As discussions intensify over excess profits stemming from innovations in artificial intelligence (AI), voices advocating for reinvestment are growing, particularly among business and academic circles. This reflects the need for 'ammunition' to endure the impending third round of a competitive market.
The Ministry of Trade, Industry and Energy held a forum titled 'Corporate Investment and the Future of Labor in the AI Era' on July 14 at the SK Securities Building in Yeouido, Seoul. This was the second government-led discussion on excess profits related to AI, following the Ministry of Employment and Labor's forum on 'New Paths for Social Innovation in Line with AI Technological Advancements' the previous day.
During the forum, participants argued that profits generated during the semiconductor boom should be utilized as future investment resources rather than being distributed as excess profits. Professor Ahn Dong-hyun from Seoul National University pointed out in his keynote address, 'If excess profits are determined based on a socially constructed definition that is difficult to measure and lacks clarity, there is a risk that distribution will shift from a market-based approach to one based on bargaining power.'
Professor Ahn emphasized the growing importance of the semiconductor industry from a national security perspective, noting that competition for capital investment and research and development (R&D) is accelerating. Given the high volatility and risk of investment failures, he argued that excess profits should be reinvested for future returns.
'The distribution issue of excess profits between workers and shareholders should be decided separately from the government's distribution of excess tax revenue,' he stated. 'While the government could implement mechanisms to recoup excess profits if cash subsidies were provided, this argument is irrelevant for domestic semiconductor companies that have not received such subsidies.'
He added that while discussions may be necessary for future restructuring in the semiconductor industry, applying post-facto distribution of excess profits for companies that did not receive subsidies would be unjust.
There were also suggestions that current labor laws are not suited for the AI era and need to be addressed. Professor Kim Dong-wook from Korea University Law School remarked, 'Our labor laws remain stuck in a 20th-century framework designed for mass production systems. It is time for changes that consider sustainable corporate growth and worker protection.'
This is particularly relevant as the technology cycles in the semiconductor and AI industries are extremely short. Changes in fine process transitions, HBM generation shifts, and AI accelerator architecture occur every one to two years, leading to rapid shifts in workforce skill requirements. However, rigid labor laws are failing to bridge the gap between companies and legal frameworks.
Professor Kim suggested that the requirements for the current flexible working hours system should be relaxed to expand options for designing work hours that align with industry realities. He also called for clearer interpretations of the conditions for business layoffs to encourage proactive and gradual adjustments, as well as the expansion of workforce flexibility through amendments to dispatch laws.
He further stated, 'We need to discuss whether the issue of performance bonuses should be approached merely as a negotiation matter or whether it concerns the distribution of social value created by companies. We should develop a flexible stability model that supports flexible workforce management while enhancing retraining and social safety nets.'
During the subsequent discussion, the urgency for reinvestment was reiterated. Lee Joon, head of the Strategic Industry Research Center at the Korea Institute for Industrial Economics and Trade, noted, 'The profits from memory semiconductors come at the cost of taking on the highest levels of risk in manufacturing. Samsung Electronics and SK Hynix survived past global competitive rounds thanks to cash buffers.'
He added, 'As the semiconductor competition with the United States approaches, we need to consolidate not only technology but also financial, investment, and production capabilities to achieve 'super-gap industrial competitiveness.' The key to policy is to incentivize the profits generated during boom periods to be redirected into strategic investments for sustained competitive advantage.'
However, labor representatives argued that semiconductor profits and additional tax revenues should be distributed to partner companies. Lee Gyeo-rae, a member of the Youth Special Committee of the Korean Confederation of Trade Unions, stated, 'The astronomical excess profits enjoyed by large semiconductor companies are not solely the result of their efforts. They are made possible by the dedication and labor of numerous subcontractors and non-regular workers within the supply chain.'
He insisted, 'Excess profits from semiconductor companies should be used to ensure a reasonable profit margin for partner companies and improve the treatment of partner and non-regular workers. We need to convert these funds into public and social jobs that allow young people to create social value, rather than just short-term employment.'
In his opening remarks at the forum, Minister of Industry Kim Jeong-kwan stated, 'In the midst of the AI revolution that is reshaping the global economy, we need to ask what companies should invest in, how labor should change, and how labor-management relations should evolve. Innovation in the way we work is more important than quantity when considering the future of labor.'
He added, 'In the AI era, labor culture should focus not on 'who will take more' but on 'how we can grow together more significantly.'
* This article has been translated by AI.
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