The growth of the minimum wage in 2025 would be single digits, experts warn against moderation

During the International Congress on Insurance, José Ignacio López, president of the Center for Economic Studies (Anif), put on the table a crucial topic for the Colombian economy: the discussion of the minimum wage for 2025. In his speech, López presented a detailed analysis of the economic prospects that could affect the adjustment minimum wages, noting that next year’s increase could make a difference to previous years.

The economic expert emphasized that after three consecutive years of double-digit increases, the next minimum wage adjustment is expected to be more moderate. Year-end inflation projections of between 5% and 6% suggest that growth will remain in the single digits.

You can now follow us on our WhatsApp channel and in Facebook.

López clearly pointed out that although productivity has improved, these improvements are volatile and cannot be considered completely stable. “I believe the increase should be in the single digits because inflation is planned at these levels. Although there has been an improvement in productivity, these are fluctuating and cannot be considered completely stable,” said President Anif.

The economic context of recent years has seen a significant increase in the minimum wage in Colombia. An increase of 10.03% was recorded in 2022, followed by 16% in 2023 and another adjustment of 12% in the same year. These increases reflect efforts to improve workers’ pay conditions, but also present challenges in terms of economic and labor sustainability.

The discussion around the minimum wage is not limited to inflationary numbers. A fundamental aspect that López pointed out is the impact of these increases on the labor market. With the unemployment rate at 9.9% recorded in July, there are concerns about how the significant increase could affect job creation in the country. “We have seen a generous increase in real terms, but we are also beginning to see a deterioration in economic activity and the labor market. An excessive increase could be counterproductive,” warned López, stressing the need to proceed with caution in this new negotiation.

A tripartite table made up of trade unions, the government and entrepreneurs will be tasked with negotiating a salary adjustment based on two key indicators: Bank of the Republic inflation projections and productivity data provided by the Office for National Statistics (Dane). This approach seeks to ensure that minimum wage decisions are based on sound and objective economic data to balance worker needs and market realities.

However, López also stressed that raising the minimum wage by a significant amount could have unintended consequences, especially when it comes to inflation. An excessive increase could trigger further inflationary pressures that would affect the country’s economic stability. “It is essential to find a balance that does not jeopardize economic growth or the recovery of employment,” López said, calling for caution and responsibility in decision-making at the negotiating table.

Deciding on the minimum wage in Colombia will be determined by the current context, characterized by fluctuations in productivity and inflation, which have remained under control in recent months. Recent experience with wage increases has shown that while they can improve the purchasing power of workers, they can also have a significant impact on the economy as a whole, both on businesses and on employment levels.

The upcoming discussion will undoubtedly be one of the most important topics of the end of the year.because the minimum wage directly affects millions of Colombians and the country’s economy. The challenge will be to find a balance that allows for the improvement of workers’ conditions without having a negative impact on the economic structure.