October 18, 2011

same same... just korea (pt. xi)

Giving less/Giving nothing
Taxes and tips in Korea 

Taxes have the ability to put many people to sleep, or create a furious debate. I'm fully aware that most of you aren't accountants, and I don't intend to put anyone to sleep. I also don't want to create a debate or infuriate anyone with the low taxes I pay here, so I'm gonna steer clear of that as well.

What I want to focus on is Value Added Tax (VAT).In Canada, and the rest of the world, it is the money that the government makes off of the sales of various products. In Korea that tax isn't added to most products at the till (as is the case in NA/Europe). In Korea the listed price for a product is the price you pay at the register. I am not sure if the tax is sometimes added into the price of a product, but there are places that add it after the fact, confusing? yes.

Anywho, this concept would have been greatly beneficial for me as a child. When I was in middle school I remember straining my mind over the 7% tax that was added to my King Size Snickers bar (1.09 before tax 1.17 after tax). I hated that my enjoyment of the savoury chocolate, peanut and caramel covered nougat was delayed because of math (I was a chubby and lazy so what!). I would have become much chubbier with the sense I saved if I grew up in Seoul. First, the chocolate bar wouldn't be a stupid price ($1.09 what kind of asinine price is that? I hated HiHo Gas and Grocery) and second, I wouldn't have to do math ( I can blame no one here but myself, I got antsy while holding chocolate).

Korea is a different story, in everyday life the VAT is mostly non-existent. I have mostly encountered the tax, when out dining in foreigner friendly areas of the city. Even then, the tax wasn't always charged. It is becoming more and more common due to new government regulation, in 2011 the Korean government started cracking down on interact purchases ensuring the VAT was added. Like many things in Korea there are some ways around the new law. I'm aware of numerous establishments that only charge the VAT on card purchases. Basically giving more support to the cash is king rule.

Living in a society where a tag is god is pretty awesome. Although it creates a situation where when extra charges are added you feel ripped off. I've been told that Koreans often feel this way, and question why they have to pay more than the ticketed price. I think that it's understandable for them to be sceptically. I rarely notice that a VAT has been added and am usually caught off guard when it is. People in this country don't want to pay more than the price on the shelf, it's a learned behaviour and one that's tough to try to implement. Again the only areas of the city I've encountered these charges are in foreigner friendly areas, places where people have dealt with added taxes regularly. This brings about an interesting question though. If the listed price of a product in Korea is the actual price (no added taxes) then were does the standard of tipping get introduced?

Tipping as a practice has been used since the invention of money. It was used in England (and elsewhere in Europe) and spread to its colonies during England's reign as the world superpower. During this time a class structure did exist, and it was seen as customary for people to tip their social inferiors. The concept was frowned upon in the states once they beat the British, and attempted to remove their former employers class based system. However, the working class would swallow their pride, and tipping has since evolved to what it is today, in both N/A and Europe.

The invention, designation and usefulness of tipping was something that has spread through NA/Europe, especially in the restaurant realm. It hasn't been something that caught on very well with other countries. One study by Cornell University proclaimed that minorities with no history of tipping in their culture will tip poorly (ex Mexico) or not at all (ex Asia). In the article Cornell also refers to a tip rate of 15-20% , which confirms I'm also a thrifty guy tipping at around 10%. But their belief that tipping is mostly a Caucasian phenom isn't too far off considering its origins. According to other market research most other ethnicities are also regarded to have poor tip etiquette, while most research ends there, or attempts to get people to divvy up more cash. I'm going to offer a possible Korean explanation.

I'm going to continue to use the food service industry as an example, as it is the area where most people regularly come into contact with tips. In Western culture people can make a living, and sometimes a great one off of the tips they make from a restaurant. I know many who have put themselves through university off the gratuities of others.

For Asia the concept is new, and it becomes a struggle of new ideas clashing with cultural beliefs. During the time that the tip culture was evolving in the rest of the world (hundreds of years ago) most of Asia was practicing isolationism, trading with few countries, and not allowing foreign ideals to ruin their established order. In the past century Korea has been held back from the world stage through its occupation by Japan, followed shortly by a devastating war. Korea has spent most of its time rebuilding itself with little time to focus on cultural revolution. This leads to a disparity, the view that we have toward wait staff in NA / Europe is a different one that is held in Korea.

The current situation in Korea is that you have a society with little value placed on service. Good service is not usually rewarded, therefore not usually provided. Dining in Korea is different because of the lack of service. Your server doesn't do rounds, or spark up idle chit chat. If you need something you hit the Chogi yeo button on the table and a server comes when you need them (I personally like this better, but whatever). The wait staff in Korea seem to be filling a roll more than they are providing a service. There isn't table side bill service, and in many cases (galbi) you are cooking the food yourself. When you give cash for your bill, every cent is returned, and there isn't a doe eyed stare expecting more. If you attempt to leave extra money you are often greeted with question rather than acceptance. "Why won't you take your change?"

The cultural lag is one that is pretty simple, the Korean populous does not like paying more than the stated amount. It's been that way for a long time, and the past 20 years has not seen the widespread introduction of anything different. Did the kings and queens tip their servers years ago? no, it was something that took time to become an established social norm. Korea has spent a lot of time and energy becoming a major global player, and some norms take longer to adopt. Why would there be tips when a role is being fulfilled, instead of a service provided?

This also applies to most other sectors where tips are usually provided. My father was greatly impressed that cabs will return every penny, and even concede some change if the meter barely runs over. He proclaimed to have never experienced that in any city he's ever visited. Again the cabs in Korea are perceived as filling a role, not providing a service. The cabs in the city have undergone some massive changes that somewhat reflect this ideal. Cabbies are now supposed to be paid hourly by their employer, and not on commission from their fares.

(Conclusion)This culture is not used to adding money to a ticketed price, coupled with a service industry that is more simply filling a role than anything else allows for this society to work efficiently without tips. I think once the new generation (the one obsessed with western culture) grows older, there will be adoption of more tipping in the culture. In the time I have been here I have started to see more and more tip jars appear in bars. Not that I've been throwing money inside of them, but they are around, and bound to catch on.

1 comment:

  1. And now this:
    That would make a Korean traveling in San Fran blow a gasket! Anyway, if you miss any goods from the west, you should know about - they have loads of customers in Korea. Code COT477 will save you $5.