With Colombia one of the world’s most unequal countries, the progressive government of President Gustavo Petro has implemented measures to reduce glaring discrepancies in living standards.
On 6 January, the minimum wage increased by 23 per cent to $1,750,905 Colombian pesos (£345). Additionally, transport subsidies for those on low incomes rose to $249.095 (£50), a 24.5 per cent rise. Combined, the new state measures come to exactly two million pesos, taking Colombia’s minimum income to over £400 per month. In 2025, the total was $1,623,500 (around £320) per month.
The increase was announced by government decree on 29 December, following negotiations between the government, business groups, trade unions and retirees that were unable to reach agreement. Business groups had proposed a lower increase of seven per cent, while trade unions called for double-digit figures of around 16 per cent. The final figure is higher than many analysts predicted, and significantly outstrips inflation which in 2025 was between five and six per cent.
‘The increase in the minimum wage allows for increased demand, which benefits businesses. This is a factor in economic growth. Companies sell more and have higher revenues. It’s not a cost; it’s an investment in the human being who creates wealth through their work,’ said President Petro when announcing the rise.
While the increase will benefit Colombian workers who are formally employed, it also highlights the unstable economic circumstances affecting more than half of Colombia’s workforce, with an estimated 11.4 million people relying on informal employment to make ends meet. The government has sought to rebalance the situation by regulating digital platform and care workers in its labour reform, passed in Congress last year after finally overcoming intense opposition from the right. However, a great many Colombians continue to work informally in sectors such as transport, construction, domestic help and hospitality.
For the current government, and its successor that will take office in August this year, reducing high levels of inequality should be a priority. The electoral frontrunner, progressive senator Iván Cepeda, who is topping polls at around 30 per cent, plans to continue implementing and expanding the social reforms if elected. However, if the political right retakes the presidency, it is likely to consolidate power among business owners, ensuring millions of people will remain locked into economic hardship.
The minimum wage increase highlights how Colombia’s first progressive government is making significant efforts to address the material needs of large sectors of the population.