Unionized financial services workers to strike next month

The Korea Times

The Korea Times

Finance

Wed, November 29, 2023 | 05:28

Companies

Unionized financial services workers to strike next month

Posted : 2022-08-22 09:30

Updated : 2022-08-23 09:47

Unionized members of the Korean Financial Industry Union hold a street rally in Mapo District, Seoul, in 2016. Korea Times file

By Lee Kyung-min

The unionized members of the Korean Financial Industry Union, encompassing state-run and commercial lenders, have decided to go on strike, Sept. 16, according to the union, Sunday.

They say the collective action is inevitable unless their demands are met, including: a 6.1-percent salary increase, the reduction of their work hours to 36 hours a week and the scrapping of plans for bank branch closures.

The strike will be met by criticism, largely because the demands of white-collar office workers with an annual salary average of 100 million won ($74,850) or over could be seen as "selfish" in the eyes of borrowers with spiking interest rates.

Commercial lenders have thrived over the past few years on the back of ultra-low rates for mortgage and unsecured loans brought on by emergency expansionary monetary policies.

Financial Supervisory Service data submitted to Rep. Kim Jong-min of the main opposition Democratic Party of Korea, a member of the National Assembly National Policy Committee, showed that executives at the country's four commercial lenders netted a total of 108.3 billion from 2020 to May of this year. Employees at the banks received a bonus three times their base pay.

The four banks logged a total interest income of over 18.8 trillion won in the first half of the year. The year-on-year increase of 21.4 percent was underpinned in part by the rates for unsecured loans increasing up to 5 percent, up from as low as 2 percent in the same period. The rates for mortgages rose to 3 percent, up from as low as 1 percent.

An official of the union said the yes votes for the strike amounted to 93.4 percent of all members in a meeting on Aug. 19. The members are seeking a full strike, the first in six years since September 2016.

The union said that salary increases of over 5 percent have been given to workers at Korea's major conglomerates since last year. However, the average salary raise for those in the financial industry has been less than 2 percent for the last three years, falling far short of the inflation rate.

"We reject the management's offer of a 1.9-percent salary increase," a member of the union said. "The year-on-year increase in the salary rate has exceeded 3 percent only once over the past decade. We cannot back down from our asking figure of 6.1 percent."

lkm@koreatimes.co.kr