Inflation: real increase in the minimum wage was the lowest in 7 years – Sectors – Economy

The increase in the minimum wage decreed for this year is the lowest in real terms in the last 7 years, according to the inflation figures that the Dane will reveal this Thursday.

The minimum wage -which had a nominal adjustment of 16 percent- actually only increased 1.1 percent for the poor population and 1.2 percent for the vulnerable population. In this way, it is the lowest increase since 2016, when the minimum adjustment meant a 0.26 percent drop in the purchasing power of that remuneration. For that year, a 7 percent adjustment was decreed, but annual inflation had closed at 7.26 percent.

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For this year, the basic remuneration for employees was adjusted from 1 million pesos to 1.6 million pesos as of JanuaryFaced with inflation that in 2022 was 14.92 percent for the poor and 14.8 percent for the vulnerable, which are the segments in which workers who receive the minimum wage are concentrated.

Households whose income is not enough to purchase a certain basket of basic goods and services are considered poor, while the vulnerable are those who exceed that level of poverty but have not yet managed to enter the middle class.

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According to official estimates, a vulnerable household is one whose income per person is between 407,000 and 730,000 pesos per person, at last year’s prices. Y in a poor one, the income is about 407,000 pesos or less per person.

Yes ok total inflation in 2022 ended at 13.12 percentthe highest since March 1999, due to the different consumption patterns of the segments of the population, the increases end up being different according to income levels.

According to Dane, for the poor, inflation in 2022 was 14.92 percent; for the vulnerable, 14.8 percent; for the middle class, 13.28 percent, and for high income, 11.52 percent.