Colombia’s President Gustavo Petro issued a decree increasing the nation’s minimum wage by almost 23% after negotiations between business leaders, labor unions, and the national government failed on Monday.
The decree, which signifies the highest rate hike in decades, will increase the nation’s monthly minimum wage to 2,000,000 pesos per month, and includes a transportation allowance, while the base wage will be set at 1,746,882 pesos (approximately US$460) in regions where the transportation allowance is not applicable.
The increase will go into effect in 2026.
Petro defended the measure as a necessary step to ensure decent living conditions for millions of formal workers, adding that the minimum wage has continually failed to keep up with the real cost of living.
The administration asserts that the increase will spur domestic demand at a time when economic growth appears to be cooling.
Critics of the government’s decree, however—mainly industry leaders and business owners—argue that the move will likely cause adverse consequences to the nation’s economy and could spark inflation and unemployment.
Petro, the nation’s first Left-wing president and former rebel of the M-19 guerrilla movement, urged the importance of a strong and sustained minimum wage during a presidential address at the José María Córdoba military academy in Bogotá on Monday.
Petro argued that a minimum wage that does not provide access to food, housing, transportation, and other basic expenses should be ordained by the law of the state.
The measure falls in line with the historical trajectory of wage increases in Colombia during the last four years of the Petro government, a period in which the national minimum wage has increased by 74.7%, a stark departure from the customary wage patterns during past administrations.
