The Samsung Electronics (005930.KS) labor union's strike, scheduled for the 21st of this month, is entering its final countdown. Ahead of additional mediation by the National Labor Relations Commission, the government is also preparing emergency measures including the invocation of emergency arbitration authority, with public attention focused on whether a settlement can be reached within the deadline. While a strike is a constitutional right of labor unions, under current conditions the potential losses far outweigh the benefits. Before going on strike, the union should consider at least five issues.
Under no-work, no-pay conditions, a strike is a function of endurance. The driving force that allows hardline unions in the United States and Germany to sustain prolonged strikes is a large-scale strike fund. During its 2023 strike, the United Auto Workers (UAW) drew on a strike fund of $850 million, paying members $500 per week in strike pay and lasting more than six weeks. The Samsung Electronics union has no strike fund. Union dues stand at around 10,000 won per month, and even if special dues were additionally collected during the negotiation period, there are no resources to pay wages to strike participants.
The decisive dilemma is that a strike erodes the very basis of members' Overall Performance Incentive (OPI). If production halts due to a strike, the damage to operating profit would range from 30 trillion won (union estimate) to 100 trillion won (industry estimate). Assuming a 15% performance bonus, every 30 trillion won in losses would wipe out 4.5 trillion won in performance bonus resources. The union would, in effect, be kicking over its own rice bowl.
A bigger problem is the loss of market share and competitiveness. The shutdown of a single memory semiconductor line means an expansion of competitors' market share. At a sensitive juncture in HBM4 mass production, the departure of strategic customers such as Nvidia and Google would mean not just a short-term revenue setback but a restructuring of the supply chain over the coming years. This would lead to a structural weakening of the foundation for wages and performance bonus resources.
The success of a strike depends on unity. The situation at the Samsung Electronics union is the opposite. Divisions among the unions that formed the bargaining team have deepened to the point that joint negotiations have effectively ended, and the 15,000-member National Samsung Electronics Union strongly protested the supra-enterprise union chairman's "exclusion from negotiations." Conflicts between business divisions are even more serious. The 15% operating profit bonus and the abolition of the cap effectively favor only the semiconductor division, which is why the Donghaeng Union, centered on mobile and home appliances (DX), withdrew from the joint bargaining team. Ahead of the strike, the leadership and integrative capacity of the chief negotiator have been undermined. This is likely to lead to a weakening of strike ranks and quiet de-unionization.
The legitimacy of a strike is not determined by law alone. Public opinion is leverage in negotiations, and it is highly negative. In a survey conducted by Realmeter on the 27th and 28th of last month, 69.3% of respondents said the strike was "inappropriate," while only 18.5% said it was "appropriate." A survey by Yeoronjosa Kkot also found that those calling the demands "excessive" (80.2%) outnumbered those calling them "appropriate" (14.2%) by 66 percentage points.
Above all, the image of regular employees at a mega-corporation earning average annual salaries of around 100 million won going on strike to demand performance bonuses of 600 million won per person collides head-on with the reality of Korea's labor market, where small and medium-sized enterprises and non-regular workers account for 90% of the workforce. The fact that a labor-friendly government is also negative on the strike adds to the burden.
For a strike to be protected by law, its purpose must be legitimate. There is debate over whether the core demands in negotiations — codifying "15% of operating profit" and abolishing the OPI cap — are mandatory subjects of collective bargaining. In a lawsuit filed by Samsung Electronics retirees, the Supreme Court ruled that "OPI does not constitute average wages." Since this denied the wage character of OPI, debate over whether industrial action surrounding it is lawful is unavoidable.
The company has filed an injunction with the Suwon District Court to ban the illegal industrial action, and the first and second hearings have been completed. If the injunction is granted before a ruling on the merits, the strike cannot proceed. Above all, if a strike that goes ahead is judged illegal, union officials and individual members will inevitably face liability for damages. In that case, the burden on strike participants could reach hundreds of millions of won per person.
Taken together, these five factors show that the costs to be paid in a strike are far too great compared to the utility. The right to industrial action is a powerful tool the union can use, but it is also the most dangerous card. "No one wins a strike." That is why labor and management must coolly recognize the situation and reach an agreement.
