'3% vs 6%'…Samsung Electronics Faces Difficulty Deciding Wage Increase Rate

This Month's Payday Also Delayed as New Wage Takes Effect

[Image source=Yonhap News]

[Asia Economy Reporter Kim Ji-hee] Samsung Electronics is struggling to narrow the gap with its employees over this year's wage increase scale. While the company is considering a 3% wage increase compared to the previous year, employees are demanding around 6%, indicating that more time will be needed before the final wage increase rate is decided.

According to industry sources on the 22nd, the Samsung Electronics Employee Council, a labor-management autonomous organization, has not decided on the wage increase rate by this month's payday (the 21st), when the new wages are to be applied. Employees requested a 6% increase, but the company insisted on about half that amount, around 3%. Samsung Electronics usually concludes wage negotiations in early March and pays the increased amount from the March payday. However, this year, the payment of the increase has been delayed due to the unresolved differences.

The employees argue that the company should significantly raise wages, citing the approximately 36 trillion won profit made last year and the fact that executive salaries more than doubled. On the other hand, the company is unable to accept this, citing uncertainties caused by the COVID-19 situation.

Especially as LG Electronics recently confirmed a 9% wage increase for this year, intensifying the trend of salary hikes in the IT industry, voices calling for improved treatment at Samsung are growing stronger.

Additionally, the Samsung Electronics labor union, launched last year, has joined the wage increase demands. The National Samsung Electronics Labor Union, affiliated with the Federation of Korean Trade Unions and the largest among Samsung Electronics unions, plans to submit its 2021 wage negotiation demands to the company this month. As treatment issues have come to the forefront, union membership has also increased; the National Samsung Electronics Labor Union grew from about 1,500 members at the end of last year to around 2,500 members in just three months.

As Samsung Electronics’ wage negotiations are delayed, its affiliates such as Samsung Display, Samsung SDI, and Samsung Electro-Mechanics have also not set their wage increase rates for this year. Typically, Samsung Electronics, as the leading company, sets the wage increase rate for the year, which then serves as a basis for each affiliate to determine their rates considering their management environment. However, this year, wage negotiations are being delayed in a chain reaction.

In the case of Samsung Display, in addition to the labor-management council where the company and employee representatives negotiate as before, wage negotiations are also underway with the labor union established last year. The Samsung Display union, with about 2,000 members, is demanding a 6.8% wage increase compared to the previous year.

This content was produced with the assistance of AI translation services.