The debate over increasing Colombia’s minimum wage by 2026 has gained strength after the Central Unitary Council of Workers proposed a rise of up to 15%, a figure that has sparked concern among business leaders and unions. For example, the president of Grupo Aval, María Lorena Gutiérrez, warned during the 22nd National Infrastructure Congress that an increase of this magnitude could have negative consequences for formal employment and the sustainability of small and medium-sized enterprises.
“It seems to me that inflation is three times greater, it is a flurry,” the leader said, urging the negotiating table, which will be formally formed on December 1, to seek a responsible agreement that does not harm the country’s economic stability.
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Gutierrez pointed this out, in a direct and critical tone The country is going through a delicate situation and the next president will have to “clean house” in the face of the institutional decline and uncertainty that he sees the current government leaving behind. Thus, the head of Grupo Aval was decisive in rejecting the possibility of increasing the minimum wage beyond 10%. “With this fiscal deficit, a double-digit minimum wage is a big mistake. It’s a big mistake in job creation. If we raise a higher cost for SMEs, what you will do is lay people off,” he warned.
The directive also warned of the dangers of economic growth that relies solely on household consumption, without supporting productive investment. He added, “This growth is not sustainable,” recalling that informal employment affects about 13 million people, compared to ten million formal workers. He insisted that the country cannot rely more on sectors such as entertainment and services, which do not generate long-term investment or boost formal employment.
Thus, it must be taken into account that informal employment (more than 50%) and economic growth mainly driven by consumption pose additional challenges to the sustainability of formal employment and productivity. The president of Grupo Aval stressed this The growth recorded by the Colombian economy at 2.6% is neither sufficient nor sustainable if it is not accompanied by investment in strategic sectors. The lack of a solid investment base limits the progress of formal employment and leads to stagnant productivity, while the informal sector continues to affect millions of workers.
For this reason, Gutierrez’s warning points to the need to reconsider the economic growth strategy, because relying solely on consumption and high salary increases could endanger the stability of the labor market and the economy in the coming years.
The 2026 minimum wage will be discussed at the tripartite table composed of unions, businessmen and government representatives. Labor unions proposed a 10% increase, while Interior Minister Armando Benedetti mentioned the possibility of an 11% increase. However, the proposal that has generated the most controversy is that of a 15% increase, which far exceeds the annual inflation rate recorded until October 2025 (5.51%) and the traditional formula that also takes into account labor productivity.
As we remember, the negotiation process sought to preserve workers’ purchasing power, but the government and unions proposed higher increases than the usual formula. This position is being questioned by business unions, which warn of the dangers of transferring higher labor costs into the prices of goods and services, which could neutralize the benefits of higher salaries.
Employing a minimum wage worker in Colombia implies taking on a series of additional obligations that significantly increase the monthly cost for companies. currently, The minimum wage is $1,423,500, but the total cost per employee, including transportation assistance and mandatory payments such as Social Security, benefits, and para-financial payments, is about $2,240,349:
- If the minimum wage were increased by 10%, as labor unions have proposed, the cost per employee would rise to approximately $2,460,000.
- An 11% increase would bring the cost to approximately $2,480,000.
These increases represent a significant burden on small and medium-sized companies, which may have to reduce the number of their employees to maintain their ability to continue. The head of the Mipim National Observatory, Rosemery Quintero, warned the time He added, “It will represent a significant burden on companies, especially small, medium and micro enterprises, where even a slight increase in labor costs can determine the possibility of maintaining or reducing their employees.”
For its part, the Colombian Association of Small and Medium-sized Enterprises (Acopi) appreciates this With a 10% increase, the monthly salary will reach $1,565,850, and the transportation allowance will reach $220,000, bringing the monthly income to $1,786,850. Added to this are pension contributions, occupational risks, statutory premiums, severance pay, interest on severance pay, vacations, and the compensation and endowment fund, which increases the cost to the employer.
Coby warns that an increase of more than 7% could reduce real wages, affect investment and jeopardize employment stability. “In practice, a disproportionate increase would only increase inflation, negating the benefits that the increase seeks to achieve in the purchasing power of workers,” Quintero stressed.
The latest to express concern that the minimum wage increase is higher than inflation and productivity is the president of the National Federation of Employers (FINALCO), Jaime Cabal. He explained, “In practice, this becomes what is eaten in exchange for what is provided. The salary rises, but prices also rise, and the worker ends up without a real benefit.” He explained that “This phenomenon is known as indexation, a cycle in which wage increases generate more inflation, and inflation forces new increases, without meaningful progress in well-being.”