«We're seeing a ‘99% to 1%’ inequality in many cities»

«We're seeing a ‘99% to 1%’ inequality in many cities»

«We're seeing a ‘99% to 1%’ inequality in many cities»

PublishedNovember 2018
Words byJuliet Schor

Juliet Schor is Professor of Sociology at Boston College and a widely known researcher on the sharing economy. Since 2010, she has studied how digital platforms are reshaping urban life — from housing and mobility to labor and social relations.

For Schor, however, the sharing economy is only one piece of a much larger urban transformation. It operates within cities already marked by deepening inequality and social exclusion. As she puts it, many urban areas today are experiencing «a ‘99% to 1%’ inequality, where a very small group of mega-wealthy are bidding up housing prices while the majority of citizens are getting priced out.»

«A very small group of mega-wealthy people are bidding up housing prices, while the majority of citizens are finding that everything is becoming unaffordable.»Juliet Schor

In this context, sharing platforms can function both as coping mechanisms and as amplifiers of existing dynamics. They may provide economic relief to some residents, while at the same time reinforcing processes such as gentrification, discrimination, or environmental strain. Regulation, she argues, will be decisive in determining which path cities ultimately take.

CTB:
You have been studying the sharing economy for more than a decade. What is a 'sharing city'?
JS:

I’ve been studying the sharing economy since about 2010. A sharing city is a city that has active policies oriented toward platforms and innovations that allow people to 'share.'

These include things like bike sharing, accommodation sharing, food swapping, and similar initiatives. There are also related activities that might not strictly be sharing in the technical sense — such as repair cafés or maker spaces — but that fall under the same broader umbrella of collaborative practices.

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Image by Brett Danielson on Death to Stock

«Today, cities are increasingly regulating sharing platforms to ensure they operate in ways that genuinely benefit residents.»Juliet Schor
CTB:
You connect the sharing economy to broader structural challenges. What are the main issues cities are facing today?
JS:

The two big challenges facing cities today are growing inequality and climate change.

We see very profound inequality in many cities — a kind of '99% to 1%' dynamic — where a very small group of mega-wealthy people are dominating cities, bidding up housing prices and living in extremely extravagant ways. Meanwhile, the majority of citizens are finding that everything is becoming unaffordable and that they are being priced out.

This creates deep social exclusion. At the same time, cities are on the front line of the climate crisis. So inequality and decarbonization are central urban questions.

CTB:
Airbnb is often cited as a paradigmatic example of the sharing economy. What does your research show?
JS:

There’s no doubt that Airbnb has made it possible for some middle-class people to stay in their homes — homes that might otherwise have become unaffordable due to a job loss, a divorce, or other life circumstances.

For many people, it has been a lifesaver. Being able to host someone and generate additional income has allowed them to remain housed.

At the same time, our research shows that Airbnb has very much contributed to gentrification. We see rising rents, housing units being pulled off the long-term rental market into the short-term market, housing values increasing, and people being pushed out of neighborhoods where they have lived for a long time.

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Image by Mark Forbes on Death to Stock

CTB:
Beyond housing prices, are there other social impacts?
JS:

Yes. In the United States, we find strong racial dynamics associated with Airbnb.

People living in predominantly white neighborhoods tend to have much better outcomes than people living in neighborhoods with more residents of color. We see racialized impacts in how hosts are rated. Other researchers have also found that Black guests are turned away from Airbnb.

Importantly, there is no regulation in the U.S. that prevents racial discrimination in lodging in this context. So Airbnb is an interesting case because it is doing both — providing income opportunities for some while simultaneously reinforcing inequality and discrimination.

CTB:
Cities initially welcomed these platforms. Has that changed?
JS:

When the sharing economy first emerged, cities didn’t do much. But as they began to see the impacts, they became much more proactive.

Today, cities are increasingly regulating sharing platforms to ensure they operate in ways that genuinely benefit residents. We see regulations around lodging and ride-hailing, and I think we will increasingly see more regulation around gig labor.

As new regulatory frameworks come into place, the positive benefits of these platforms can be strengthened while many of the negative impacts are curtailed.

«There’s no doubt that Airbnb has made it possible for some middle-class people to stay in their homes, but at the same time, our research shows that it has very much contributed to gentrification.Juliet Schor
CTB:
Looking ahead, what does a just urban future look like to you?
JS:

The most important thing is that it is a carbon-free city — that we have decarbonized our environment and are no longer using an energy system that is harming people and the planet.

It also needs to be a much more socially inclusive city, where large numbers of people are not marginalized or excluded from urban prosperity. And it should be more participatory and democratic — a city where citizens collectively determine their future.

Technology can be an important part of that empowerment. But it has to be technology controlled by people — not by a small number of companies that own the data and use it primarily for profit.

Technology should be in the hands of everyone and used for the common good. ●

Interview byMartina Jané i Curtu, Content Strategist at Citiestobe & Communications Consultant at Anteverti
Edition bySergio García i Rodríguez, Editor of Citiestobe and Head of Communication at Anteverti
Video byCristóbal Sarría Chitty and Alexis Rivas