Colombia’s President Gustavo Petro is set to announce the country’s 2025 minimum wage by December 30th, following unsuccessful negotiations between employers and labor groups. The decision carries notable weight as the nation seeks to establish a “vital minimum wage” – a standard aligned with the International Labour Organization (ILO) intended to ensure a dignified living for Colombian workers and their families[[1]]. This move comes as Colombia, the most populous Spanish-speaking nation in South America[[2]], continues to navigate economic recovery and address longstanding issues of income inequality.
Colombia is awaiting a final decision on its 2025 minimum wage as the year draws to a close, a move that could significantly impact the country’s working class. The issue has gained prominence following remarks from President Gustavo Petro outlining potential increases for workers.
Negotiations between employers and labor representatives failed to reach a consensus, leaving the final decision to the government. Petro has until December 30 to issue a decree setting the new minimum wage.
During a recent address, Petro indicated Colombia is moving toward adopting a “vital minimum wage,” aligning with standards set by the International Labour Organization (ILO). This type of wage, he explained, is designed to ensure a dignified standard of living for workers and their families, reflecting the real needs of Colombian households.
The ILO defines a vital minimum wage as one that secures an adequate standard of living, calculated using evidence-based methodologies, transparent processes, and consultations with labor market stakeholders. These calculations must also consider the economic, social, and regional realities of each country.
According to the ILO, such an income should cover essential expenses – including food, housing, healthcare, education, transportation, and clothing – as well as allow for unexpected costs and social participation.
The organization also emphasizes that defining this wage requires social dialogue, collective bargaining, and tripartite consultations involving the government, employers, and workers. “Vital wages should not be a one-size-fits-all approach and must reflect local or regional differences within countries,” the ILO stated in a recent document outlining its agreement on vital wages, adding that a sustainable strategy “must go beyond the scope of wage-fixing mechanisms alone and include a broader consideration of factors.”
Petro highlighted that the minimum wage fell by 1.4% between 2019 and 2022, during the administration of Iván Duque. However, he stated that his government has increased the minimum wage by 17.7% from 2023 to 2025.
“It has risen and will continue to rise. This is the change, and it means there is more wealth for the working people of Colombia,” Petro said. “That 17.7% is also nearly four times the increase between 2015 and 2018, when it rose by 4.7%.”
In 2022, the minimum wage was 1 million pesos, which increased to 1.16 million pesos in 2023 following a 16% increase. A subsequent 12.07% increase brought the wage to 1.3 million pesos in 2024. For 2025, the wage stands at 1.4 million pesos after a 9.54% increase.
Estimating the Vital Wage
Estimating the needs of workers and their families relies on income and expenditure surveys from national statistics agencies. In Colombia, the source for this data is the National Household Budget Survey (Encuesta Nacional de Presupuestos de los Hogares, ENPH) from 2016-2017.
The ENPH provides detailed information on household income and spending patterns, allowing for representative statistics on consumption across the country. The survey encompasses 87,201 households and 291,950 individuals.
Conducted every ten years, the most recent ENPH data is from the 2016-2017 period. To update the results, data on disaggregated inflation by consumption group was used to adjust estimates through 2024.
According to ILO methodology, families are identified as meeting basic nutritional requirements based on their expenditure levels and caloric intake. In Colombia, analysis shows that the second quintile comes closest to the recommended daily caloric intake of 2,950 calories per adult equivalent, consuming an average of 2,856 calories and spending approximately 1.23 million pesos monthly. This group serves as a reference point for estimating the cost of a basic food basket that guarantees adequate nutrition, without excesses or deficiencies, in calculating the vital minimum wage.
The calculation also considers the average family size, which is four members. The ILO’s estimation of the vital minimum wage also incorporates the costs associated with education and healthcare, essential components of a dignified standard of living. For an average Colombian family of four, these expenses have increased significantly in recent years: the combined monthly cost of education and healthcare was estimated at 106,994 pesos in 2017, rising to 154,606 pesos in 2024.
Another factor considered by the ILO is “other needs,” which also saw an increase in estimated costs: from 619,460 pesos monthly in 2017 to 827,549 pesos in 2024.
The ILO notes that basic needs and their costs vary significantly depending on household size, a key factor in estimating a vital minimum wage. In Colombia, calculations show that the monthly cost to cover a basic basket was 628,631 pesos for a single person in 2017, rising to 1.9 million pesos for a family of four. For 2024, the impact of rising prices is even more evident: the estimated cost is 966,599 pesos for a single household and 2.9 million pesos for a family of four.
