Kim Young-hoon, former leader of the Korean Confederation of Trade Unions and current ITX train driver who is nominated as Minister of Employment and Labor, arrives at his confirmation hearing preparation office at the Seoul Regional Employment and Labor Office in Jung District, Seoul, South Korea, on June 24, 2025. (Photo by Chris Jung\/NurPhoto via Getty Images)<\/p>\n
Nurphoto | Nurphoto | Getty Images<\/p>\n
South\u00a0Korea’s\u00a0labor\u00a0minister\u00a0called on the country’s major\u00a0tech\u00a0firms\u00a0to\u00a0share\u00a0the spoils of their massive windfall\u00a0profits, warning that unprecedented chip-sector gains stemming from the\u00a0AI\u00a0boom risked widening a gap in inequality.<\/p>\n
In an interview, Kim Young-hoon told Reuters that companies like Samsung Electronics<\/a>\u00a0that outperform profit targets should consider sharing\u00a0excess\u00a0gains with\u00a0suppliers, subcontractors and their workers, after deducting taxes, given their contributions to corporate growth.<\/p>\n The\u00a0South\u00a0Korean government, businesses, unions and\u00a0suppliers\u00a0should engage in a public dialogue on how to\u00a0share\u00a0such “excess\u00a0profits” and narrow the gap between large conglomerates and smaller\u00a0suppliers, he said.<\/p>\n Kim, a former\u00a0labor\u00a0activist who was appointed by left-leaning\u00a0South\u00a0Korean President Lee Jae Myung, helped broker a\u00a0last-minute pay deal\u00a0between Samsung and its union that averted a major strike and\u00a0delivered hefty bonuses\u00a0to its memory-chip workers.<\/p>\n His distribution proposal, made in his first interview with foreign media since the Samsung deal, points to some of the unusual ideas that top\u00a0South\u00a0Korean policymakers are considering as they grapple with the massive windfall the country has received from the global artificial intelligence boom.<\/p>\n “We should set new rules for distribution through social dialogue,” said Kim. “It is undeniable that Samsung’s remarkable achievements are the result of the dedicated efforts of\u00a0labor\u00a0and management.”<\/p>\n “But there are also 1,700\u00a0suppliers, as well as contributions from local communities, including the supply of water and electricity.”<\/p>\n Profits\u00a0for Samsung and peer SK Hynix\u00a0have soared as the rising use of\u00a0AI\u00a0stoked demand for memory chips.<\/p>\n Samsung has agreed to give special bonuses to employees if it achieves more than 200 trillion won ($129.3 billion) in annual operating profit from 2026 to 2028.<\/p>\n Kim first raised the idea of a public dialogue on what to do with\u00a0excess\u00a0corporate\u00a0profits\u00a0in late May and has since said that he plans to host a forum on the matter. He\u00a0shared his ideas on what the\u00a0excess\u00a0profits\u00a0are and how they could be\u00a0shared – such as adjusting supplier prices – for the first time with Reuters.<\/p>\n But Kim has been criticized by\u00a0South\u00a0Korea’s conservative opposition People Power Party (PPP), which said he had raised “a dangerous idea of state intervention that undermines the foundation of the free-market economy.”<\/p>\n South\u00a0Korea’s presidential office did not respond to a request for comment on this story. It has previously said Kim’s comments raised important questions for the country and welcomed the idea of a debate. A high-ranking\u00a0South\u00a0Korean policymaker also last month suggested paying citizens\u00a0a “dividend” using excess tax revenue from\u00a0AI\u00a0profits.<\/p>\n Samsung and SK Hynix declined to comment.<\/p>\n Kim: reinvestment, not communism<\/p>\n Kim rejected the PPP’s claim that his proposal amounted to “communism,” saying it would represent reinvestment in the supply chain, improve competitiveness and help\u00a0South\u00a0Korea\u00a0overcome its low-growth challenges.<\/p>\n “What I mean by distribution is sharing\u00a0profits\u00a0with\u00a0suppliers,” he said. “This is clearly reinvestment.”<\/p>\n Kim said adjusting contract prices for\u00a0suppliers\u00a0could be one of the ideas to be discussed.<\/p>\n He said such\u00a0profits\u00a0could be invested in talent at small\u00a0suppliers.\u00a0South\u00a0Korean job seekers prefer large conglomerates like Samsung to smaller companies because of wage gaps, benefits and other factors. That divide is expected to widen as workers at big companies receive hefty performance bonuses driven by the\u00a0AI\u00a0boom, he said.<\/p>\n “This is worrisome,” he said.<\/p>\n South\u00a0Korea’s income gap between the bottom 20% and top 20% of households widened by the most in six years in the first quarter, government data showed.<\/p>\n Worsening inequality would curb growth in Asia’s fourth-largest economy, Kim said.<\/p>\n