[Column] The tyranny of merit and the distribution of profit in the AI era

Kim Hyung-ro, a Samsung Electronics vp performing as head of its negotiating committee; Hwang Gi-don of the Nationwide Labor Relations Fee; and Choi Seung-ho, the president of Samsung Electronics’ labor union, every depart from the Nationwide Labor Relations Fee after a second spherical of talks mediated by the federal government on Might 12, 2026. (Yonhap)

By Park Hyun, editorial author

Samsung Electronics and SK Hynix, two large companies, have despatched everything of South Korean society right into a frenzy.

It has change into fairly frequent to listen to by way of the grapevine that somebody or different has made a whole bunch of tens of millions of received from these two firms’ shares, and lots of others, gripped by the concern of lacking out, are questioning if it isn’t too late to leap on the bandwagon. 

Information that staff in these firms’ semiconductor divisions are receiving efficiency bonuses on a scale unimaginable to the common workplace employee is simply including to the shockwaves these conglomerates are sending all through society.
 
Naturally, onerous work ought to be rewarded. Rewards drive motivation towards higher efficiency. Nevertheless, the crux of the current controversy lies within the extent of these rewards and the way they had been distributed. This is a matter of how firms ought to distribute income that far exceed the norm, and whether or not such distribution can actually be justified from a societal perspective.
 
The truth that Samsung Electronics’ managers and union leaders agreed to a plan to allocate 15% of working revenue, roughly 300 trillion received this 12 months, as a efficiency bonus and to loosen up the per-person fee cap for bonuses additional amplifies the significance of addressing these points. The controversy has been intensified by compensation talks centered primarily on the businesses’ semiconductor models and everlasting employees.

The talk surrounding “truthful compensation” is way extra complicated than one may suppose. Profitable folks are inclined to consider that their achievements had been doable because of the onerous work they put in and their particular person capabilities. Nevertheless, such assessments can change drastically if a major quantity of luck can be concerned. 

In his guide “The Tyranny of Benefit,” Harvard College professor Michael Sandel factors out that profitable persons are inclined to treat their achievements as totally the product of their very own talents, which leads them to have little sense of owing a debt to society.
 
Nevertheless, components which can be past one’s management, equivalent to household background, academic alternatives, and the rule of “winners” over “losers,” play a significant position in a single’s success. Sandel argues that it’s unjust to distribute compensation primarily based on components past an individual’s management. 

Companies will not be exempt from this rule. Company efficiency can be closely influenced by exterior components equivalent to market situations, the coverage surroundings, and shifts in technological paradigms.
 
Samsung Electronics and SK Hynix are prime examples: each firms are reaping the direct advantages of the synthetic funding growth led by American tech giants.
 
The exorbitant income of Samsung and SK Hynix weren’t achieved totally by way of efforts of their very own; they’re the results of the cumulative contributions of varied stakeholders, together with the suppliers who supplied components and their employees, the nationwide and native governments that equipped electrical energy, water, and land, the residents who bore environmental burdens, and the traders who supplied capital.

As Peter Drucker emphasised in his influential basic, “The Follow of Administration,” an organization’s sustainability can solely be secured by placing a stability between revenue technology and social accountability. The distribution of extra income additionally must be re-examined from this angle.

We should additionally not overlook the truth that the unfold of AI is having a significant influence on employment. This isn’t restricted to US firms; South Korea can be experiencing important repercussions out there for brand new hires.
 
An evaluation by the Financial institution of Korea signifies that the lack of roughly 260,000 jobs for younger employees since late 2022, which is when ChatGPT was launched, will be attributed to the unfold of AI.

Provided that it’s simpler to automate duties which can be routine and repetitive, this employment development is structural. Corporations reaping large income from AI should not shirk their accountability for the employment shocks ensuing from this course of.

The federal government’s response remains to be in a really nascent stage. Its “AI Motion Plan 2026-2028,” introduced in February focuses solely on strengthening industrial competitiveness and fails to adequately deal with the problem of wealth redistribution ensuing from the disruptions to conventional employment. 

President Lee Jae Myung’s remarks in regards to the doable introduction of a robotic tax in March, alongside along with his name for firms to shoulder social duties, will be understood on this context. The sheer pace at which AI is spreading implies that these discussions to not be delayed any longer.

International locations abroad are already one step forward of South Korea in relation to this subject. The US goes past “robotic tax” because the idea of “compute tax” features traction. This tax would goal semiconductor, knowledge heart, and AI firms, taxing the computational sources required for coaching and working massive AI language fashions.

The purpose is to make use of the funds raised to mitigate the uncomfortable side effects of AI’s proliferation, equivalent to a pointy decline in jobs, the harms of monopolies, and a surge in power and useful resource consumption.

Implementing new insurance policies takes time. Then how ought to we fill the gaps between design and execution?
 
One sensible possibility is to proactively discover methods of giving again a portion of the surplus income reaped from the AI growth to society. It’s excessive time that Samsung and SK Hynix suppose past their very own firms and think about the form of social duties they bear. Increasingly more, the important thing query is turning into not solely how a lot to share, however with whom and in what method as effectively. 

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