In the next few days the discussion is expected to begin to define the increase in the minimum wage for 2022, and the increase that is estimated at least above 5% considering that inflation is already at a level of 4.58%, is one of the focuses of attention at this time.
(Increase in the minimum wage would affect the reactivation).
In addition to traditional factors such as inflation and the productivity indicator that the National Administrative Department of Statistics (Dane) will soon reveal, another concern is how this increase will impact the pocket of Colombians and how much it will cover their basic expenses. It is worth mentioning that the national minimum wage for 2021 was $ 908,526 and in addition to that, a transportation aid of the order of $ 106,454 was set.
In order to understand in detail the relationship between minimum wages in the different countries of the region and basic living costs, the labor consultant Littler Mendelson made a comparison, from several sources, on these two variables.
If analyzed in dollars, Colombia’s monthly salary (US $ 231) is among the lowest. Above other economies such as Mexico (US $ 215), Dominican Republic (US $ 211) and Brazil (US $ 2017) and also higher than Nicaragua (US $ 132) Cuba (US $ 87) and Venezuela (US $ 1). But the country is far from the highest data, as is the case of Panama (US $ 625), Costa Rica (US $ 512), Chile (US $ 441), Uruguay (US $ 423) and Ecuador (US $ 400).
(The date of beginning of negotiations for the minimum wage is postponed).
Juan Carlos Varela, director of Global Littler, however, specified that more than the amount in dollars, what should be looked at is the comparison of the salary with the basic basket, and thus it is also evident in which cases the minimum salary does not cover the cost of the life.
This is how, in the Colombian case, the minimum wage is not only enough to cover the basic food basket, Something that does not happen in all Latin American countries, but also these expenses, which are estimated according to Littler’s calculations at US $ 204, represent 88% of the minimum wage in the country.
“It is important to bear in mind that Colombia is one of the countries in the region that is also less expensive, but also that cost of living in the country this year and in the past does not imply a fair relationship to what has happened in time”, assured Varela.
According to the lawyer, an expert in labor issues, the country is increasingly tied to oil prices, and their reduction has affected the cost of various goods, and therefore the cost of living.
“Within the Latin American universe, Colombia is not enormously good, but it is not bad either”, Varela added, and assured that something positive is that, in terms of costs, an advantage that the country has is that it allows it to meet a high standard of product quality, but mentioned that this standard was impacted by the pandemic.
Hence the importance of the discussion of the minimum wage this year. “With the minimum wage, unfortunately at the moment it is approved and increases, it covers the gaps, but immediately inflation causes the gap to widen. If we do a microanalysis, the salary goes up in the ladder, but inflation and the costs of the basket go up ”, said the expert.
REGIONAL SITUATION
The figures that Littler analyzed show how of the 19 countries in the region in which the relationship between average income and costs of living was reviewed, only in 10 the minimum wage is enough to cover the basic expenses of a household.
A situation similar to that of Colombia is that of Peru, which like our country also has a minimum wage in dollars of US $ 231, and where the cost of a basic basket of goods is US $ 201; or Brazil, where the basic food basket is US $ 131, which implies that it is US $ 76 below the monthly minimum wage.
(How will the minimum wage for 2022 be negotiated?).
Among the countries where, on the contrary, the minimum wage is not enough to cover a basic basket are, for example, Ecuador, where it has an average value of US $ 712; Bolivia, with US $ 383 and a salary of US $ 309, or Argentina, where the monthly price of basic goods on average reaches US $ 308, but the base salary is only US $ 290.
“Argentina, like Colombia, is an example in which the gap widened considerably. The impact in this country was very strong due to the closures “Varela pointed out.
On the contrary, one of the countries with the best salary, Costa Rica, also has one of the cheapest basic baskets, of only US $ 78 on average, which leaves its citizens a difference of around US $ 434 for other expenses according to in Littler analysis.
VALUE OF ONE HOUR
Although the conditions of each country are different, and phenomena such as inflation and purchasing power parity influence these comparisons, another example is a study prepared by the Money portal, which reviewed the daily cost of living and average income in developed nations around the world to reveal where in the world it takes the longest to earn £ 1,000 and in which country it takes the fastest.
According to the study, in Colombia it takes 62 days to earn this amount, if it is taken as a reference that the daily income ranges from 16.23 pounds. In Mexico it takes 43 days and in Argentina 40.
BRIEFCASE
