Colombia’s National Association of Financial Institutions (ANIF) recommended increasing the national minimum wage for 2012 by 5%, from $286 to $300.
In a report published Tuesday titled Guidelines for the readjustment of the minimum wage for 2012, ANIF explained its “universal formula” for a percentage variation of the minimum wage; inflation plus or minus labor productivity.
For 2011 ANIF calculated labor productivity at 1.9% and inflation at 3.3% resulting in a 5.2% increase in the Legal Minimum Wage for 2012.
A 5% increase would result in maintaining the purchasing power of a large number of workers. ANIF said it is a challenge to preserve the real purchasing power of the majority of Colombian homes where 80% earn between one and two Legal Minimum Wages.
The association also stated that it is key to keep in mind that the signing of the FTA with the United States and Europe implies an increase of relative labor costs as a result of the abolition of labor cooperatives.
Members of labor cooperatives are seen as somewhat self-employed and do not enjoy the same benefits and guarantees as formally contracted employees.
ANIF said that the adjustment for 2011 followed the same formula; inflation at 3.2% plus labor productivity at 0% equaled 3.2%. However for political reasons, it was increased to 4% to $286.
The Permanent Commission of Coordination of Salary and Labor Policies of Colombia’s Ministry of Social Protection announced that discussions related to the adjustment of the Legal Minimum Wage which will enter into force in 2012, will begin at the start of December.