We keep hearing the middle class is dying and the rich are getting richer while the poor are getting poorer. Is the middle class dying or is it changing? Websites such as Etsy, AirBnb, Fiverr and more, provide opportunities to earn a little extra money on the side. Thanks to technology, the average person can be a part of a community marketplace and use every asset they possess to make money. Supplementing economy is not just about picking up a second job at a local store. Now it’s about creating, producing and providing real services under your own autonomy. After all, isn’t being your own boss the dream?
This is a trend called micro-entrepreneurship. Micro-entrepreneurship is the idea that people can create their own business on a small scale. A person can work at bank but also rent out their extra room with Airbnb, help balance checkbooks on Fiverr and sell crafts on Etsy. This economic evolution is creating more economic independence and reshaping how people earn their income. Of course, there is still more to be done to create a better economic future however isn’t it nice to have a little extra money?
Many cities, such as San Francisco and Denver, are up in arms against Airbnb. Some believe that AirBnb is having a negative impact on the local economy. Some claim, people are buying up property in central areas for the sole purpose of renting out via AirBnb. This is increasing real estate costs and limiting housing for locals.
In San Francisco, AirBnb contributed ~$8.5 million to defeat Proposition F. The proposition would have limited how often owners can rent their properties. The proposition failed but many other cities are taking other actions against AirBnb.
San Francisco was the first city AirBnb launched. In 2012, they conducted a study on its effects on San Francisco’s economy. On average, a guest stays for 3.5 days and spends ~$840. 56% of hosts report that they use the income to help pay their mortgage or rent and 42% report they use the income to pay for regular living expenses. Looking at these statistics, it’s hard to believe AirBnb is negatively impacting the community, rather making it easier for many people to live in a very expensive city.
However, AirBnb still stands by the idea that majority of hosts are average people just looking for extra money. Majority of hosts are working families, or the so called, “dying” middle class. They simply have an extra room or invested in an extra apartment to supplement their income. Airbnb says their “global community marketplace” is an “economic lifeline” for many struggling families. On average, hosts make ~$7,530 a year in supplementary income from one property; this is the equivalent of ~14% raise. In unsure economic times, many people are taking comfort in the fact they have a back up to their job.