Seoul: Workers in South Korea do not all face the same circumstances. Opinions are split over the recent labor unions' fights for performance bonuses at some big companies, depending on workers' company size, age, and job category. In particular, workers at smaller firms feel relatively deprived by the massive performance bonuses being demanded by unions at Samsung Electronics and SK hynix. The controversy surrounding performance bonuses at these companies resonates more sensitively with many workers because the size of the bonuses is far removed from their own wage levels.

According to Yonhap News Agency, data from the National Tax Service's 2024 earned-income tax filings showed that the average salary of South Korean workers came to approximately 45 million won ($29,800) annually, or 3.75 million won on a monthly basis. Yet the median annual salary-the midpoint in the income distribution-stood at only 34.17 million won, or 2.85 million won a month. The average exceeds the median by 10.83 million won, indicating that a small number of high-wage earners are driving up the average so that most workers earn much less than the statistical average.

In this situation, the performance bonuses sought by the union at Samsung Electronics are bound to deepen the sense of disconnect felt by many workers. Demands by unions at large corporations for performance bonuses that small and medium-sized company workers would struggle to earn even after decades of work are likely to be seen as greed on the part of high-income big-business unions, making them difficult for most people to sympathize with. Especially, if a model of tying performance bonuses to a fixed share of operating profits takes root at major industry players like Samsung Electronics, the compensation gap between large corporations and smaller companies unable to sustain such a system will inevitably expand.

The 2024 results on income from wage and salary jobs, released by the Ministry of Data and Statistics, showed that the average monthly pay for employees at large firms reached 6.13 million won, about twice that of employees at small and medium-sized companies, who earned 3.07 million won on average. Wages at large corporations rose 3.3 percent from a year earlier, while those at small and medium-sized companies increased only 3.0 percent. The gap may widen still further as big-company unions demand a fixed share of operating profits as performance bonuses.

Especially by age, the difference widened sharply: 1.21 million won among workers in their 20s, 2.44 million won among those in their 30s, 3.93 million won for workers in their 40s, and 4.56 million won for those in their 50s. The divide between regular and non-regular employees is also becoming larger. According to the Ministry of Employment and Labor, the hourly wages of non-regular workers fell for two consecutive years, reaching only 65.2 percent of regular employees' pay last year, the biggest shortfall in 11 years. This means that a non-regular worker earned only 652,000 won for every 1 million won earned by a regular employee. Last year, the hourly wage of regular workers rose 3.2 percent from a year earlier to 28,599 won, while that of non-regular workers increased only 1.3 percent to 18,635 won. Even allowing for the fact that many non-regular workers are older or work shorter hours, the imbalance is still severe.

At a time when pay and benefit gaps between large corporations and smaller firms are already widening, if disparities in performance bonuses also expand based on company size rather than individual achievement, the dual labor market will deteriorate to an irreversible level. Unless the severe inequality problem is tackled, both social unity and economic growth will be at risk. Solutions should be sought to keep social conflict from worsening further. The labor dispute at Samsung Electronics over record operating profits generated by the AI semiconductor super-boom is prompting a broader rethinking of Korea's overall labor market, beyond pay conflict.