Reactions to Colombia’s Historic 2026 Minimum Wage Increase

Written on 12/30/2025
Josep Freixes
The increase in the minimum wage in Colombia sparked reactions among supporters and detractors who are predicting an economic crisis. Credit: Andrea Puentes / Presidency of Colombia.

The announcement made yesterday by President Gustavo Petro regarding the increase in Colombia’s minimum wage for 2026 has unleashed a wave of reactions that reflect, beyond the figures themselves, a deep polarization in society and within the country’s political and economic sectors, on the eve of an electoral year.

Late last night, the head of state confirmed that the minimum wage will become a “vital wage” of 1,746,882 pesos (approximately US$460), which, with the transportation subsidy, will reach 2 million pesos per month (approximately US$526). This represents a 22.7% increase over the current level and more than double the raise granted this year.

The measure, adopted by decree after the failure of the traditional tripartite negotiations between business groups, workers, and the government, seeks, according to the president, to reduce inequality and “democratize wealth” so that workers can improve their quality of life.

The public debate generated by this decision reveals deep tensions over the direction of Colombia’s economic policy. Sectors aligned with the government have welcomed the increase as a historic step that responds to long-postponed social demands, while the opposition and business organizations have questioned its feasibility and timing, warning of possible negative effects on variables such as inflation, formal employment, and the competitiveness of small- and medium-sized enterprises.

The controversy is also taking place in a political context marked by the 2026 electoral calendar and tensions between the executive branch and Congress over other economic measures promoted by the government.

Reactions to Colombia’s historic 2026 minimum wage increase

From the ranks of the ruling Historic Pact party and allies of the government, the reaction to the increase has been one of celebration and affirmation that the measure follows a logic of social justice. Senators such as Maria Jose Pizarro described the increase as “historic” and rejected claims predicting job destruction, insisting that higher incomes will boost domestic consumption and improve the quality of life of millions of Colombians.

For these sectors, the decision responds to a constitutional mandate requiring the minimum wage to be “vital and mobile” and sufficient to support families in a context of rising prices.

Pizarro stressed, as Petro himself did, that with this increase, the minimum wage is transformed into a “vital wage” that should allow for a more dignified life for the family units that receive it.

“They will say, as they have for the past three years, that job destruction is coming to Colombia, and we repeat it loud and clear: a lie. Unemployment will continue to fall, people’s consumption will continue to rise, and their well-being will continue to increase, because if people are doing well, Colombia moves forward,” the senator said in a video posted on her account on the social media platform X.

For his part, Interior Minister Armando Benedetti defended the adjustment, noting that it represents a fair wage for the working class and that it fulfills commitments made, including before the International Labour Organization.

Former minister and presidential pre-candidate Luis Gilberto Murillo also praised the measure, considering it a step forward so that families can live with dignity, while the ruling coalition has insisted that this type of policy seeks to close structural gaps in a country with persistent levels of inequality.

For these supporters, even criticism about inflationary pressures stems from “neoliberal” diagnoses that have limited workers’ purchasing power for decades. The pro-government narrative underscores that an increase decided by decree, although unconventional, is necessary in light of the inability to reach a traditional consensus and in the face of the economic challenges Colombia is facing.

Ivan Cepeda: ‘Defeats poverty and creates decent living conditions’

Within this group of opinions favorable to the government’s decision, it is worth highlighting that of presidential pre-candidate Ivan Cepeda, who, in addition to representing continuity with the current Petro administration, currently leads voting intention polls.

This morning, Cepeda commented at length in a post published on his X social media account, in which he describes the government’s decision as an exercise that “deepens essential social gains.”

In this regard, the left-wing presidential hopeful maintains that the minimum wage increase “constitutes a clear option to defeat poverty, reduce inequality, and create conditions for a decent life. It reaffirms that the social program must be the fundamental criterion for economic decisions and a central aspect of political life. The prosperity of workers is also the prosperity of the nation. This measure boosts commerce and stimulates sustainable economic growth.”

Finally, Cepeda argues that although “in electoral times, the far right seeks to present itself as a supporter of social justice, the reality is that it has always applied the most miserly formulas of neoliberalism,” and emphasizes that “the well-being of workers contributes to the development of the economy as a whole and is not incompatible with business well-being.”

For this reason, he takes the opportunity to stress that “in my government I will practice dialogue with the business community, and I will also ensure the strengthening of small- and medium-sized enterprises.”

The opposition and business associations: economic risks and criticism of the method

At the other end of the political spectrum, the decision has been met with sharp and, in many cases, deeply negative criticism. Representatives of opposition parties such as Centro Democratico described the increase as an act of “irresponsibility” that could erode formal employment and negatively affect the middle class.

Former presidents and opposition political figures have argued that this measure appears more like an electoral calculation than a decision grounded in technical criteria, and that the consequences for small- and medium-sized enterprises could be severe, especially if combined with other factors such as high interest rates and inflationary pressures.

Business chambers also expressed their rejection forcefully. Organizations such as Fenalco described the increase as “irresponsible and populist,” arguing that the Colombian economy is not in a position to absorb a wage jump of this magnitude without adverse effects.

In a message published on social media, the leader of this association, Jaime Alberto Cabal, denounced that this “unilateral” action by the government confirms the “farce of the concertation table,” referring to the failed attempt — as happened last year — to reach an agreement among the parties, which proved impossible.

Cabal also announced that the “government’s improvisations are not paid for by the state; they are paid for by the people with unemployment, informality, and higher living costs,” asserting that all of this will prevent the central bank from being able to lower the interest rate in 2026 as a measure to contain inflation, “affecting investment, credit, and economic growth.”

“Imposing an increase of this magnitude is bread for today and hunger for tomorrow. Time has proven us right,” Cabal concluded in a harsh and discrediting message against the government’s decision.

For their part, the National Association of Business Owners of Colombia (Andi) and other business groups likewise agreed that the process lacked a genuine negotiation and that the consultation table was largely a formality with no real impact on the final decision.

Leaders from the productive sector warned that higher labor costs could translate into reduced formal hiring, greater informality, and increased pressure on consumer prices, generating an inflationary cycle that would end up affecting the very labor sector the measure seeks to benefit.

Analysts and economists: technical warnings amid a tense political climate

Beyond partisan positions, various economists and analysts have raised technical warnings about the possible macroeconomic effects of the increase. With inflation projections hovering around 3.6% for 2026 and an economy whose productivity has not grown in parallel with these increases, some experts warn that the measure could generate additional inflationary pressure and force the central bank to maintain or raise interest rates to counteract these effects, making credit more expensive for households and businesses.

It has also been noted that the automatic increase in wages and pensions tied to the minimum wage could have broader fiscal implications, affecting public spending in a context already strained by measures such as the declaration of an economic emergency in recent weeks.

Petro’s announcement of the minimum wage increase has highlighted not only a high-impact economic decision, but also the political, social, and technical tensions running through Colombia on the eve of a decisive election year, in which any decision by the government or the opposition is viewed as an “electoral calculation.”

The mixed reactions reflect a country divided between those who see the adjustment as a necessary step toward social justice and those who perceive it as a serious risk to economic stability and job creation. The coming months will confirm or dispel these concerns in a scenario in which economic decisions and political strategies are converging with increasing intensity.