Labor minister announces forum for 'social dialogue' on distributing windfall corporate profits

Labor Minister Kim Young-hoon announced an emergency forum on Monday over how to distribute corporate windfall profits following labor disputes at Samsung Electronics, citing that “social dialogue is the only solution” to the growing debate.

“The success of Samsung Electronics today was built not only on the dedicated efforts of labor and management, but also on various forms of social support,” Kim said during a press luncheon with reporters at the government complex in Sejong. “We hope to open the door to discussions through this emergency forum.”

He added that the government would actively support research and field studies to help promote social conversations. 

“The direction is essentially ‘let’s live together,’” Kim said, describing the event as a discussion on the possibility of a Korean-style social solidarity wage policy.

The social solidarity wage policy aims to reduce wage disparities in the labor market by promoting equal pay for work of equal value. Its goal is to ease income inequality between regular and nonregular workers as well as between large corporations and small-and-medium-size enterprises.

Regarding the concept of excess profits, Kim said the government had neither the authority nor the intention to intervene in companies’ legitimate earnings. 

“The issue is how to distribute excess profits generated beyond traditional norms after subtracting taxes, selling and administrative expenses and financial costs,” he said.

“In particular, there is the question of whether regular employees alone should exclusively benefit from such excess profits,” Kim added. “At a time when astronomical excess profits are widening inequality, we need to find ways — such as shared growth models — to reduce gaps between primary contractors and subcontractors.”

Kim also welcomed the approval of a tentative wage agreement by Samsung Electronics union members, calling it a “wise decision.”

The company’s union announced Wednesday that Samsung Electronics workers voted to ratify a tentative labor agreement, with 73.7 percent of participating members voting in favor. 

The agreement includes a new performance bonus system that would pay employees in Samsung Electronics' profitable chip division up to 600 million won ($400,000) in company stock if the company hits 300 trillion won in operating profit this year. The special bonuses, equivalent to 10.5 percent of business performance earnings, will be paid out over at least 10 years, with 40 percent allocated to the chip division as a whole, including loss-making units, and 60 percent distributed to individual business units.

“While some level of disparity may be acceptable, union members must have had deep concerns over the widening gap within the same company,” Kim said. “Even so, it is fortunate that the tentative agreement was approved.”

The result appears to have eased labor tensions at Samsung Electronics, which had shaken the Korean economy. However, challenges still remain as opposition continues both inside and outside the company over the validity of the agreement and the union vote.

Kim said “considerable pain” may be involved regarding the internal conflicts among Samsung Electronics unions.

“There is no easy solution, but I hope they work through it the Samsung way,” Kim said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY JEONG HYE-JEONG [[email protected]]