One day after the first expiration date for the negotiation of the 2022 minimum wage increase, the Permanent Commission for the Agreement on Wage and Labor Policies, made up of the government at the head of the Ministry of Labor, the unions, and the unions, It reached an agreement on Tuesday to define the increase for the other year in the minimum and in the transport subsidy: 10.07%.
Thus, the salary for next year is located at one million pesos ($ 1,000,000) and the transportation subsidy at $ 117,172. With this agreement, since 2000, there have been eight occasions in which a consensus has been reached on increasing the minimum.
The president, Iván Duque, celebrated that an agreement had been reached between the parties, and pointed out that “History is being made in Colombia, the most important real increase in the minimum wage in almost 50 years has been achieved, and the most important nominal increase of this century, we are talking about an increase of 10.07% in the salary component and also of 10.07% in transportation assistance “, He said.
The president of the National Association of Colombian Entrepreneurs (Andi), Bruce Mac Master, said for his part that “This proposal was advanced and worked on during the last three months, reflecting the interest in setting the minimum wage so that it would reach a million pesos ”, and also that it makes clear that there is an adjustment in the country’s priority agenda as a result of the pandemic and its economic effects on the most vulnerable.
On behalf of the unions, Francisco Maltés, president of the Central Unitaria de Trabajadores (CUT), highlighted how “the agreement shows that, when there is political will from the different parties, it is possible to reach agreements.” Maltese stressed that not only the workers benefit, but also the pensioners, since the commitment was generated that pensions increase in this same proportion and that health contributions are also reduced from 8% to 4%.
While this is the highest increase in 21 years, attention has not only focused on those who earn the minimum, According to the National Administrative Department of Statistics (Dane) it would be 18.1% of those employed in Colombia, around 3.6 million people, but also in those who are below this salary.
Dane figures show that most workers today earn less than minimum wage. Well, by 2021, according to a report delivered by the entity within the framework of the minimum negotiations, 46.1% of the 20.16 million employed persons in Colombia receive less than a basic salary as monthly pay, around 9 , 3 million people.
Likewise, and if the impact of the pandemic is reviewed, it also deepened the number of workers below this range, given that in 2019 it was 41.8% of workers who earned less than the minimum, and by 2020 the proportion rose to 46.5% of the total employed in the country.
“For those who are below the minimum, surely their salary will also increase somewhat, but they tend to be people with little bargaining power. Raising the minimum wage does not do a favor to formalization, but it will not change the reality of many people, it seems a very large increase in nominal terms, but in real terms it is not “, indicated Stefano Farné, director of the Observatory of the Labor Market of the Externado University.
Additionally, Iván Jaramillo, researcher at the U. del Rosario Labor Observatory, explained that in itself, those workers or employed persons that earn less than the minimum are generally informal, and assured that although many theorists and economists point out that this increase “So high” will generate pressure and many workers will migrate towards informality, “This is not a direct relationship, and it will depend a lot on economic growth and how much the labor system can absorb it.”
According to Jaramillo, what should happen is that as growth improves, the improvement towards other salary ranges should be encouraged.
Mario Valencia, director of the organization Connection Analysis, also mentioned that “The problem in Colombia is that since we have an average salary so similar to the minimum, the effort should be in economic measures that promote the growth of the average salary.”
On the other side are workers who earn more than the minimum. According to Dane, 19.1% earn more than a minimum and up to two wages (3.9 million) and 10.4% of workers earn more than two minimum wages (2.09 million).
According to Farné, “The minimum wage is always a reference wage, as it increases, the others also end up increasing, but they do not necessarily increase in the same proportion. In general, those who earn between 1 and 13 SMMLV, those who do not have a full salary, receive less ”, He said.
Jaramillo also mentioned on this point that, in addition, those who earn a comprehensive minimum are a very small percentage of the workers in the country.