The increase in Colombia’s minimum wage for 2026 has generated one of the most intense economic controversies at the start of the year. With an increase decreed by the government of more than 23% compared with the previous year, the measure was presented as a bold bet to improve workers’ incomes and consolidate a “living wage” more in line with the country’s economic reality. Both the wage hike and housing prices have sparked controversy.
However, the decision has opened a deep debate over its implications for the economy, the legality of its implementation, and the collateral effects in other social spheres, such as the housing market.
While labor sectors applaud the intention to raise purchasing power, a broad segment of business owners and private individuals questions the technical and legal process that led to setting this adjustment, triggering legal actions and criticism both in courtrooms and in forums of public opinion.
At the same time, the government has sought to curb consequences perceived as undesirable from the wage hike by proposing a decree to limit the impact of the increase on prices for social interest housing (VIS), that is, housing subsidized by the state.
This latter measure, however, has added a new front of controversy between state authorities and construction industry associations, extending the debate beyond wages to touch on issues of public policy, price regulation, and access to housing for lower-income families.
Colombia’s wage hike and housing price controls spark controversy
The National Federation of Merchants (Fenalco) filed a nullification lawsuit with the Council of State against Decree 1469 of 2025, through which the national government set the minimum wage for 2026 with a 23.7% increase, including the transportation subsidy (without the transportation subsidy, the increase was 22.7%). The association argues that the regulation lacks technical backing and violates the current legal framework by failing to adhere to the traditional criteria that must be considered when setting the minimum wage, such as inflation, productivity, and gross domestic product growth.
According to Fenalco, the introduction of the concept of a “living wage” — inspired by guidelines from the International Labour Organization — has no binding character within Colombia’s legal system and therefore cannot replace the parameters established by law. In addition, the association criticized what it says is the disregard for the authority of the National Administrative Department of Statistics (Dane) to certify variables such as the Consumer Price Index basket, which, in its view, weakens the legal certainty of the decision.
The lawsuit is not limited to challenging the decree in the abstract: Fenalco also requested the provisional suspension of its application while the substantive review proceeds. Fenalco President Jaime Alberto Cabal has insisted that the measure not only lacks verifiable technical rigor but could also trigger significant adverse economic effects, including the loss of formal jobs, the closure of micro-, small-, and medium-sized enterprises, and an increase in labor informality.
For Cabal, the decree constitutes an “exabrupt” that must be corrected immediately to avoid a negative impact on employment, business sustainability, and the economy as a whole.
The central argument is that by substantially raising labor costs in an economic context that remains fragile, many companies will be forced to reduce payrolls, raise prices, or even cease operations. The association has stated that the lawsuit is not directed against workers, but rather seeks to defend the rule of law and overall economic stability.
Colombia debe corregir el exabrupto del desorbitado incremento del mínimo.
FENALCO presentó ante el Consejo de Estado @consejodeestado una demanda de nulidad y una solicitud de suspensión inmediata contra el Decreto 1469 de 2025, toda vez que el aumento del 23,7% del salario… pic.twitter.com/0lkJCT2e7i
— Jaime Alberto Cabal (@JaimeA_Cabal) January 14, 2026
The attempt to regulate social interest housing
Amid expectations that the increase in the minimum wage would raise the cost of social interest housing, the government presented a draft decree seeking to limit how the prices of these properties are adjusted.
Traditionally, the maximum price caps for this type of housing have been expressed in minimum wages, meaning that an increase in the legal wage automatically raises the permitted value of these homes.
The government initiative proposes setting the price of social interest housing (VIS) in pesos from the outset and establishing a general cap of 135 minimum wages to prevent disproportionate increases driven by the wage adjustment.
However, the president of the Colombian Chamber of Construction (Camacol), Guillermo Herrera, said at a press conference that the measure “introduces an artificial price control that is highly harmful to the housing sector,” given that the dynamics of housing mean this market depends on long planning, financing, and construction cycles.
According to the leader of Colombia’s main construction trade association, requiring prices to be set in pesos from the earliest stages of the real estate business (such as at the time a property is reserved) “creates high legal and financial uncertainty” and puts the viability of new social interest housing projects at risk.
Camacol has warned about the risks associated with rigid price controls, such as shortages, distortions in supply, and possible increases in the markets for existing homes and rentals, as well as potential conflicts with constitutional principles that limit state discretion in price regulation.
A debate that shows no sign of abating in an election year
The dual controversy over the minimum wage and the regulation of prices for social-interest housing has placed deep tensions at the center of the public debate between social goals, economic equity, and business sustainability.
While the government insists on its responsibility to protect workers’ purchasing power and prevent adverse effects on access to housing, business and legal sectors continue to question both the legitimacy of the measures adopted and their practical consequences.
The coming weeks will be decisive, not only because of the resolution of the lawsuits before the Council of State, but also due to the close of public consultations on the housing decree bill and the evolution of the economic indicators surrounding these policies.
In this scenario, the balance between social justice and economic dynamism has become the core of a discussion that will likely shape the public agenda at the start of 2026.
And all of this is unfolding on the eve of the legislative elections — on March 8 — and the presidential elections — in May and June — which will be decisive in gauging the real support for the government and the opposition, following the first left-wing government and its controversial attempts at social reforms, fiercely opposed by conservative sectors and Colombian trade groups.