SK hynix (000660.KS) will begin this year's wage and collective bargaining negotiations later this month. At an in-house event Sunday, SK hynix CEO Kwak Noh-jung disclosed plans to launch the negotiations in June and stressed, "In the age of artificial intelligence (AI), a single moment's mistake can put us in difficulty," adding that "now is the time to prepare for the next stage of growth." The message urged labor-management cooperation to prepare for the future beyond the semiconductor boom, but the problem lies in the union's heightened expectations. Last year, the SK hynix union ignited the "N% performance pay" trend with an agreement on a performance bonus equal to "10% of operating profit," and it is now likely to demand compensation and benefits on par with Samsung Electronics, which recently concluded its own wage and collective bargaining agreement. The union's demands have not yet been disclosed, but observers expect it to present a bill comparable to the agreement recently reached in Samsung Electronics' wage talks — on top of the bonus equal to "10% of operating profit," a 6.2% wage increase, the creation of a special management performance bonus, and housing loans of up to 500 million won.
The reward competition, sparked by the "semiconductor duo" posting record-breaking results, has already spread to other industries. The HD Hyundai Heavy Industries union, which opened its first round of negotiations Monday, is demanding a performance bonus equal to 30% of operating profit, while the Hyundai Motor union is asking for 30% of net profit as a performance bonus. The Kakao union, which is demanding a distribution of 13% to 15% of operating profit, has even announced a partial strike for Tuesday. Without considering their differing industry conditions or management structures, the unions of major companies are competitively demanding "N% performance pay," fueling labor-management conflict. With the strengthening of union bargaining power following the enforcement of the Yellow Envelope Act (the revised Trade Union Act) added to the mix, there are also loud concerns about the worst summer labor offensive this year.
If unions chase short-term gains and focus solely on the reward race, the competitiveness of our companies in the global market will quickly fall behind, and Korea's appeal as an investment destination will inevitably plummet. President Lee Jae-myung also expressed alarm at the previous day's press conference marking his first year in office, saying of the excess-profit distribution debate sparked by "Samsung and hynix," "If only our country introduces something like this, companies could flee." Reasonable performance sharing is necessary, but the future of a company and a nation cannot be bright if a union's "money feast" takes priority over investment for future growth. We hope that the wage and collective bargaining negotiations at SK hynix and other major companies will become not an arena for a reward race that erodes growth, but a starting point for social consensus that prepares for future investment.
