Recently, the Minister of Finance, José Antonio Ocampo, announced the Government’s measures to curb the high inflation figures registered in the country. One of them: deindex from the minimum wage all products that rise based on this adjustment.
(In context: Government will proceed to de-index increases in products based on the minimum).
It should be remembered that annual inflation in Colombia is 12.22% as of October 2022 and it is estimated that the increase in the minimum wage may be close to 12% or 13%.
This would imply issuing a series of decrees and bills to be able to implement the measure. But, What is the deindexation of certain products according to the minimum wage?
The deindexation consists of the fact that there are products with an increase, due to inflation, with atypical behaviors, in these cases those products that exceed an average of the CPI, which must be taken out of the calculation of inflation and the increase in the minimum wage, as explained by Jeisson Balaguera, CEO of Values AAA.
(Keep reading: Extra transfers and more government measures to curb inflation).
“This implies having a more down-to-earth and real growth by removing atypical products”, points out Balaguera. In other words, the Government would seek that the percentage increase in the minimum wage for 2023 does not represent, at the same time, an increase in the costs of basic basket products, services or rent that are calculated after the salary increase.
It is important to recognize that various products and services, such as insurance coverage, health services in traffic accidents, the rate of exploitation rights of innovative games on the Internet and the fee for exploitation rights and administration expenses in localized games, are some of the fees that are still indexed.
Also andThere are the Soat rates, the registration tax rate range, the penalty for defects in reserve requirements of credit establishments and sanctions for the use of sugar as an input in the manufacture of panela. These are some of the services that rise based on the minimum wage.
(Read: Agreement between the Government and universities: increase must not exceed 12.2%).
However, the products that would receive the impact of this deindexation, according to Balaguera, are several imported or that use inputs brought from outside the country. They are those that during the year have exceeded their value above the market average.
Another of the impacts of this decision, according to Balaguera, is that “the minimum wage would increase to more objective levels”.
For his part, Iván Jaramillo, director of the Labor Observatory of the Universidad del Rosario, told ‘Noticias RCN’ that it is a wise measure because it implies that the costs of the products and services that the Government wants to separate are lower because it would be calculated only with the inflationary percentage.
“One of the factors for improving the purchasing power of workers and citizens is that there are no additional factors of inflation”, assured Jaramillo.
BRIEFCASE
