Colombia’s Minimum Wage For 2016 Set At $689,455 Pesos ($217 USD) Per Month. Congress To Get $8,426 USD Per Month
Yesterday, President Juan Manuel Santos, along with Finance Minister Mauricio Cardenas and Labor Minister Luis Eduardo Garzón, signed into law Decreto (Decree) 2552 of 2015, setting the Colombian monthly minimum wage at $689,455 pesos. This power was given to the executive branch by Law 278 of 1996.
Colombia’s minimum wage is important to all sectors of society, as many governmental salaries, public policies, and fines are calculated as a certain multiple of the minimum wage. This represents an increase of 7% over the 2015 rate of $644,350. Though this increase is slightly higher than the inflation rate from January to November of 2015 of 6.11%, as measured by Colombia’s Departamento Nacional de Estadisticas (DANE), due to currency depreciation, if converted into US dollars, it represents a decrease from $270 per month, as of January 2015 exchange rates to $217 per month at exchange rates as of December 31, 2015.
The decree mentions that while the target inflation rate for 2016 is 3%, due to external pressures on the Colombian Peso, they expect consumer prices may increase between 4.3-4.8% over the coming 12 months. During negotiations through December between representatives from the government, private sectors, and labor unions, gremios (industry associations) proposed an increase of 6.8%, while labor union coalitions asked for increases of between 10-12%.
Transportation Subsidy Increased
In parts of Colombia with public transportation networks (major cities), workers who make less than double the minimum wage, are also entitled to a monthly transportation stipend, paid by the employer. Transportation Minister Natalia Abello Vives joined her counterparts in signing Decreto 2553 de 2015, setting the transportation stipend for 2016 at $77,000 COP ($24.26 US Dollars as of 31 December, 2015).
Both laws take effect January first. A large portion of Colombia’s workforce is informal, thus many laborers in reality, will not fall under the protection of these laws. Still, all formalized businesses are required to comply, irrespective of size. A law passed in September increases the wages of Colombia’s national legislators to $26,749,000 pesos per month, roughly $8,426 USD. At year-end exchange rates, that works out to just over $101,100 per year in US Dollars. This representas a raise of $1,749,000 monthly. Several prominent members of Colombia’s Chamber of Deputies and Senate, from various political persuasions, have come out against the raise, including Alvaro Uribe, Ivan Cépeda, Claudia Lopez, and others.
Based on decreto 1086 del 26 de mayo de 2015 – President Juan Manuel Santos receives a salary equal to that of congress. According to an article in El Universal, the salary of the President is not out of line when compared to other world leaders, and lower than nearby countries such as Brasil, Uruguay, Chile, Guatemala, and México.
Photo of 2016 minimum wage negotiations courtesy of Mintrabajo, Ministry of Labor