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“The increase in salary should guarantee the purchasing power of the employee and offset the effect of inflation in 2020. So it should rise between 2% and 3%,” says Álvaro Yesid Ocampo, founder of the company Simeón from Cali.
“Due to the conjunctural crisis situation in which SMEs find themselves, the increase should be around 2%,” says Mario Salazar, manager of the company PromMedical.
The opinion of these two Valle del Cauca businessmen is what a large part of the country’s productive sector has when they are asked about what they think the salary increase should be for 2021. According to these proposals, more than 10.7 million Colombians earn The minimum, according to calculations by the Ministry of Labor, would receive an increase between $ 17,556 (2%) and $ 26,334 (3%) for next year, a figure with which thought centers such as Fedesarrollo and the National Association of Institutions agree Financial, Anif.
But for other population groups, including workers, the simple figure generates outrage, since only the basic household basket is worth $ 1.3 million a month.
Also read: Entrepreneurs are optimistic about resuming investment projects, says Andi
The dilemma
The discussion about increasing the minimum wage, which starts tomorrow, is always difficult, but this year the economic crisis adds greater complexities. For this reason, all agree that the salary agreement table faces a great dilemma or more than that, the National Government, which will surely have to settle the differences.
For Mauricio Santa María, president of Anif, a rise of more than $ 26,350 (3%) “would put the economic recovery at risk, in particular the creation of formal employment, highly hit by the pandemic.”
From that entity they consider that there should be prudence in the discussions that are coming. “A fair balance is needed between the decent remuneration of current workers and the difficult situation that a large part of the country’s business community is going through.”
Why would an increase of more than 3% affect companies? “When there is a large increase in the minimum wage, for the employer the cost of hiring can be higher than what the employee generates for the company. When that happens, they prefer not to hire, and unemployment can increase ”, commented Luis Carlos Reyes, member of the Fiscal Observatory of the Javeriana University.
He added that if the country wants to ensure that all Colombian workers have a minimum level of income, “we should move towards the debate on the guaranteed basic income, and it seems to me an excellent development that the unions have taken the initiative to include it in the negotiation of this year”.
To the debate, Carolina Camacho, Labor partner of the firm Posse Herrera Ruiz, added that the current uncertainty does not go away with 2020 but continues in 2021, because although many say that it will be a period of growth, it is not clear that it will be. for all. “I see it difficult to achieve a rise of two points above inflation, which is what has occurred in recent years. As Colombians what we hope is that the actors from their corners put aside their particular interests and reach agreements ”.
He recalled that it is likely that the economy will fall close to 9%, that the unemployment rate ends above 14% and inflation that may not reach 2%, that is, some particular conditions that must be analyzed by the negotiating table. , thinking more than creating new jobs, protecting the ones that exist, at this time.
“Obviously, the more money moves in the economy, consumption and employment are generated, but today many companies have difficulties meeting their payroll and having a high salary, would generate more contract terminations. A balance must be found ”.
Workers’ proposals
The workers’ centrals asked that the minimum wage for 2021 be taken to one million pesos (13.6% increase). Today this compensation is at $ 877,806 plus the potential increase of $ 26,334, it would remain at $ 904,140, it is almost $ 96,000 less compared to the expectations of the workers.
Diogenes Orjuela, president of the CUT, explained that the proposal of the workers’ centrals does not only imply a salary increase but a set of initiatives that promote the economic reactivation of the country.
He stressed that there are several elements: raising the minimum wage to one million pesos; a basic income from the State, for as long as necessary, to help the poorest households and for the Government to take over the payroll of MSMEs to restore jobs.
“With this we achieve that people have resources, money is injected for consumption and a virtuous circle is formed that we are defending so that household consumption increases, this accompanied by stimuli to agriculture and industry that allow an increase in production and hence the increase in employment ”.
The workers’ proposal is that the Government use about US $ 10 billion of international reserves for this, which represents about $ 40 billion.
Some businessmen such as Mario Salazar, representative of PromMedical, considers that if the increase in the minimum wage exceeds 3%, the Government must take other measures such as subsidizing SMEs with the additional increase, by the year 2021, in addition to solving issues such as flexibility in labor recruitment to boost formal employment.
Also, Mauricio Santa María, president of the Anif, stated that the situation of companies is complex and that additional stimuli are required, especially for sectors such as construction and services in recreation, travel, tourism and accommodation.
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