Petro Announces Colombia’s Biggest Minimum Wage Increase in Decades for 2026

President Gustavo Petro announced on Monday an increase in Colombia’s minimum wage by decree, after no agreement was reached at the bargaining table between the government, business leaders, and labor unions. The decision sets the increase for 2026 at 22.7%, one of the highest in recent decades, in a context marked by slowing inflation and debate over the measure’s impact on employment and productivity.

With the decreed adjustment, the minimum wage will stand at 2,000,000 pesos including the transportation allowance (approximately US$526), while the base wage will be set at 1,746,882 pesos (approximatelu US$460) in areas where the transportation allowance is not received. The announcement was made during a presidential address in which Petro defended the measure as a necessary step to ensure decent living conditions for millions of formal workers, following the failure of tripartite negotiations that, once again, were unable to reconcile positions.

Colombia’s Petro announces a 22.7% increase in the minimum wage for 2026: 2 million pesos

The wage bargaining table closed without consensus, repeating a scenario that has become recurrent in recent years. Differences between the expectations of unions, which were calling for a significant adjustment to restore purchasing power, and warnings from the business sector, which cautioned about labor costs, prevented an agreement. Faced with that deadlock, the Executive opted for the decree mechanism, a constitutional power the president has used on previous occasions.

The government insisted that the decision responds to technical and social criteria, and not to a political imposition. Petro emphasized that the minimum wage in Colombia has historically lagged behind the real cost of living, and that the lack of agreements in the bargaining process cannot become a permanent brake on improving workers’ incomes.

Beyond the nominal percentage, the Executive emphasized the real increase in wages. With inflation projected at 5.1% for December, the decreed increase implies an improvement in purchasing power of close to 18.7%. According to the president, this difference is key to assessing the impact of the measure, since it not only offsets rising prices but also expands the consumption capacity of households that depend on the minimum wage.

The government maintains that this real increase may have positive effects on domestic demand, at a time when economic growth is showing signs of moderation. The official argument is that higher incomes among lower-income strata tend to translate quickly into consumption, energizing sectors such as retail and services.

🔴 El salario vital para 2026 será de $2.000.000

Así lo anunció el Presidente @PetroGustavo, al explicar que este monto se compone de un salario vital de $1.750.905 y un subsidio de transporte de $249.095, con el objetivo de mejorar el ingreso real y la calidad de vida de las… pic.twitter.com/gEKpjG3XPR

— Presidencia Colombia 🇨🇴 (@infopresidencia) December 30, 2025

The concept of a ‘vital’ minimum wage

During his address, Petro again introduced the concept of a “vital” minimum wage, a designation he uses to differentiate his approach from the traditional legal minimum wage. As he explained, the calculation of the increase was based on a model that takes into account an average family grouping of 3.4 members, in which an average of 1.5 people are working.

This approach seeks to link the minimum wage not only to macroeconomic indicators, but to the concrete needs of households. The president stated that an income that does not allow for covering food, housing, transportation, and other basic expenses does not fulfill the social function the minimum wage should have in a social state governed by the rule of law.

With the decree announced today, the government highlighted that in nearly four years of Gustavo Petro’s term, the minimum wage has increased by 74.7% in nominal terms. For the Executive, this figure reflects a sustained policy of restoring labor income, in contrast to previous periods in which adjustments barely exceeded inflation.

However, the debate remains open. While unions are celebrating the announcement as a partial victory, business associations warn of possible adverse effects on formal employment and informality. The decree, which will take effect in 2026, once again places the minimum wage at the center of the country’s economic and social discussion, as one of the most sensitive pillars of Colombian public policy.