At the end of this month, a consultation table will be established between the government, workers and employers to determine employment growth. 2024 minimum wage. According to what is said on the subject, the increase will be between 9 and 10 percent, which is the average cost of living figure for 2023.
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As a result of these negotiations, proposals are emerging to re-adjust the monthly wages received by approximately 3.4 million Colombians. One of these suggestions is to set the minimum wage at 2 million pesos in 2024, under certain conditions.
The initiative comes from Oliver Pardo, director of the Financial Observatory of Javeriana University, who announced the offer through his account on the social network X. He also works as an associate professor at the Faculty of Economic Sciences of the said institution. He proposes setting the minimum wage at 2 million, but eliminating bonuses and other benefits.
Pardo, Director of Economic Research of the Association of Banking and Financial Institutions of Colombia (Asobancaria), stated that “This year the minimum wage is 1,160,000 dollars per month, but when we add all the expenses borne by the employer, the cost of hiring also increases.” The monthly amount of a minimum wage worker is almost $1,800,000.
For the above reasons, Pardo recommends, among others, that retirement and health contributions be borne by the worker: Elimination of transportation allowance payment, leave payments and severance pay paid by the employee and optionally.
Teacher, employer’s pension contribution It should be the employee’s responsibility and should be automatically deducted from the payroll. Considering the current minimum wage of 1 million 160 thousand dollars, a monthly pension of 320 thousand dollars will be deducted from the employee.
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Pardo also argues that any health contribution borne by the employer should be the sole responsibility of the employee and will automatically be deducted from the payroll. In this way, the employee will need to contribute a total of $80,000 per month, or 4 percent of the minimum wage.
In addition, it is proposed to abolish the working bonus, which corresponds to a monthly salary paid in two installments at the middle and end of the year.and holiday pay equivalent to half the annual minimum wage.
Pardo also suggests eliminating the optional monthly transportation allowance (equivalent to $140,000 per month today) and severance pay (an annual minimum wage), which are the employee’s responsibility.
According to the Director of the Financial Observatory of Javeriana University, this initiative will not have an impact on the creation of formal employment. There will be greater transparency in the minimum wage by transferring most of the costs and contributions to the employee.
“Additionally, by eliminating some benefits and converting some contributions from mandatory to voluntary, the employee is given much more liquidity and freedom to manage their pay in whatever way seems most efficient,” Pardo explained.
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Another benefit of his proposal, according to Pardo, is that it would free the employer from cumbersome administrative procedures, thus making it a win-win for employer and employee.
Finance Minister Ricardo Bonilla said in a recent interview: Caracol NewsHere are some details about how Colombia’s economy fared last year, and the issue many are concerned about: the increase in the minimum wage for 2024.
In this area, the head of this portfolio stated: The minimum wage cannot exceed the determined base, i.e. CPI, consumer price index.
He also emphasized: “Understanding that the increase in the minimum wage from 2022 to 2023 is higher than the effective inflation that we will have in 2023, “This means purchasing power is recovering.”
The Minister emphasized that, given these conditions, this improvement in the purchasing power of Colombians will allow for more effective negotiations on the 2024 minimum wage.
(Read more: ‘The nation’s economy has been hit very hard’: Bruce Mac Master, president of Andi)
According to the Portafolio newspaper, everything indicates that the increase in the minimum wage will not be more than a single-digit figure, and figures such as Mauricio Santamaría, president of the Anif Center for Economic Research, This increase will not exceed 9 percent because a higher figure would not be compatible with inflation targets.
On the other hand, Fabio Arias, president of the Unitary Workers’ Center (CUT). He stated that he evaluated the union’s salary increase offer in his meeting with EL TIEMPO.
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