Samsung workers approved a pay deal, bringing an end to a labour dispute at the company's semiconductor operations in Pyeongtaek. The dispute also says something about the city where it unfolded.
Under Japanese rule, people in nearby Daechuri were forced off their land. Many were displaced again during the Korean War when a US military base was built, and again in the 2000s as it expanded. Over time, Pyeongtaek industrialised, and the conflicts shifted from villages to factory floors. One of the clearest examples came after the global financial crisis, when nearly 2,600 Ssangyong Motor workers occupied a factory for 77 days to protest mass layoffs. This clash later inspired scenes in Squid Game.
Today, once again, Pyeongtaek is in the headlines because of a labour dispute at Samsung's chipmaking factory. This time, however, the dispute is tied to the AI boom. Samsung has been a clear winner in the ongoing AI boom. The company has averted a strike with a new bonus structure. The deal hints at how labour negotiations may evolve in the AI era.
What's The Deal?
Under the 10-year framework, Samsung will set aside 10.5% of the semiconductor division's operating profits as a special employee bonus pool, on top of its existing performance incentives.
The arrangement applies mainly to workers in Samsung's chip business, including memory and foundry operations. It does not include other divisions like consumer electronics. That exclusion has upset many workers.
Much of the payout will come in Samsung shares rather than cash, effectively linking employee compensation to the long-term performance of the company's semiconductor business.
Emergence of Inclusive Capitalism
The deal has triggered a debate over who actually owns the wealth generated by the AI boom. Traditionally, shareholders receive most of the upside because they provide capital and bear financial risk, while workers receive fixed wages regardless of how profitable a company becomes.
Even South Korean President Lee Jae-myung criticised the union's demands, arguing that a fixed share of operating profit violates the basic principles of the market economy.
Critics, however, argue that technologies like AI are built on decades of publicly funded research, government subsidies, and specialised labour. If AI is generating extraordinary profits, they argue, employees must be compensated fairly.
According to Reuters, a typical Samsung memory-chip worker earns a base salary of roughly 80 million won ($53,400). Annual increments remained around 5-6%, while bonuses were capped at 50% of the base salary. That meant even if profits from the AI boom surged dramatically, workers' upside remained limited.
A March 2026 study published by the Centre for Economic Policy Research (CEPR) described AI as a "capital-biased innovation". It found that AI adoption reduced labour's share of income even as company profits rose.
Samsung has effectively shifted industry standards by giving workers a larger share of its profits and, by paying much of it in shares, has tied them directly to the company's long‑term performance.
AI's Uneven Rewards
Apart from this, AI has intensified concerns about inequality.
AI industries tend to concentrate profits within a small number of firms. Bloomberg estimates that 29 founders added a combined $71 billion to their wealth last year thanks to the AI boom. But at the same time, about 60% of the 130,000 tech layoffs announced last year were linked to AI adoption, according to TradingPlatforms.
That contrast — soaring gains for a few, job insecurity for many — is pushing workers to demand a share of the upside.
The Indian Angle
Workers with "choke-point" leverage, like Samsung's chip engineers, are using their power to demand a slice of the upside. But those without leverage are simply being left behind, even within the same company.
Similarly, countries like India are experiencing a different AI transition compared to Korea, Taiwan or the US. Here, we haven't seen an AI boom generating extraordinary corporate profits, which also means workers here have lower bargaining power. Instead, the country's $280 billion IT services industry, which created India's urban middle class, is now vulnerable to AI disruptions. Indian IT employees don't care about a share of AI profits; their bigger concern is job security.
India may therefore need far more serious conversations around retraining, social safety nets and managing AI-driven displacement.
Final Take
Governments will have to understand the economic realities of AI: stock market booms and soaring productivity will likely coexist with fewer jobs, sharper class divides, and mass layoffs. Policymakers must rethink the social contract to reflect a world where economic growth no longer translates into broad-based employment.
Advanced economies might still be able to experiment with forms of income support, while financing such programmes in poorer countries will be much harder.
This is just the beginning of tough conversations.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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