for 2023 will be 16%).

This 16% increase it is the highest in this century, but if we look at it in real terms, that is, discounting inflation and the salary readjustment, next year’s increase will be the second highest since 1985.

The expectations survey of the Bank of the Republic December estimates that inflation will close the year at an average of 12.64%.

If so, the real increase in wages in 2023 will be 3.36% compared to the rise in prices experienced by households, only surpassed in the last four decades by what occurred a year ago, which was 4.45%when the agreed salary increase for 2022 was 10.07% and inflation closed at 5.62% in 2021.

(See: Guilds and unions will speak with Petro before giving the minimum figure).

The settlement of the figure for the 2023 minimum wage occurs in a complex scenario, with the highest inflation data in 23 years, and with the lag of the effects of the pandemic on the household economy.

And the announcement of the increase was made by the unions and unions in the company of the President of the Republic, Gustavo Petro.

(See: Key day to set the readjustment of the minimum).

“I hope that this increase in the minimum wage will recover the purchasing power that has been lost in recent months due to inflation, recover the increase in the average productivity of the economy, and also make internal demand in Colombia jump in the most vulnerable sectors, in such a way that we can correct not only a situation of growing hunger, but also that it becomes an engine of economic growth”, Petro said.

In addition, the Minister of Labor, Gloria Inés Ramírezdescribed the agreement as “historic”, since the inflation of the poor was taken as the basic figure, instead of the general data. “We have started from 14.4%, because that is where there has been the greatest impact on the basic food basket”said the minister.

(See: Minimum wage: other measures to strengthen purchasing power).

Unlike other years, businessmen did not present a figure at the table agreement, but instead opted to seek a joint figure with the unions.

Bruce MacMaster, president of Andi,
said “This is proof that some of the most important issues can be better decided through processes of conversation, agreement and joint construction, among the different sectors of Colombian society.”

From Fenalco, Jaime Alberto Cabalhighlighted that the unions’ strategy of not presenting a specific figure “gave positive results”and that the increase reflects “the great concern that remained at the negotiation table to recover the purchasing power of the workers’ wages.”

On the other hand, the president of Acopi, Rosmery Quintero, said that although the conciliation regarding the salary readjustment is celebrated, It is necessary that small and medium-sized companies have instruments that allows them to strengthen themselves to continue generating employment.

Quintero had expressed that the increase should not be above 14%.

Another union that had raised its voice along these lines was that of the builders, Camacol.

“We know that the pressure on the prices of the basic basket demanded a significant effort to recover the purchasing power of households. However, the challenge will always be to ensure that this increase translates into more formal employment”
said Edwin Chiviri, president (e) of Camacol.

allies, the alliance of 40 unions and business associationssaid that he values ​​the agreement reached in the Concertation Commission, “But at the same time, it warns that challenges remain on the table in the labor market that will require a greater effort from employers in the creation of formal employment.”

Additional measures agreed

In addition to the number of salary increase, Other measures were defined.

The first is the deindexation of 204 goods and services that increase with the minimum.

The minister said that today will be published a first decree with 50 activities.

A second measure will be subsidies around fertilizers and agro-inputs. And there was talk of seek measures to gradually reduce energy rates, the monitoring and controlled control of drug prices and there was talk of working to lower the formula with which the usury rate is set.


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