South Korean tech giant Samsung Electronics and its unions are on the verge of a historic conflict as wage talks remain deadlocked. If a solution is not reached, the company could face the first workers’ strike in its history.

The dispute arose over the salary increase proposed by the two parties

The crux of the dispute lies in the huge differences between the salary increases proposed by the two sides. While the union is demanding a significant raise, Samsung’s proposed plan falls far short of those expectations.

The National Association of Samsung Electronics reportedly rejected Samsung’s initial offer of a 2.5 percent wage increase at its first mediation meeting in February. Although Samsung revised its offer to a 2.8 percent increase, including additional benefits such as extended vacation and healthcare options, this remains well below the 8.1 percent increase the union wanted.

The stalemate unleashed the threat of a strike, a potentially decisive moment in the union’s 55-year history. Although the union secured the right to strike in 2022, it ultimately refused to take action. However, the current situation makes the risk of vote withdrawal much higher.

The potential strike has raised concerns about its impact on Samsung’s operations and the South Korean economy as a whole. The company is a major player in the global technology industry, and a prolonged outage could have significant consequences.

The second round of mediation on March 8 will be crucial in determining the outcome of this labor dispute. Both sides face pressure to find a compromise that would satisfy the union’s concerns while keeping the company afloat. The entire situation is being closely monitored as it could set a precedent for future labor relations in South Korea.