"Distribution of Excess Profits, Clear Reinvestment"...Labor Secretary Offers Contract Unit Price Adjustment

Minister of Employment and Labor Kim Young-hoon speaks at a press briefing for reporters held on the 27th of last month at the Ministry of Employment and Labor press room in Government Complex Sejong, discussing the achievements of the first year of the people-sovereignty government and current labor issues, including labor-management disputes at Samsung Electronics. [Yonhap] On the 5th, Minister of Employment and Labor Kim Young-hoon described the distribution of excess profits from large companies' artificial intelligence (AI) businesses as "clearly reinvestment, not communism," and cited "adjusting contract prices with partner firms" as one way to promote mutual growth. In an interview with Reuters released that day, Kim said, "It is time to establish new rules for distribution through social dialogue," and made the remarks. He said, "No one can deny that Samsung's remarkable achievements are the result of the dedicated efforts of labor and management," but added, "There are also more than 1,700 partner companies involved, along with contributions to the local community, including water and power supply." Kim dismissed criticism from the People Power Party that excess-profit distribution amounts to "communism," explaining, "What I mean by distribution is sharing profits with partner companies. This is clearly reinvestment." He also proposed adjusting contract prices with partner companies as one method of social distribution. Kim also warned about the side effects of a widening gap in performance bonuses. He noted that if large companies expand bonus payments based on excess profits, more young people may flock to big firms, which could worsen hiring shortages at small and medium-sized companies and deepen social inequality. On Samsung Electronics' future challenges, Kim said, "There should of course be rewards for short-term performance," but added, "Companies also need to invest in and motivate strategic talent over the medium to long term." Earlier, on the 27th of last month, Kim said, "The only solution to how excess profits from large companies can be distributed socially is social dialogue," and announced plans to hold a "Korean-style Social Solidarity Wage Forum" under the ministry's auspices.