Automation surge raises concerns over Korea’s labor market

Tesla announced it will officially launch its robo-taxi service using the Full Self-Driving (FSD) feature in September. The company conducted a pilot program in June in Austin, Texas, targeting select influencers, and starting next month the service will be open to the general public.

The expected fares are strikingly low, at around $0.40 per mile, far below global ride-hailing platform Uber, which charges about $2 per mile. Fully autonomous driving technology, which threatens the jobs of commercial drivers worldwide, is now on the horizon.

Physical AI, which combines autonomous driving, artificial intelligence, and other cutting-edge technologies, is already replacing everyday jobs in South Korea. In restaurants, kiosks take orders, cooking robots prepare the food, and serving robots deliver it. Small business owners pay a monthly subscription fee of tens of thousands of won to employ the robots, instead of spending millions of won per worker on labor costs.

While the Lee Jae-myung administration and the ruling party have been promoting a pro-labor agenda, concerns are growing that the policies could, contrary to their intentions, displace workers. Critics cite the Moon Jae-in administration, which sharply raised the minimum wage under a “growth driven by income” strategy, only to see low-income jobs decline and income inequality worsen.

Critics say the Yellow Envelope Act, which amends Articles 2 and 3 of the Labor Union Act and was passed under the ruling party’s leadership, is likely to become a “pro-robot” policy rather than a pro-labor measure. As union-related risks rise, companies may accelerate automation and robot adoption, displacing workers.

The sharp increase in robotics stocks the day after the Yellow Envelope Act passed highlights this concern. The law’s effects are already being felt on the ground. Hyundai Motor’s labor union approved a strike vote just one day after the law’s passage. On the third day, subcontracted workers at Hyundai Steel filed a complaint with prosecutors against Hyundai Motor Group Chairman Hyun Jeong-eun, alleging violations of the Dispatch Act.

In this context, Hyundai Motor may be tempted to pursue an ideal “labor-robot” relationship. Robots do not require wage increases and can operate 24/7, including nights and weekends, without the risk of strikes.

Hyundai Motor Group plans to deploy the humanoid robot Atlas, developed by its U.S. subsidiary Boston Dynamics, at HMGMA (Meta Plant America) in Georgia as early as October. The adoption of robots is expected to reduce labor and production costs, allowing the company to establish a competitive local production system without facing tariff risks.

While eliminating major industrial accidents is essential, excessively strict penalties could push humans further out of the workplace. High-risk jobs are already increasingly being replaced by robots to protect workers’ safety.

At POSCO’s Gwangyang Steelworks, Boston Dynamics’ four-legged robot Spot has been deployed, while AI-powered welding robots are replacing technicians at domestic shipyards benefiting from U.S.-Korea shipbuilding cooperation.

The government’s growth strategy, aiming to make the country a global leader in “Physical AI” and enter the top three humanoid robot powers within five years, could accelerate job losses. If technology-driven growth merely replaces workers with AI agents or robots, jobless growth may become entrenched and economic inequality could worsen.

Would taxing a few innovative companies for AI and distributing the revenue to the many workers who have lost their jobs truly make everyone better off? In the era of the AI revolution, the government must give greater thought to preserving the value of human labor and creating a sustainable working environment.