A minimum wage that is too high promotes unemployment: Santos

President Juan Manuel Santos emphasised Friday that “a minimum wage that is too high promotes unemployment and encourages informality,” pouring cold water on any hopes Colombians may have had in a significant increase in the minimum wage, El Tiempo reported.

“The goal [of any new wage agreement] should be to maintain the minimum wage’s current purchasing power, keep pace with inflation and if possible increase it by a small percentage on top of this,” Santos said Friday.

Santos instead believes the best approach to determining a new minimum wage is for employers and workers to discuss the issue and reach a compromise; only if the two parties fail to reach such an agreement would the government fix the increase “by decree.”

Workers are pushing for an increase in the minimum wage of at least 7.85%, while businesses are arguing for an increase of no more than 3.5%.

While Friday is the deadline for the two sides to strike an agreement, president of the business council Rafael Mejia, said that if absolutely necessary it could be extended until Saturday, reported Portafolio.

The current minimum wage in Colombia is COP562.200 pesos ($312) per month.

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