President Petro raised the minimum wage by 23% by decree. With transportation assistance it remains at 2 million pesos by 2026. “Two million, two million, we have to put it that way through networks,” said the president in a speech in which he made the announcement alongside the Minister of Labor, Antonio Sanguino, and his daughter, Antonella Petro.
The round figure, and the largest increase since 1960, indicates the electoral commitment that the government is making to seek the re-election of the left in the presidency. The amount is above the 16% that the unions requested at the negotiation tables, and triples the number that employers had proposed, 7.21%.
“All the statistical information shows that the econometric correlation is the opposite, the more the minimum wage rises, the unemployment falls,” said Petro, with ideas that challenge the consensus of the majority of current economists. However, the non-orthodox economist Simón Gómez, director of the Life Thought Center of Heterodox Economy, affirms “the redistribution that this government has promoted needs to deepen aggressive productive development policies and that one without the other is unsustainable.”
Above all, the minimum rises more than 4 times the projected inflation, which can cause serious distortions in the economy, such as more inflation, and can lead the Bank of the Republic to raise interest rates, which will cause the economy to grow more slowly. Especially when public finances are experiencing moments of stress, due to the high level of debt that the government has taken on and the enormous fiscal deficit it accumulates.
Without much precedent in Colombia, the decision is reminiscent of similar moves in countries with populist governments that suffered hyperinflation, such as Chávez’s Venezuela and Kirchner’s Argentina.
The calculation does not obey the normal parameters. Usually, wage growth is calculated with workers’ productivity growth plus inflation as a starting point. In 2025, inflation is projected at 5% and productivity at 0.9%.
However, this was not the case for the 2026 salary. As the president explained in the presidential address where he reported this increase, the calculation obeys what he calls the “minimum living wage.” This calculation does not depend on the worker’s productivity, but on how much money he needs to live. It is a strange concept, considering that in Colombia the majority of workers are informal and earn less than the minimum.
But even the calculation of the “living minimum wage” has technical problems. It was based on a report published by the ILO to the negotiation table in November, to which La Silla had access. This calculation used larger household sizes than those in Colombia today, as it used figures from 2017 and not 2025. Between those years, household size fell from 4 to 2.8 people on average per household.
Furthermore, the calculation does not fit with the vital minimums calculated by Dane in the poverty thresholds. This lack of clarity in the calculations could open this decree to a lawsuit before the Council of State.
