Kim Young-hoon, Minister of Employment and Labor, expressed the general view that excess profits earned by large companies entering the artificial intelligence (AI) sector should be shared with their suppliers.
According to the Ministry of Employment and Labor on Wednesday, Kim said in a recent interview with Reuters that, regarding the excess profits of AI conglomerates, "We must establish new rules for distribution through social dialogue," emphasizing the need for mutual prosperity between large companies and small and medium-sized enterprises.
The debate over distributing excess profits from AI conglomerates erupted in earnest during the recent labor-management conflict at Samsung Electronics. The dispute arose over how to assess and distribute corporate management performance, amid the Samsung Electronics labor union's demand for substantial performance bonuses. Kim said, "It is undeniable that Samsung's remarkable performance is the result of dedicated efforts by both labor and management," but added, "there were more than 1,700 suppliers involved, and there were contributions from local communities including the supply of water and electricity."
Kim proposed "adjusting contract unit prices" as a concrete method for distributing profits with suppliers. The proposal calls for large companies to bring their contract unit prices with subcontractors in line with reality, thereby raising the profit margins of suppliers. However, adjusting contract unit prices is an area where the government can intervene only in a limited way, to the extent of preventing unfair contracts. Kim also did not mention any specific government-level enforcement methods.
Kim also expressed concern over the side effects that the performance bonus conflict between labor and management at large companies, sparked at Samsung Electronics, could have on society as a whole. If the concentration of young people seeking jobs at large companies intensifies, the labor shortage at small and medium-sized enterprises would become severe and social inequality would also grow, he said. "There should of course be rewards for short-term performance," Kim said, "but at the same time, companies need to invest in and motivate strategic talent with a mid- to long-term perspective."
