Headquarters of Industrial Bank of Korea (IBK) in Seoul / Courtesy of IBK

Conflicts over year-end wage increases have intensified in the financial sector, with the labor union of the Industrial Bank of Korea (IBK) announcing a general strike and the union at the Bank of Korea (BOK) expressing its support.

According to the IBK labor union, the strike will take place on Friday, with 8,000 members expected to participate. This marks the first independently led strike in the union's history.

"It will be a strike that paralyzes all branches," Kim Hyung-sun, head of the IBK labor union, said. "If the bank and the government fail to meet the demands of public workers, we will shut down banking operations with second and third strikes."

The IBK labor union argues that the government sets wages 30 percent lower than those at commercial banks and fails to offer fair compensation. They emphasize that while IBK is classified as a public institution, its business model closely resembles that of commercial banks. The union also claims that overtime pay, totaling about 6 million won per employee, has not been provided.

Under current regulations, the government determines the total labor costs public institutions can allocate annually and mandates that expenses remain within this limit. For IBK to meet the union's demands, it would need approval from both the finance ministry and the Financial Services Commission. However, officials are taking a cautious stance, as accepting the demands could disrupt the overall wage structure for public institutions.

The labor union at the BOK, another public financial institution, has expressed its support for the IBK strike, viewing it as an opportunity to push for better working conditions for its own members.

"We will stand in solidarity with the general strike to correct the discriminatory wages at IBK and recover unpaid wages," the union said in a statement.

Meanwhile, the labor union of NH NongHyup Bank is also planning a large-scale rally on Friday. The union is demanding that bonuses be equivalent to 100 percent of base salary, while management has reportedly proposed a 50 percent payout.

It remains uncertain whether the rally will escalate into a strike. However, given its potential to trigger labor disputes at other private financial institutions, the situation is expected to have a significant impact on the financial industry.

The main obstacle lies in the current economic climate. While the public acknowledges the importance of fair wages and treatment, some have questioned whether strikes are appropriate at a time of economic uncertainty, as the country continues to recover from the effects of the failed attempt to impose martial law.