Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Debate over national AI dividend premature: Nobel-winning economist
Peter Howitt, a co-laureate of the 2025 Nobel Memorial Prize in Economic Sciences, speaks during a press conference in Seoul, Friday. Yonhap
By Lee Hyo-jin
Canadian economist Peter Howitt says Samsung labor dispute highlights need for balanced profit-sharing
The proposed introduction of a “national dividend” system, aimed at redistributing excess tax revenue generated from windfall profits earned by companies during the artificial intelligence (AI) boom, is premature, Nobel Prize-winning economist Peter Howitt said Friday.
The proposal surfaced earlier this week after Kim Yong-beom, top presidential policy adviser, suggested using excess tax revenues generated from the country’s booming AI and semiconductor industries, led by companies such as Samsung Electronics and SK hynix, for citizens under the name of national dividend.
The proposal, rooted in the idea that the country’s AI infrastructure was built through decades of nationwide investment and support, immediately sparked controversy.
Howitt said Korea’s fiscally responsible growth policies have been supported in part by rising tax revenues from highly profitable large corporations, which help fund government programs benefiting the broader public. He added that while some are questioning whether this is sufficient and whether redistribution should go further, it is still “premature” to conclude that it should.
“AI is a very young technology. We don’t know exactly which way it’s going to go. We don’t know how well the semiconductor producers are going to fare in the future,” Howitt said during a press conference in Seoul. “I expect they will continue to do well, but whether they’ll do as well as they currently are, I don’t know.”
Howitt, an honorary professor at Brown University and recipient of the 2025 Nobel Prize in Economic Sciences, stressed the importance of policies aimed at broadly sharing the benefits of the AI boom. He pointed to closer cooperation between universities and industries as one possible solution, saying such partnerships could help academic institutions modernize their curricula and better prepare students for rapidly evolving AI technologies.
President Lee Jae Myung talks with Peter Howitt, left, a co-laureate of the 2025 Nobel Prize in Economic Sciences, at Cheong Wa Dae in Seoul, Friday. Joint Press Corps
Commenting on Samsung Electronics’ ongoing labor dispute over performance bonuses tied to the company’s soaring profits, Howitt said an ideal labor system would involve a symmetrical relationship between corporate profitability and employee compensation.
Samsung Electronics unions have threatened to proceed with a major strike next week as negotiations with management remain stalled. Markets are closely watching the situation, as potential disruptions at the world’s largest memory chipmaker could affect the global semiconductor supply chain.
“When profitability is higher, wages should be higher. When profitability is lower, wages should be lower. That way, everybody shares in the fortunes of the company,” Howitt said.
When asked about the top priority for structural reform in the Korean economy, Howitt said the government should provide stronger incentives and financial support for small and medium-sized enterprises and startups, which he described as the ultimate source of “creative destruction.”
Earlier in the day, President Lee Jae Myung met with Howitt at Cheong Wa Dae.
During the meeting, Lee said that the policy direction of his administration, which is centered on technology-driven growth and “growth for all” through broader distribution, aligns in many ways with Howitt’s academic work.
The Nobel laureate, for his part, praised Korea’s economic stability despite growing global uncertainty, saying the country has maintained a sound fiscal stance by effectively balancing inflation risks and growth targets.