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Samsung Electronics shareholders cynical about workers' strike

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Union members of Samsung Electronics visit the National Labor Relations Commission office in Sejong to apply for mediation between the union and the company, Feb. 4. Yonhap
Union members of Samsung Electronics visit the National Labor Relations Commission office in Sejong to apply for mediation between the union and the company, Feb. 4. Yonhap

By Baek Byung-yeul

Shareholders of Samsung Electronics are responding coldly to the company's union that revealed recently it may go on strike demanding higher wages, according to securities analysts Monday.

Online bulletin boards for Samsung's shareholders have been flooded with postings criticizing the union's demands.

They are accusing the employees of hindering the growth potential of Samsung, which is competing fiercely with tech behemoths in the global market now, by making excessive demands such as asking for 25 percent of the company's operating profit be put toward incentives.

In reaction to the union's demands, experts said that making unrealistic demands while hurting the company's growth potential is a move that considers individual workers' interests before co-prosperity with their employer.

On Feb. 4, Samsung's union applied for mediation with the National Labor Relations Commission after failing to reach an agreement with management over the wages for 2021. If the 10-day arbitration does not lead to an agreement, the union will consequently have the legal right to walk out.

The most controversial part of the union's demands to management is putting 25 percent of its operating profit into incentives for workers. Samsung Electronics logged posted an operating profit of 51.63 trillion won ($43 billion) in 2021.

If the 25 percent is distributed to around 110,000 employees, the bonus alone will be 117 million won per person. Given Samsung is a company that spends as much as it earns into facility investments, experts said the union is demanding too much. In 2021, Samsung spent 48 trillion won on facility investments.

"It is natural for a union to prioritize individual interests. However, it is the wrong way of thinking to claim an additional amount to gnaw on the company's growth. Samsung is a company that has to invest a lot of what it earns to take the lead in the competition with other big tech companies in sectors such as semiconductors," said Kim Dae-jong, a professor of the School of Business at Sejong University.

"The company can only survive by investing astronomical amounts of money into research and development. But making absurd claims based on immediate profits is a faulty argument not taking into account the company's future and co-prosperity."

Criticism is also raised over whether the union's demands are representative of all employees, as the number of union members announced by the union is 4,500, which is less than 5 percent of Samsung's employees.

"The efficiency wage theory is a way to pay a lot to employees and increase productivity, and Samsung Electronics has paid a lot more than other companies and achieved results accordingly. The union is interpreted as having made excessive demands in order to stand out," the professor said.

In regard to the issue, a Samsung spokesman said, "The company has nothing to say about the negotiations between union and management. The union's actions are up to the union. It is not appropriate for the company to argue about it."
Baek Byung-yeul baekby@koreatimes.co.kr


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