Young Samsung workers flock to labor union in protest of 'disappointing' salary

Membership in the National Samsung Electronics Union rose to 20,000 to account for 15 percent of the company's workforce after weak operating profit prompted the company to cut raises and bonuses.

Members of the National Samsung Electronics Union stage a protest in front of a Samsung Electronics office building in southern Seoul on May 4, last year. [YONHAP]

[NEWS IN FOCUS]

A record number of workers at Samsung Electronics — especially those in their 20s and 30s from the chip division — are joining a labor union as many feel disgruntled over lower-than-expected salary and bonus rates.

The downbeat salary growth is closely entangled with a market slump in electronic devices and semiconductors, which contributed to Samsung’s lowest operating profit in 15 years last year.

Membership in the National Samsung Electronics Union, the largest of five unions at the tech giant, surpassed the 20,000 mark to claim 16 percent of the company's entire workforce as of Tuesday, the body said. The number doubled in just two months after the company salary offer was first announced last December.

Samsung’s notice about a 2.9 percent increase in base salary and no annual incentive for employees in the semiconductor division this year has triggered anger among workers, leading to the steep rise in newly registered organized labor members. The union, established in 2021, is demanding a 6.5 percent hike.

“Workers from the Device Solutions (DS) division recently enrolled en masse since they were shocked by the fact that they are left empty-handed without a bonus,” said a spokesperson from the union, referring to the business section that covers the production of memory and system-on-chips as well as contract manufacturing of chips.

The average salary at Samsung Electronics declined 11 percent to 120 million won ($91,000) last year due primarily to a weak performance across the board.

Management and the union will hold a third round of talks on finalizing wage negotiations, although the discrepancy between the rates proposed by the two parties remains large.

The annual bonus program, called the Overall Performance Incentive, rewards up to 50 percent of employee’s annual salary depending on the degree to which their division meets its targeted operating profit level.

For next year, Samsung set 29 trillion won in operating profit this year as a threshold for the 50 percent bonus, which came across as a long shot for many employees.

Last year’s operating profit came to 6.6 trillion won, the lowest since 2008 and below the market consensus of 7.5 trillion won.

“I joined the union after checking the latest announcement that there will be no incentives unless the DS division's profit exceeds a certain level,” said a researcher in his early 30s at Samsung’s semiconductor research center in Hwaseong, Gyeonggi who requested anonymity due to the sensitivity of the issue.

Like the researcher, relatively young employees in their 30s take up the largest portion of union membership as they tend to be more vocal about their requests to the company.

The shift puts Samsung Electronics, the country’s largest employer, on tenterhooks as it becomes burdened with coping with a changing labor culture.

Samsung used to have a softer labor union compared to other manufacturers like Hyundai Motor, but the introduction of pro-labor regulations and an influx of younger employees have bolstered the standing of the unionized workers.

Even though not all workers turn up as union members, “There has been some movement among employees to encourage the labor union,” according to the semiconductor researcher.

BY PARK EUN-JEE, SARAH CHEA [park.eunjee@joongang.co.kr]