With the increase, the new minimum monthly salary in Colombia for 2018 will be 781,242 pesos, or around $265 USD at today’s exchange rate. The increase comes up short of last year’s 7.0% raise in the minimum wage, which put the 2017 figure at 737,717 pesos. The 2016 increase was also 7.0% while 2014 and 2015 both saw jumps of 4.8%.

The transportation subsidy for workers, which is also a legally mandated minimum and comes on top of the minimum wage, was also raised to 88,211 pesos ($30 USD). This is up by 6.1% from the previous level of 83,140 pesos.

Together, the increases put the overall minimum monthly income for a Colombian worker in 2018 at 869,453 pesos ($296 USD).

In his address, President Santos stressed the complexity and difficulty that the year-end salary negotiation typically presents. The negotiators missed a deadline earlier in the week to come up with a final figure as workers were seeking a 9.0% increase while business sector leaders were pushing for 5.1%, according to Colombian Minister of Labor Griselda Restrepo.

Santos said he hoped the 5.9% raise would help spur in increase in household consumption that can help counter the low-growth climate that the Colombian economy has been stagnating in for much of the past two years.

“The negotiations to set the minimum wage have always been complex,” said Santos, adding that the goal was “to maintain the income of workers but also to avoid a negative effect for the employment of almost 2.5 million workers and pensioners who earn the minimum.”

In addition to the minority of workers who earn the minimum wage, the figure is a key calculation in many other important figures used within the Colombian economy. Known as the “Salario Mínimo Mensual Legal Vigente” (SMMLV), multiples of this number are used for everything from salary payments to levying fines against companies to gauging adequate income levels when approving visa applications.

Among those involved in the negotiations were: Julio Roberto Gómez of General de Trabajadores; Miguel Morantes of Trabajadores de Colombia; Jhon Jairo Díaz, representing pensioners; and Luis Alejandro Pedraza, president of the Central Unitaria de Trabajadores (CUT).

Labor Minister Griselda Restrepo and Finance Minister Mauricio Cárdenas both also attended a key meeting earlier this week to help overcome an impasse that nearly caused the negotiations to fall apart, according to a report by Bogotá-based newspaper El Tiempo.

Photo: 50,000 Colombian peso notes. (Credit: Jared Wade)