Opinion | For Biden to save semiconductors, he can’t follow in South Korea’s footsteps
Yet these ubiquitous companies have done little to improve the lives of most South Koreans. Today, the chaebols employ only about a tenth of Korean workers and are drivers of social inequality. Decades ago, they began to move much of their industrial activities abroad, where they can pay workers less; at home, they continue to project a C-suite fantasy of white-collar wealth that few can achieve. Meanwhile, South Korea has among the highest poverty rates in the OECD; the rate for the country’s seniors tops the list. Koreans also work some of the longest hours in the world, but have little social mobility.
When Mr. Moon became President of South Korea in 2017, he pledged to undo the legacy of President Park Geun-hye, his corrupt and deposed predecessor, and that of his father, military autocrat Park Chung. -hee, whose master plan throughout the 1960s and 1970s involved gross human rights violations and the introduction of the chaebol business model. Mr. Moon sworn from the start to curb the domination of the chaebol, improve wages, increase social benefits and stimulate small and medium-sized enterprises. He was successful in raising the minimum wage, increasing child care credits and pensions for seniors, and establishing a government office to support innovation. However, he could not or did not want to cross the chaebols.
Conglomerates like Samsung, Hyundai, Hanjin, Lotte and LG once helped many workers enter the middle class and made South Korea a burgeoning “East Asian tiger”. But the chaebols have also embraced offshoring, outsourcing and rising prices while pushing for market closures. Their leaders amassed billions of dollars speculating in real estate and transferring wealth to loved ones: South Korea’s version of the 1997 Asian financial crisis was in part caused by chaebol embezzlement.
Why, then, does the political class still pay tribute to them? In 2018, just months after Samsung boss Lee Jae-yong was released from a suspended prison sentence, Mr. Moon took him to a diplomatic mission. trip in Pyongyang, in the hope of parading the benefits of capitalism before the North Koreans. Mr. Lee was returned to jail after pre-trial detention, but he has since hired a former legal secretary to Mr. Moon to represent him – most likely as part of a presidential pardon request. A growing number of South Korean politicians have urged the president to show mercy for the sake of the semiconductor industry. Indeed, throughout the economic downturn induced by Covid, Mr. Moon viewed the chaebols as a traveler from the desert would from an oasis. “We will protect our national interests by using the current semiconductor boom as an opportunity for a new leap forward,” he said in a word earlier this month.
For Americans, the chaebols may be reminiscent of Amazon and other tech conglomerates that dominate not only IT and retail, but also data storage, entertainment, media, and transportation – and shape workers’ rights. . (One key difference: Some of the chaebols were eventually forced to negotiate with South Korean unions, thanks to years of militant union action.) Earlier this month, Amazon reported that its profits for the first quarter of 2021 had more than tripled those in the same period last year. A dominant part of its operation was Amazon Marketplace, which allows small and medium-sized businesses to pay to sell their merchandise on Amazon and use Amazon’s logistics network – but makes them vulnerable to being removed from the platform or having Amazon . use their data to create competing products. (In an email, an Amazon spokesperson said, “We strictly prohibit our employees from using non-public, vendor-specific data to determine which private label products to launch.”)