Myeong-dong Street Vendors

For anyone familiar with Seoul, Myeong-dong is synonymous with upscale shopping, packed streets, bright lights, and great food. The culmination of decades of hard-fought economic development has given rise to the bustling district, which contributes enormously to the profitability of the city at large by attracting tourists from all over the world. Part of what makes it so attractive is that foreigners can cheaply purchase food from any of the endless street vendors lining the streets which serve traditional foods like bungeoppang and jjajangmyeon as well as Kimchi pizza and various (albeit, delicious) interpretations of “meat on a stick.”

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The cost of the food – anywhere from 1,000 to 5,000 won (roughly $0.80 to $4.50 depending on exchange rates)– is just as important to many visitors as the presence of the street vendors themselves. It contributes to an atmosphere that is the quintessential Korean experience. People from all income ranges can be found enjoying a cheap bite – regardless of whether or not they came to purchase a Fehndi fur or a cheap pair of socks instead.

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The massive inflow of vendors has not been without a hitch, however. In a saber-rattling move, many of the local restaurant owners have called for the Seoul Metropolitan government to intervene in order to shield them from competition. The running total of complaints may not total 95, but their major theses include violations of paying tax and ultimately curbing their restaurants profitability. Over four-hundred area restaurant owners have petitioned to the local government, claiming that thriving street vendors who have continued opening up shop in front of their storefronts have cut into their profitability.

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According to a March 5th article in The Korea Times titled “Street Vendors, Restaurants at War in Myeong-dong,” the Jung-gu office estimated “over 190 vendors show up daily” concluding “altogether, the number is estimated to be 300.” It could be argued that the number of street vendors is comparable to the number of businesses (likely all of them) who are operating legitimately. The vendors pay no tax, and have unsubstantiated claims to continue operations; even in the wake of the restaurant owners petition district officials have maintained their position of defending the presence of the vendors, claiming that they are “important assets for tourism in Myeong-dong.” What is befuddling, however, is that many of the vendors are not single stall operations. Many of them own several different booths and hire part-timers who are paid under the table. This has given rise to various problems – such as highly inflated prices for scarce parking spaces – which are bid up far above the normal or equilibrium price and subsequently rented out exclusively to the street vendors with large operations.

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Both positive and negative externalities arise from the ever-growing presence of street vendors. For some, their presence is obviously good for business, but for others – like the restaurant owners, who have legitimate complaints – the consequences are obvious. If the government wants to maintain control of the situation, the smart thing to do would be to require all vendors to purchase annual permits, and to keep a lid on the number of permits it issues (as well as the number it issues to individuals). Regulating the vendors would in effect, at the very least, squash the complaints of restaurant owners that they are free from discretion.

Because all of the vendors are paid in cash, it would be difficult to call on them to pay tax on their income. In conclusion, if paying tax and operating a legitimate business isn’t an asset for tourism, Myeong-dong may lose some of its aesthetic appeal when restaurants begin boarding up their windows and the streets are no longer navigable due to too many street vendors. In this case – at least consumers will be better off when they all begin pricing each other out of business. Maybe things could then return to normal.

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DPO

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