The 'Lee Jae-myung Put': Hopes for Market Support and Criticism

A term, 'Lee Jae-myung Put,' is circulating in the stock market. It's a reference to the 'Bernanke Put,' coined when then-U.S. Federal Reserve Chair Ben Bernanke defended stock prices during the 2008 financial crisis through interest rate cuts and liquidity provisions. The 'Lee Jae-myung Put' signifies some investors' expectation or blind faith that the government will not allow stock prices to fall. However, concerns are being raised that such expectations could lead investors to take excessive risks, creating market bubbles and endangering the national economy.

The Lee Jae-myung administration recently intervened in the performance bonus negotiations between Samsung Electronics' labor and management, leading to a tentative agreement. During this process, President Lee Jae-myung hinted at the possibility of invoking emergency intervention powers if a strike occurred. The President stated that while labor rights must be respected, corporate management rights also deserve recognition, and fundamental constitutional rights can be restricted for the public good. Prime Minister Kim Min-seok also mentioned potential economic damages reaching up to 100 trillion won.

While the semiconductor industry is clearly a critical national strategic sector, questions arise whether the conditions for invoking emergency intervention powers under the 'Trade Union and Labor Relations Adjustment Act'—specifically, 'when there is an imminent risk of significantly harming the national economy or endangering the daily lives of the public'—are actually met. The 100 trillion won damage figure mentioned by Prime Minister Kim also shows a significant discrepancy with the 20-30 trillion won figure, estimated at 1 trillion won per day, by academia and the market. Even if such damage were to occur, analyses suggest that the operating profit forecast for Samsung Electronics, one of the world's top-performing companies, would only decrease from around 350 trillion won to the low 300 trillion won range for the year.

Semiconductor expert Lee Bong-ryeol criticized, on social media, the government and vested interests' taboo-like attitude towards constitutionally guaranteed workers' collective action rights, drawing parallels to the situation in Korea. The emergency intervention powers may have served as leverage to pressure for a labor-management agreement. If invoking emergency intervention powers sets a precedent solely based on the importance of the semiconductor industry, it could lead to negative precedents in future strikes across other key industries. The emergency intervention power, invoked only four times in its 60-year history since its introduction in 1963, has been a matter that past administrations handled with caution.

The Lee Jae-myung administration and the Democratic Party sought to prevent excessive compensation claims from companies from undermining legitimate labor dispute actions by processing the 'Yellow Envelope Bill.' For a government that has made the realization of labor respect and the protection of basic labor rights a state agenda, invoking emergency intervention powers just one year after its launch is a decision that could be historically criticized. It is unlikely that the government and ruling party were unaware of these risks. Analyses suggest they calculated political gains and losses ahead of local elections. Tolerating strikes that burden stock prices and are unwelcome by shareholders might have been judged detrimental to the local election prospects.

The number of domestic stock investors surged from 5.61 million in 2017 to 14.42 million by the end of 2025, following the COVID-19 pandemic. The proportion of stock investors among the total electorate also significantly increased, from 13.2% in the 2017 presidential election to 32.5% in the 2025 presidential election. A situation where one in three citizens is a stock investor has a considerable impact on the political landscape.

Recently, Kim Yong-beom, Senior Secretary to the President for Policy, caused controversy by proposing a 'national dividend' plan, suggesting that excess profits from the AI era should be returned to the public. Bloomberg News reported that this post led to a stock market crash. The ruling party and some media outlets criticized it as a communist idea. In response, President Lee Jae-myung stepped in directly, clarifying that it was a discussion about considering a plan to distribute excess tax revenue generated from excess AI profits as a national dividend, and that some media outlets had spread malicious fake news. The Presidential Office distanced itself, stating the claim was a personal opinion unrelated to internal discussions.

Regardless of Senior Secretary Kim's true intentions, the causal link to the stock market crash, or the veracity of the Presidential Office's explanation, the President's immediate clarification leaves room for regret. At a time when social discussions around the distribution of excess profits from semiconductors are intensifying, sparked by Samsung Electronics' union's performance bonus demands, critics argue that Kim's remarks should have been calmly explained to guide constructive social discourse. The rush to deflect responsibility for the stock price decline may have instead hindered the spread of social discussion on the distribution of excess profits and surplus tax revenue. This is interpreted as a result of the government being overly conscious of stock prices and shareholder sentiment.

Samsung Electronics' labor and management reached a tentative agreement on May 20th at the Gyeonggi Regional Employment and Labor Office in Jangan-gu, Suwon-si, with the mediation of Minister of Employment and Labor Kim Young-joo.