What is a labor union?

Park Su-ryon

The author is the deputy editor of Content Division Three and the head of corporate research at the JoongAng Ilbo.

Before K-pop became a globally admired Korean export, one of the country’s most respected achievements abroad was its national health insurance system. Regardless of their workplace, region of residence or level of income, nearly everyone in Korea can receive medical treatment. Koreans often take that for granted, but such universal coverage remains difficult to imagine in the United States and is uncommon even in parts of Europe with advanced welfare systems.

Members of the Samsung Group-wide labor union hold a press conference in front of the Samsung Electronics office in Seocho District, southern Seoul, on April 17. [YONHAP]

One of the key forces behind the creation of the National Health Insurance Service was, in fact, major corporate labor unions. Two years before the launch of the integrated insurance service in 2000, a landmark agreement among labor, management and the government laid the foundation for combining fragmented regional- and workplace-based medical insurance funds into a single national system.

At the time, Korea was struggling through the 1997 Asian financial crisis. Government finances had deteriorated, and many people had lost their jobs and economic security almost overnight. Labor groups accepted painful compromises, including layoffs and the legalization of dispatched workers. That willingness to share the burden helped Korea expand its social safety net through measures such as integrated health insurance and broader employment insurance coverage.

Had large corporate unions resisted transferring their accumulated insurance reserves into a unified national system, the current health insurance structure might never have emerged.

That history comes to mind again because of the increasingly bitter dispute between Samsung Electronics and its labor union over performance bonuses. The branch affiliated with the Samsung Group super-enterprise labor union has reportedly demanded cash bonuses amounting to roughly 15 percent of annual operating profits, or around 45 trillion won ($31 billion), a figure larger than the company’s annual research and development investment of 37 trillion won.

But nowhere in these demands does one see the sense of solidarity traditionally associated, however vaguely, with the idea of a labor union. Little consideration appears to have been given to the broader national economy, the company’s long-term future or even the contribution of subcontracted workers responsible for maintaining semiconductor facilities and handling hazardous chemicals.

Much of the extraordinary profitability currently enjoyed by Samsung’s semiconductor division and SK hynix stems from the oligopolistic structure of the high-value memory chip market, in which few producers can meet overwhelming demand. How should society view collective demands for enormous cash bonuses from workers employed in companies where layoffs remain rare even during downturns and where bonuses during boom years are sought regardless of individual contribution?

Such demands increasingly resemble rent-seeking behavior tied to the privilege of having secured employment at capital-intensive conglomerates with overwhelming market power.

In truth, major corporate unions shifted long ago from broader social movements into organizations focused primarily on economic gain for existing members. In a society in which many people feel compelled to survive individually, like contestants in the Netflix series “Squid Game” (2021-25), regular employees at large corporations have steadily reinforced the walls protecting their own status.

Even in the automobile, shipbuilding and steel industries, union agendas, once symbols of militant labor activism, now center largely on wages, bonuses and retirement age extensions. After the revised labor law known as the “Yellow Envelope” law took effect in March, Posco announced plans to directly hire 7,000 subcontracted workers. The company’s regular employee union opposed the equal treatment, arguing that “the value and pride of union members who worked hard to join as regular employees must be protected.”

As the walls protecting regular employees grow stronger, those outside the walls find their lives becoming more difficult. In 2000, wages at small- and mid-sized companies averaged 70.3 percent of pay at firms with more than 300 employees. By 2024, that figure had fallen to just 50.1 percent.

A part-time worker organizes plastic straws at a cafe in Seoul on Oct. 28, 2024. [NEWS1]

Korea’s labor market is no longer divided between regular and nonregular workers. It is increasingly fragmented into a three-tier structure of regular employees, temporary workers and platform laborers. At the same time, the number of young people categorized as “just resting” after giving up on economic activity continues to rise, and the rapid spread of AI threatens to contribute additional disruptions.

Against that backdrop, the Samsung Electronics union, threatening semiconductor fab strikes while focusing narrowly on large bonuses, appears less like a traditional labor movement and more like a product of labor policies centered almost exclusively on protecting regular employees. Founded only two years ago, the union declared from the beginning that it would focus solely on improving treatment for members without affiliating with larger umbrella labor organizations.

In a society in which maximizing benefits within secure conglomerate jobs is considered rational, there is little incentive for such unions to support broader goals, such as flexicurity, which combines labor flexibility with social protection, or the expansion of universal social safety nets. The question facing Korea’s labor movement now is whether it will continue to insist only on employment security while losing relevance to the overwhelming majority outside those protected walls.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.