Don’t waste tax money on a general strike
Published: 09 Jul. 2024, 19:56
The union kicked off the strike to “disrupt semiconductor production.” The company said the strike will not affect chip production for the moment. But if the strike continues, chip production will surely be disrupted, as unionized members, mostly working at chip factories, will stage their second strike from next Monday. As the chip category must be operated 24/7, even a short break can cause tremendous damage.
Members of the union also can stage a strike, but it is uncomfortable for the public to see it. After the phrase “Foundry clean line stopped!” appeared on the union’s YouTube channel, protestors cheered. Given the foundry sector’s strong need to respect customer confidence, the union’s strike is a self-destructive action.
Samsung Electronics is Korea’s iconic company. Its market cap at 522 trillion won ($377.3 billion) accounts for a whopping 22.3 percent of the total Korean equity market capitalization. The company has dominated the stock market over the past 25 years. It significantly affects the country’s economic growth rate, export and tax revenue, too. The large union is battling with the company over two proposed annual salary increase rates — 5.1 percent vs. 6.5 percent. Both sides must not waste time fighting over a pay hike when the boom cycle has returned to the chip industry. Last year, Samsung employees’ average annual salary was 135 million won. If they receive such generous pay, they must take responsibility as workers at the No.1 company in the country.
Samsung Electronics received many types of tax benefits from the government to help the company stay competitive in the global chip war. It received a tax deduction of 6.7 trillion won last year — the largest sum for any single company in Korea — thanks to the government’s plans to expand tax deductions for national strategic technologies, as specified in the K-Chips Act, and impose no tax on dividends from its subsidiaries overseas. The government also promised to provide 17 trillion won for the chip behemoth, including the cost needed to build infrastructure for the company, this year alone.
Both the governing and opposition parties are competitively presenting policies to provide fiscal support for competitive industries by lifting tax deduction rates and increasing subsidies. But such money comes from taxes. We hope the management and labor peacefully address their conflict before it is too late.
with the Korea JoongAng Daily
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