Inside Etsy's surprisingly ambitious policy agenda - Technical.ly Brooklyn

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Apr. 3, 2017 7:34 am

Inside Etsy’s surprisingly ambitious policy agenda

The online marketplace launched a Microbusiness Caucus in Congress last week. We spoke with Althea Erickson, Etsy's senior director of global policy, about the company's most pressing policy goals.

Etsy is lending a hand to help craft policy for solo business owners.

(Architect of the Capitol; photo via Wikimedia)

The shift toward independent work has been alternatively dubbed the “gig economy” and the “1099 economy,” and it’s come with lots of gloomy pronouncements about the crumbling of financial stability for many workers in the U.S.

Tech companies such as Uber, Postmates and TaskRabbit are often cited as the vanguards of this new labor movement, often in unflattering terms.

But the idea of a tech platform supporting a vast field of independent workers isn’t new. In the past, it’s been heralded as a potential life-changing revolution for aspiring self-bosses: for instance, the notion of the “eBay millionaire” in the mid-2000s. Amid its massive growth and IPO in 2015, Dumbo’s own Etsy has become the successor to this vision. The company’s website now hosts some 1.7 million shops worldwide, most of which are run by just one person. Altogether, those “microbusinesses,” as Etsy calls them, generated $2.8 billion in gross sales.

But as any self-employed person will tell you (this freelance reporter included), it’s not at all easy being the boss — and that’s long been a sticking point for Etsy’s sellers, on whose prosperity the company depends. As a result, Etsy has stepped up its political advocacy efforts in the past couple of years, with the goal of influencing more favorable policies for microbusiness owners.

Last week, the company scored a prominent victory.

On Tuesday, it announced the creation of a Microbusiness Caucus in the House of Representatives. It will be chaired by four representatives: two Republicans, Barbara Comstock of Virginia and Patrick Tiberi of Ohio, and two Democrats, Anna Eshoo of California and Tim Ryan of Ohio.

“The very nature of work is changing, and microbusinesses are a driving force behind that,” Rep. Ryan said in a statement. “Congress must stand ready to rapidly respond to the needs of workers and employees of micro businesses. Our economy will be stronger for it.”

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Rep. Comstock also highlighted the role of microbusinesses in boosting gender parity within entrepreneurship. A whopping 87 percent of Etsy sellers, for instance, are women.

“We know that women comprise about one-third of business owners, so this is also a way to expand opportunities for women business owners,” she said in the same press statement.

The news of the Caucus was also cheered by several business organizations, including the Internet Association and the Freelancers Union, whose members’ needs in many ways overlap with those of Etsy sellers.

Along with the announcement of the Microbusiness Caucus, Etsy released its annual survey of sellers on its platform, called the Seller Census. At first glance, the portrait it paints seems quite contrary to the usual small-business platitudes politicians like to rally around. Etsy sellers aren’t big job creators: three out of five said they don’t want to grow so much that they have to hire additional employees.

"We're engaging conversations around the WTO to have this put into future trade agreements."
Althea Erickson, Etsy

But on the flip side, they are supporting small manufacturers: 20 percent use outside production partners. Then, of course, there’s that $2.8 billion gross sales figure. According to Althea Erickson, Etsy’s senior director of global policy, that’s a key selling point in getting politicians to hear the concerns of Etsy sellers.

“You can hear their ears perk up when they hear that number,” she said.

Etsy argues that policy tailored for microbusinesses such as its sellers would help inch that number even higher. The needs of such business are distinct from those of traditional small businesses, Erickson told Technical.ly. Small-business advocacy often focuses on access to capital, for instance, but that’s not a big concern for Etsy sellers, whose businesses can be launched pretty cheaply — on as little as $5, she said. On the other hand, income stability is a pressing issue, given that their sales can fluctuate significantly from month to month. Another issue is benefits such as retirement savings, which are traditionally provided by employers.

Additionally, Erickson pointed out, some business regulations are rather unfeasible for one-person shops to carry out. For instance, retailers are typically required to collect and remit taxes for each jurisdiction in which they sell — in the U.S., that’s nearly 10,000 to keep track of, which is a daunting task for just one person. One of Etsy’s goals is to create an exemption from this obligation for microbusinesses.

“When you’re a business of one, you are doing everything,” Erickson said. “Time is your most precious and scarce resource.”

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Even prior to the creation of the Microbusiness Caucus, Etsy has been quite busy with advocacy.

The company has organized three events to bring groups of sellers to meet with their representatives in Washington, D.C., most recently this past week. On the local level, it has launched initiatives to pair sellers with officials in their cities to help formulate policy geared toward microbusinesses. This spring, it will relaunch that initiative as a grant program.

That work to date has already yielded some legislative results. Etsy supported increasing the value threshold in the U.S. under which goods being imported from or exported to other countries would not be subject to tariffs. Last year, the threshold was raised from $200 to $800. That increase makes it easier for sellers who source supplies from other countries, Erickson said, as well as those who ship their products internationally. The company’s next goal, she added, is for other countries to adopt this new threshold.

“We’re engaging conversations around the WTO to have this put into future trade agreements,” she said.

Etsy, in fact, has a whole slate of policy goals, which it lists on its site. At first glance, some of those goals, such as simplifying taxes and regulations, seem particularly aligned with current political trends, whereas others, such as net neutrality, do not. How does Etsy plan to address those potential conflicts?

The company’s platform will remain the same regardless of which party has control of Congress or the White House, Erickson said, but it will defer to the priorities set by the chairs of the Microbusiness Caucus. The bipartisan nature of the caucus is quite deliberate, she said; Etsy believes the topic of microbusiness is one on which both Democrats and Republicans can find common ground.

“We really do recognize that some issues that impact sellers tend to be more Democrat and others tend to be more Republican,” she said. “My hope is that we’re able to remain bipartisan.”

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