The first communist minister in the history of Colombia managed to get the government, business unions and labor unions to agree on an increase in the minimum wage. Those deals are relatively rare, having only been reached in 4 of the past 10 years. This year did not seem easy due to the environment of skyrocketing inflation, unemployment that does not subside, fears of recession raised by the president, unions affected by a tax reform, unions expecting the support of the Government that helped elect and a minister who plans to present a reform employment and another pension in 2023.
Despite all this, there was an agreement. According to four people who were in the negotiation, this was achieved thanks to positive factors on the three sides that participate in the definition of the minimum wage: the Government, employers and workers. “The agreement of the minister, the opening of the unions and the strategy of the unions were added to achieve the agreement,” explains Jorge Enrique Bedoya, president of the Colombian Farmers’ Society and head of one of the five employers’ unions that had seat at the table. Another union representative coincides with him, Bruce MacMaster from ANDI.
Gloria Ines Ramirez, the minister, achieved several things. One was to create a close, trustworthy relationship with union representatives. She already had it with the union spokespersons, whom she knows from her long career on the left and in unionism, since among others she was president of the Colombian Federation of Educators (Fecode) and member of the executive committee of the Central Unitaria de Trabajadores (CUT). , one of the three great workers’ centrals. The CUT is precisely represented at the table.
The minister’s leadership manifested itself in several things. One was to deepen a commitment to ensure that the minimum wage ceases to be the reference for adjustments of dozens of prices, from inter-municipal bus tickets to enrollment in public universities. Tying these values to the minimum wage is a measure created more than half a century ago to ensure that they do not go out of date year after year and that the State’s income stays in line with its expenditure on wages. But given that since this century the minimum wage must grow above inflation by mandate of the Constitutional Court, that link ends up driving inflation.
The minister, together with the technicians from her ministry and especially from the Treasury, compiled dozens of values that grow with the minimum wage, to complete the task of de-indexing them. This task, which the Government of Ivan Duque had already begun, will continue in the coming weeks with resolutions, decrees and even articles in the National Development Plan bill. And, although its implementation is still pending, the will shown by Ramirez to eliminate this inflationary effect gave the unions more room to agree on a salary increase that will be around 3% or 3.5% above inflation in 2022 (closed November at 12.22% and it is estimated that in December it will grow to 13% or a little more).
Another sign of the minister’s leadership was a change in language: instead of talking about negotiation, she was referring to the “conclusion” of the minimum wage. Although it sounds marginal, the underlying idea was to change the logic between a tug of war between two parties (employees and employers) to the joint construction of negotiations. This change fits with the idea that Petro’s government is a dialoguing government that seeks agreements and agreements with all kinds of social sectors, from motorcyclists to armed groups, including energy producing companies or the general population, sitting in binding regional dialogues.
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That linguistic turn of the minister was more than that. She opened the door to a different dynamic than usual in negotiations. Instead of lengthy discussions based on two figures, the unions’ request and the employers’ offer, what took place was something like a series of seminars. In a meeting, inflation was discussed in detail, with points such as which items rose the most or what inflation affects the poorest sectors, which are those who receive the minimum wage. Others referred to the relationship between the minimum wage and employment or productivity, which together with inflation is one of the elements that put the floor on wage increases.
This dynamic fitted in with an innovation in the approach of the unions, which did not submit an offer. Without the usual number to start a negotiation, which is usually criticized by the unions, the process had the look that the minister was giving it. Although at the meeting on Wednesday, when the thematic meetings had already been completed, the unions demanded that the unions respond with a number to their request to agree on a 20% increase, which they made public last Friday. Union leaders did not give any figures. Although that stressed the table, the minister acting as a mediator and agreeing separately with unions and unions. That same Wednesday it was closed with a very high possibility of agreement, according to those consulted.
Finally, this Thursday the final step was taken, with the figures that are already history and a victory for all parties. The unions managed to have 20% applied to transportation assistance, money that employers actually pay, but that is not the basis for adjustments to other rates, nor is it the basis for additional social security payments. The unions managed to change the logic of the negotiation and grant a high real increase but less than that of a year before. The Minister managed to build trust with the big business unions a few months after presenting the promised labor and pension reforms. And the country managed to have a new example that a leftist government can reach consensus with the business sector, which avoids creating tensions two weeks before the start of a year that promises to bring many due to the economic slowdown, the reforms that it has promised the Government and the regional elections in October.
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