"Samsung Holds Incentive Bonus Feast"... Civil Servants Also Demand 7.1% Pay Increase

Labor Unions Demand 16.3% Minimum Wage Increase to 12,000 Won
Farmers’ Groups: "Behind the Bonus Windfall Was Farmers’ Sacrifice"

The ripple effects of the wage incentive agreement between labor and management at Samsung Electronics are spreading in an unexpected direction. As calls for "We also want an N% incentive based on operating profit" are expanding across the entire industrial sector, labor unions, the public sector, and farmers' organizations are all voicing demands to "share more of the fruits of growth."

The labor sector has proposed an initial demand for next year's minimum wage to be set at 12,000 won per hour, a 16.3% increase from this year. The two major federations, the Korean Confederation of Trade Unions and the Federation of Korean Trade Unions, emphasized, "The minimum wage is a lifeline for low-wage workers and a measure of equality and justice in our society," adding, "We must end the unequal growth where the fruits of economic recovery are concentrated in the hands of a few." Their logic is that, as economic recovery driven by artificial intelligence (AI) and semiconductors is entering full swing, the benefits of growth should also be shared with low-wage workers. Ryu Kiseop, Secretary General of the Federation of Korean Trade Unions, stated, "In recent years, the minimum wage increase rate has failed to keep up with inflation, and the recent controversy over large corporate incentives, as well as soaring asset prices, all point to severe polarization in which the value of labor is severely undervalued compared to assets," adding, "The minimum hourly wage should not be lower than the price of a lunch."

The public sector has also joined in. Several civil servant unions, including the Confederation of Government Employees’ Unions, the Korean Government Employees’ Union Federation, and the National Public Officials Union, have decided to demand a 7.1% raise in civil servant salaries for next year. From 2017 to 2026, the average salary increase for civil servants has been 2.4% over the past 10 years. Compared to the average consumer price inflation rate (2.0%) and the private sector wage increase rate (typically 3.0–3.5%) during the same period, this is relatively low. They argue that "civil servant pay remains at just over 80% of the private sector level, and especially young civil servants are leaving public service in large numbers due to low wages at minimum wage levels and frequent complaints from the public," adding that the income gap in the civil service pension system must also be addressed. One frontline civil servant commented, "With the recent windfall tax revenue from the semiconductor boom, there is a debate between reinvestment and redistribution, but shouldn't some of those funds be used to improve civil servant working conditions?" The civil servant unions plan to hold a joint rally for civil servants and teachers in Gwanghwamun, Seoul, on July 11. The government raised civil servant salaries by 3.5% this year, the highest in the last nine years, and gave an additional 3.1% raise to entry-level civil servants in grades 7–9. The starting salary for grade 9 civil servants will be gradually improved to reach a monthly level of 3 million won by next year.

Farmers' organizations are demanding mechanisms for the social return of excess profits. The Korean Peasants League claimed last month regarding the labor-management agreement at Samsung Electronics, "This year, Samsung Electronics’ operating profit is expected to reach 300 trillion won, with as much as 31.5 trillion won allocated for incentives alone," adding, "Behind the feast of incentives of up to 600 million won per person was the sacrifice of farmers." They called on the government and National Assembly to: (1) fully re-legislate the Trade Benefit Sharing System, (2) introduce an excess profit tax, (3) block the monopoly of rural land and water resources, and (4) establish a fund to guarantee agricultural production costs. Most recently, the Korean Peasants League protested when discussions emerged about reforming the special rural tax, whose revenues have increased due to the stock market boom. They insisted, "The special rural tax is a special-purpose tax created by national consensus to strengthen agricultural and fisheries competitiveness and develop rural communities," and argued, "The recent increase in special rural tax revenues must be prioritized for the most urgent needs of farmers, such as stabilizing agricultural product prices and establishing an income safety net." According to the Ministry of Agriculture, Food and Rural Affairs, the cumulative collection of the special rural tax from January to April this year was 5.7314 trillion won. This is an increase of 3 trillion won year-on-year, and is expected to easily surpass last year's annual revenue of 9.2 trillion won.

This content was produced with the assistance of AI translation services.