The National Federation of Merchants (FENALCO) has raised concerns about the lack of conditions for effective wage negotiations in Colombia. The organization stated that recent government statements on minimum wage and what it described as excessive proposals from labor unions have undermined the process.
FENALCO emphasized that participation in wage negotiation is a constitutional right, not just a formality. The group also pointed out that the constitution guarantees autonomy for trade organizations.
According to FENALCO, increases in the minimum wage above inflation and productivity levels can negatively affect formal employment, especially among micro, small, and medium-sized enterprises (MSMEs), as well as citizens at large. The organization criticized the government for using “an attractive and populist discourse aimed at shopkeepers and small merchants,” while implementing policies such as the so-called healthy tax, which FENALCO claims have harmed these groups.
Jaime Alberto Cabal, president of FENALCO, formally responded to a letter from the Minister of Labor regarding the organization’s decision not to participate in this round of sessions of the Permanent Commission for Coordination of Labor and Wage Policies.
In his response, Cabal stated: “The participation of trade organizations in negotiation processes constitutes a constitutional right, whose exercise is conditioned on real and verifiable guarantees for effective dialogue. These do not depend on government discretion but are derived from the Political Constitution.”
He added: “The constitution guarantees autonomy for employers’ organizations and prohibits any undue interference by the state in their functioning or decisions. Law 278 of 1996 establishes a model based on real, balanced dialogue conducted in good faith. Employer and worker participation must be effective—not merely formal.”
Cabal further noted: “The minimum conditions for authentic social dialogue are compromised when senior government officials publicly announce double-digit increases to the minimum wage before formal negotiations begin—as is happening with discussions for 2026. Such early statements condition deliberations, undermine neutrality, and distort tripartite negotiation.”
He also stated that it is not up to the government to “qualify, question or delegitimize” employer association decisions or determine their positions. He said: “In a constitutional democracy there is full freedom to express technically supported concerns about decisions affecting productive sectors; public officials have a corresponding duty to respond with institutional respect, technical arguments and verifiable data—not disqualifications or value judgments.”
Cabal accused authorities of using rhetoric supportive toward small businesses while enacting policies he says have hurt them—such as tax reforms and labor reforms impacting MSMEs directly. “Coherent public policy requires concern for these sectors be integral and consistent—not limited to short-term or pre-election scenarios,” he said.
FENALCO reiterated its position that raising minimum wages beyond inflation and productivity pressures labor costs—particularly harming labor-intensive sectors like MSMEs—and ultimately erodes workers’ purchasing power due to inflationary effects.
The organization warned that announcing nominal increases without support from productivity gains or macroeconomic stability may seem politically attractive but are often quickly offset by inflation according to economic experience.
Finally, FENALCO reaffirmed its commitment “to defending formal commerce and small- and medium-sized entrepreneurs” as well as maintaining genuine negotiation frameworks respectful of organizational autonomy. Cabal concluded: “The Permanent Commission should be a space for real deliberation—not just validation of decisions previously announced by government.”
