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South Korea’s Labour Minister, Kim Young-hoon, has urged the nation’s leading technology companies to consider sharing a portion of their extraordinary AI-related profits with employees, suppliers, and subcontractors. He warned that the rapid growth in earnings generated by the artificial intelligence boom could deepen economic inequality if the benefits remain concentrated among large corporations.
Speaking in an interview with Reuters, Kim suggested that companies exceeding their profit targets, such as Samsung Electronics, should explore ways to distribute part of their surplus earnings after taxes. According to him, workers, business partners, and local communities all contribute to corporate success and should benefit from exceptional financial gains.
Kim proposed that the government, businesses, labour unions, and suppliers engage in discussions to develop a framework for distributing what he described as “excess profits.” He believes such a dialogue could help reduce the widening gap between South Korea’s major conglomerates and the smaller firms that support them.
A former labour activist, Kim was recently appointed by President Lee Jae Myung. He played a key role in helping Samsung Electronics and its union reach a last-minute wage agreement, preventing a prolonged strike and securing significant bonuses for memory-chip employees.
His proposal reflects broader discussions among South Korean policymakers about how the country should manage the substantial economic benefits generated by the global AI boom, particularly in the semiconductor industry.
“We need new approaches to distribution through social dialogue,” Kim said. He emphasized that Samsung’s achievements were made possible not only by management and employees but also by a network of approximately 1,700 suppliers and the support of local communities that provide essential resources such as water and electricity.
Samsung Electronics and SK Hynix have enjoyed strong profit growth as demand for memory chips has surged due to the rapid expansion of AI technologies. Samsung has already introduced a plan to award special bonuses to employees if annual operating profits surpass 200 trillion won between 2026 and 2028.
Kim first publicly raised the idea of discussing excess corporate profits in late May and plans to organize a forum on the issue. In the Reuters interview, he outlined possible methods for sharing these gains, including revising supplier contract prices to provide greater financial support to smaller businesses.
The proposal has drawn criticism from the conservative opposition People Power Party, which argued that such measures represent excessive government involvement in the market and could undermine free-market principles.
The presidential office did not immediately comment on Kim’s latest remarks. However, it has previously stated that the issue deserves public discussion. Separately, another senior policymaker recently suggested that surplus tax revenues generated by AI-related profits could potentially be used to provide dividends to citizens.
Samsung Electronics and SK Hynix declined to comment on the minister’s suggestions.
Responding to criticism, Kim rejected accusations that his proposal resembles communism. He argued that directing a portion of excess profits toward suppliers and workforce development would strengthen the supply chain, improve competitiveness, and support long-term economic growth.
He noted that increasing payments to suppliers and investing in talent development at smaller firms could help address labour market imbalances. Many South Korean job seekers prefer employment at major conglomerates because of significantly higher wages and benefits. Kim warned that the AI-driven profit surge could further widen those disparities as large-company employees receive substantial performance bonuses.
“This trend is concerning,” he said.
Recent government data showed that the income gap between the wealthiest and poorest 20% of households widened during the first quarter by the largest margin seen in six years. Kim believes growing inequality could eventually weaken economic growth in South Korea.
The labour minister also explained why he became directly involved in Samsung’s wage negotiations. Such intervention is uncommon for a labour minister in South Korea, but Kim said both Samsung management and union representatives requested assistance after repeated negotiation failures threatened an 18-day strike that could have negatively affected the country’s economy and financial markets.
According to Kim, both sides lacked extensive experience in labour negotiations because Samsung historically operated under a no-union policy. Determining how to fairly distribute the company’s unprecedented profits among different stakeholders proved particularly challenging.
Kim said he informed President Lee that his experience within the labour movement would help him establish trust and facilitate communication between management and workers.
Industry analysts believe Samsung’s agreement with its union may encourage labour organizations at other companies to push for higher compensation as well.
While Kim stated that he does not intend to intervene in every labour dispute, he stressed the need for a broader framework that can help companies and unions resolve compensation issues more effectively in the future.
He also pointed to ongoing concerns within Samsung, including dissatisfaction over differences in compensation between employees in the memory-chip division and those working in non-memory businesses. Such disparities, he warned, could lead to talent losses in strategic areas such as foundry operations.
Kim concluded that while companies should reward strong short-term performance, they must also focus on retaining and motivating key talent through long-term investment and support.
