On 15 December 2021, by Decree 1724 of 2021, the national government set the increase in the legal monthly minimum wage applicable for 2022 at 10.07%, or 91,474 COP$. Thus, the current legal monthly minimum wage as of January 1, 2022 is COP$1,000,000. The decision to raise Colombia`s minimum wage by 2022 has been the subject of weeks of meetings and disagreements between unions and the government. For 2021, the country`s inflation was 5.6%, so the 10.07% increase applied for this year 2022 is about double the devaluation of the currency. The importance of increasing the value of the minimum wage in Colombia goes hand in hand with the large number of people earning it in the country. In fact, it should be noted that, according to the Ministry of Labor in Colombia, 58.1% of people who have a job earn a minimum wage or less. This means that about 12 million people earn this amount, which is often not enough to cover family expenses. This percentage increases among the younger population, with more difficulty finding work, and when they do, wages are generally lower than those of other older people. The minimum wage increase for 2022 is 10.07% compared to 908,526 pesos of the minimum wage in 2021 (+91,474 pesos). It came into effect on January 1, 2022, at the same time as the 10.07% increase in the transport subsidy (+10,718 pesos) for people earning up to 2 months of minimum wage. In total, the increase concerns employees who receive a minimum wage with transportation subsidy + 102,192 pesos.
Given inflation estimated in 2021 at 1.48%, this decision increases workers` real wages. Another factor taken into account in defining the increase is productivity growth, which is expected to have declined by 0.06% this year. What was the minimum wage in Colombia for 2022? – Photo: iStock Colombia is one of the countries where minimum wage increases are common every year, so people are paying close attention to these changes. Increases are generally between 6 and 7% per year, although this percentage is not fixed as it depends on the economic health of the country at the time of the introduction of the new minimum wage. In this case, the variables focus on inflation and productivity indices. In 2021, the minimum wage in Colombia was $908,526, plus the transportation subsidy of $106,454, for a total of $1,014,980. about $290 (based on the MRT dollar). However, according to Decree 1724 of December 15, 2021, the legal minimum wage for 2022 in Colombia was $1,000,000 per month and came into effect on January 1.
This increase represents an increase of 10.07% from 2021, which equates to approximately $255. The percentage increase is much higher than in recent years, partly due to the poverty problem resulting from the Covid-19 pandemic, which has persisted due to the health and economic crisis. Regarding the transportation subsidy for 2022, the government has determined that in addition to the minimum wage, the transportation subsidy will be increased to 117,172 pesos. Therefore, for this year 2022, the salary plus assistance will be 1,117,172 pesos per month. Keep in mind that the transportation subsidy is used by those who earn between one or two SMMLVs. Based on the above figures, adding up these figures, a Colombian worker earning the minimum wage will receive a total of $1,037,172 per month for 2022 after mandatory cuts for health care and pensions. The national government is required to increase the value of the current statutory monthly minimum wage year after year so that workers` incomes are not affected by inflation. When paying social benefits for employees who receive a normal wage, employers must take into account the following data: The legal monthly minimum wage in Colombia for 2022 was $1,117,000 with the transportation subsidy. If no consensus is reached at that time, it is up to the negotiating table to decide before March 30. of the same month and reach an agreement. If it is absolutely not possible to agree on the level of the minimum wage, it will be up to the national government to publish the decree setting the Smmlv by 30 December at the latest.
How is the minimum wage determined in Colombia? If we look at the SMI ranking we have published, Colombia ranks 63rd, making it one of the countries with the lowest minimum wage of the 101 on the list. A natural person who places his workforce at the disposal of an employer pursues a social function, but pursues as a particular interest an economic remuneration for the provision of the service … For this reason, remuneration must guarantee a minimum subsistence level, (…) must also be mobile, so that it always maintains equivalence with the price of labour. This equivalence must be real and permanent, and to achieve this, the value of the wage must necessarily be updated and regularly adjusted to inflationary behaviour in order to counteract the loss of its purchasing power and to ensure that it retains its value in real terms. The national government, like unions across the country, is preparing for a discussion that takes place every ± years, and that is the minimum wage. That this period has three components that could define the amount that remains in force for 2023, and that is inflation, which was 11.44% in September: one of the highest in the last two days©in Colombia. There is also©the price of the dollar, which was above 4,600 dollars last week, and finally that this is the first negotiation of a left-wing government close to the unions. Meanwhile, for Corficolombiana, given the inflation outlook and the clear ± signal that the economy will have a slow pace in 2023, the minimum wage increase should not exceed 15%, several circumstances contributing to the rise in inflation, such as the gradual increase in gasoline that the government will start.
to try to close the gap in the Fuel Price Stabilization Fund. Currently, the legal minimum wage for this ± year (2022) is one million one hundred and seventeen thousand pesos with the transport subsidy, after the government of Iván Duque reached an agreement between employers and unions on an increase of 10.07 percent; The discussion promises an intense debate: on the one hand, on the part of the trade unions, who will argue that a historic increase is necessary due to the inflation of the Colombian economy, and on the other hand, businessmen, who will ask the government and workers to advocate for new taxes on companies ±result of the tax reform that will be debated for a second debate in the Congress of the Republic.