LOUIS HYMAN: We're lucky tonight because we're talking about something that we're all afraid of, which is, of course, the coming retail apocalypse. All the journalists tell us, in the next few years, there'll be no more places to shop, which for me, as a historian, somewhat of consumption, makes me terrified. Also because I love to shop.
But in the middle of this, it's not just, of course, about the things we buy. It's about the jobs that could be lost through this entire process. So many of us work in retail these days.
Now, of course, for many Americans, this collapse has already happened, and they have found a way to open their own shops, even if they live far away from their customers, out in the country, or just on the other side of the state. And this way, this path to independence, for lots of people, is Etsy.
Now, its sales platform is decidedly female, and nearly all the sellers and all the buyers are women. And it holds out a possibility which is pretty exciting, where the future of work is the future of retail, and it looks like that. It looks like the future is a future of women.
And so tonight we have with us Althea Erickson, who is the head of Global Advocacy and Policy at Etsy. And she leads Etsy's effort to advance public policies that make it easier for Etsy sellers to start and grow their creative businesses. She is responsible for developing and advancing Etsy's policies on portable benefits and economic security, tax and regulatory simplification, net neutrality, global trade, and all the other important things that make it possible to work and sell through Etsy.
Now, prior to joining Etsy-- you won't be surprised-- Althea was the Advocacy and Policy Director at the Freelancers' Union, where she led a successful campaign to repeal unfair tax laws and promoted legislation to protect freelancers from unpaid wages. And so tonight, she's going to tell us a little bit about how women are becoming entrepreneurs in the digital age and what we can do to support them. So let's all give a big welcome to Althea Erickson.
ALTHEA ERICKSON: Hi, everybody. Is this on? Yeah?
LOUIS HYMAN: I think it's on, yeah.
ALTHEA ERICKSON: OK. All right. It's on. I love how many women are in the audience this evening. It's so exciting.
LOUIS HYMAN: It's a normal tech audience.
ALTHEA ERICKSON: That's right. That's-- yeah. Huh. Yeah. So My name's Althea. I lead Advocacy and Policy at Etsy. For those of you who aren't familiar, Etsy is an online marketplace where you can buy handmade and vintage goods from entrepreneurs all around the world.
And just a little bit about our community. I think we've got 1.9 million active settlers all around the world. 87% of them are women. So as was said, heavily, heavily female.
Almost all of them are working out of their homes. And I think folks may have a tendency to sort of stereotype them as cute little hobbyists who are making stuffed animals in their jammies, but that is not the case. And 73% of them consider their shops to be a business. They really are business owners in their own right.
78% of them, though, are businesses of one. So they really are micro businesses. They are the smallest businesses. And their needs and challenges really do differ quite a bit from even a 10 or 15 or 20 person business. Also, they have unique motivations.
And so many of our sellers do not start their businesses with a desire to grow as large as possible and take over retail. Instead, they're starting it as a form of supplemental income, as a way to balance earning income and raising a family, as a way to find meaningful creative work. And we think that-- at Etsy, we talk quite a bit about finding success on your own terms, and that that's what we want to enable and promote, and that growth for growth's sake isn't necessarily what's driving our seller community.
They may be small, but together, they add up to quite a bit of economic impact. So last year, they sold $2.84 billion worth of goods around the world. And they are global-- they're micro multinationals. They're global businesses. We have 30 million buyers in every country, all around the world. And many Etsy sellers are shipping and selling internationally from the minute that they open their shops. So that's pretty unique.
And we really think Etsy sellers do sort of represent larger shifts in the economy. So already, 40.4% of the US workforce is comprised of contingent workers. And it's not just in the US. We see 14 million folks in the UK are part of the independent workforce. 30% of the working age population in Germany are engaged in independent work. And the number of independent professionals in France grew by 85% between 2004 into 2013.
So you can see this growing increase in the number of people who are working independently and on their own. This may be hard for you all to see, but I'll just give you the top line headline for employment among Etsy sellers. Fully 53% of them are working independently. That includes maybe running their shop full-time, having some other kinds of self-employment in addition to their Etsy shop or part-time or temporary work.
And they are combining income from multiple sources. So 33% focus on their business as their sole occupation. It's their full-time job. But for the rest, it's an important source of supplemental income. Many are supplementing other forms of self-employment, so you can imagine like a freelance graphic designer who is also selling stationery on Etsy, for example, and using income from multiple places to put together a portfolio of income to support herself.
Only 32% of our sellers are full-time employees. So in that way, I think of them as like canaries in the coal mine. They also-- so while they are similar, I think, to many of the workers and the broader independent workforce and what folks talk about when they talk about the changing nature of work, they are unique from many of the people that have traditionally or are currently traditionally dominating the debate.
This may be a bit small for you all to see too, but often, when folks are talking about this new workforce or the independent workforce, they're thinking of the Uber drivers, the handy cleaners, the folks who are sort of working for on-demand platforms. And I think there are some key elements that are important to consider.
They're not-- those on-demand folks are in the service sector, whereas Etsy sellers are retail. Many of those folks are paid hourly, whereas our folks are paid when goods are sold. And then I think once, obviously, there's some serious sort of misclassification issues on the on-demand side. That's certainly not the case for Etsy sellers.
And I think this is a key point. That on-demand folks are often identified as workers, whereas Etsy sellers identify themselves as business owners. And that distinction shifts the way people think about what their challenges are and what their solutions are, and I would argue that we need to break down those barriers to come up with what the actual things are that would help our folks.
So Etsy seller's experiences, I think, really do shed light on the challenges of the new economy. And they can teach us a lot about what work and entrepreneurship will look like in the future and the challenges that we're going to be facing in the next 50 years, and also what we can be doing now to support them.
And for us, I think we really are talking about the new face of entrepreneurship. And it's not just entrepreneurship, we're really talking about the new face of work. And traditionally, I think, often, we put people into boxes. Either you are a business owner, or you're a worker.
And we need to recognize that people can be and are, frankly, both, and that their needs are unique, and that they're changing fast. And that while the economy is changing very quickly, our laws and policies and systems of support have not kept up. And so what we at Etsy work on quite a bit is how can we evolve those laws and policies to support this growing workforce.
So what can we do about it? We have three areas where we think we really should be focusing to innovate for the new economy. The first is around economic security and making sure that we do build security for everyone who works, regardless of how they work. Second is make it easier for anyone to start and grow a micro business. And then third, to foster collaboration through government, the private sector, and I think, most importantly, communities to more quickly drive change and adapt to change.
So let's look at each of these areas. And since we're at the IRL School-- ILR School--
LOUIS HYMAN: We're-- in ILR. We're In Real Life Industrial Labor Relations.
ALTHEA ERICKSON: Thank you. I'm focusing more on the economic security and worker side of things.
LOUIS HYMAN: Perfect.
ALTHEA ERICKSON: But I'll talk about the other ones as well. So first, economic security. People really are out on their own in this world of work, and they need systems of support to catch them if they fail. And it's really important that those systems of support be tied to the person and not their job.
And I think that yes, the conversation around the broader gig economy has focused on economic security and portable benefits, but I also think it's been too narrowly focused on platforms like Uber or Lyft, where frankly, they look a good bit more like traditional labor-worker relationships, and I think that makes them very tempting, when you're thinking about solutions, to retro fit our old models to them, as opposed to thinking more broadly about what would work for everybody, regardless of how they are working.
So we would really urge that instead of imagining an Uber driver, when you're imagining what should the social safety network look like for this workforce, instead of imagining an Uber driver, you imagine this woman, who is, yes, an Etsy seller, but also a freelance graphic designer. And maybe sometimes she writes for a blog, and she's combining income from multiple sources. And we need to make sure that no matter how she's earning that income, she's able to put that together in a way that creates economic security and allows her to build financial security and stability over time.
So we really, again, think that it's really about creating a system that works for everybody who works, regardless of how they work. We published a paper to this effect last year, really trying to start from scratch.
So we thought a good bit about the differences between being an employee and being an independent worker. And for employees, your employer provides access to benefits and assumes many of the administrative burdens, whereas as an independent worker, you're really on your own to go figure out, how am I going to find health insurance? Is there an IRA I can sign up for? Where am I to get it? When can I even contribute to that thing?
So they lack access to group rate benefits and have to find alternatives on their own. Employees, their contributions are automatically deducted from their paychecks, whereas independent workers are self-funding from their checking account when they can, but never sure if you can, because maybe work's going to dry up next month, and you're going to need that to pay your rent.
And then lastly; for employees, income is predictable, generally. And not for everyone, certainly. We were talking about scheduling challenges that many workers face in the service sector. That is real. But in general, you know that when you've done the work, you're going to get this paycheck, whereas for independent workers, income fluctuates quite a bit, potentially seasonally, or work dries up, and you don't have a way to manage those challenges.
So we started from the basic premise that everybody needs, first of all, a single place to manage your benefits that's not tied to your job. Second, a simple common way to fund those benefits from multiple income streams. And third, a way to manage income fluctuations.
So first, one place to manage your benefits. So Etsy Sellers who earn income outside of traditional employment really do need just one place. And it's got to be tied to them and not their job.
So we proposed this idea of a Federal Benefits Portal. You could think about it in a similar way as the Exchanges under Obamacare, where there could be one portal that aggregates benefits; public benefits, private benefits, union plans, what have you. They would all be registered on the Exchange.
And that individuals would be able to see and enroll in only the plans that they're eligible for, but that also that they could rollover between plans. Right? And you could imagine that that system could accept contributions from multiple sources, right? So money withheld from your paycheck, money matched from an employer or another payer, money that you're putting in directly from your checking account. But that that would be one place to manage those benefits, which would be lovely.
Second, a simple, common way to fund those benefits. And really, to make it automatic. And if you think about it, for employees, most of your benefits are administered through payroll, which actually makes things quite easy. So employers are withholding FICA taxes to fund your Social Security and your Medicare, your disability, whereas the self-employed have to pay self-employment tax quarterly to fund those benefits.
Employers withhold pretax contributions to your retirement, your health account, all of those things, whereas either if you're independent, often you just don't qualify for those benefits. Or if you do manage to, you have to fund them through your checking account at random times.
And then lastly, even new proposed benefits, they're always built on a payroll system. So if you look at, for example, some of the federal legislation that's been proposed around paid family leave, it's all built around an employer and employee contribution through payroll and basically leaves out the self-employed. And that's very frustrating, I think, for us, when you think about all of the women on Etsy who very much would benefit from a paid family leave benefit, but who because of the way that we structure benefits and think about things in this country, would just unintentionally be excluded from those programs.
So we think that tax withholding-- which is not a sexy thing, but I get really excited about it-- could replace payroll as the primary means of paying for benefits. And that would really be sort of a universal system.
So what would that look like? Well, basically, the systems to administer this already exist. If you're a W-2 employee, you fill out a W-4, and you say how much of your taxes you would like to withhold. You could do the same thing as a 1099 worker. Just when you fill out your W-9, say, I would like to withhold x amount to pay for my self-employment taxes, all of these things.
And that basically, because many folks' income is already reported through a 1099, you could just bring a lot more people into the automatic contribution system. And we've actually seen Congress take this up recently. Senator Thune introduced a bill in Congress which would enable those who get a 1099, limited to just digital platforms, to be able to withhold 5% of their income to fund their benefits. So that is already happening a good bit faster than we would have thought.
And then if you tie that back to the first proposal around a federal benefits system, you could imagine those things-- it working together. Right? So the money that's being automatically withheld from your paycheck, no matter where you're getting that paycheck, would be appearing in your Federal Benefits Portal, and you could be deciding, I'm going to spend x amount on health insurance, y amount is already going into my Social Security, what have you. So that's that one.
And then finally, a way to manage income fluctuations. And income volatility is a huge challenge for the self-employed. Right? So if you think about an Etsy seller, we're just next week going to hit the biggest shopping day of the year. Etsy Sellers sell quite-- I mean, their income goes way up over the holiday season, and then in January, it goes much further down, when people aren't purchasing gifts for the holidays.
They need ways to manage that income volatility. And that's not a problem that our current safety net addresses, because in traditional employment, it's just not a challenge. So we don't even have models for this particular problem.
So we're proposing two different approaches to income volatility. The first I'll talk about addresses that more short-term income volatility, like earning quite a bit over the holidays and then less in the beginning of the year. The second is more designed to address more catastrophic income loss that traditional benefits, like unemployment, might cover.
So for the short-term piece, we're suggesting basically combining all of the existing crazy tax advantage savings accounts that we have in this country for medical costs and dependent care and transportation and parking, and you have like seven different debit cards in your wallet, and you're never sure how much you put aside, and I've got to buy like 10 pairs of glasses before the end of the year. I'm going to lose all my money.
We just recommend combining those into one single account that would allow you to spend that pretax money on any of those eligible expenses. So if one year, you have a medical emergency, you can spend the balance on that. Maybe the next year you have a baby, and so you can spend it on dependent care, and that that would better reflect the changing needs that people have in their lives.
We also would like to roll that over year over year, which would allow you to save over time. And also we added this idea that you could save pretax money for days off. Because independent workers don't have paid time off. And so could you pre-fund some savings so that you could actually take a day off work here and there, which many of our sellers really have quite a bit of challenges with that as well. Again, you could manage that through the Federal Benefits Portal and fund that in that way.
And then lastly, for the more catastrophic income loss, which for a traditional employee, you would have unemployment insurance, we would recommend expanding what's known as the Earned Income Tax Credit, which already exists. A lot of folks in Silicon Valley are very excited about the Universal Basic Income. We hear about a lot.
I am less convinced on that front. I think the Earned Income Tax Credit has the benefit of already existing, and is means tested, so it actually goes to the people who need it the most. It also has support from both Republicans and Democrats, which in this day and age is like a magical unicorn. And so I don't see why we wouldn't love that.
And I think the one thing that we would say is also it could be administered quarterly, as opposed to annually, which would better reflect the needs of the self-employed. And again, you could see how it would all work together. And I think that's a little small for you to actually be able to see, but you could imagine, OK. Well, I see it all in one place. I'm having all my taxes withheld. Actually, if I put a little bit more into my flex account, maybe my earned income tax credit would go up. And so if you have it all in one place, you're better able to manage your overall financial security.
So that's on the economic-- and that was a long road into nerd town, and I apologize for that. But it is--
LOUIS HYMAN: Never apologize for tax policy.
ALTHEA ERICKSON: We're in nerd town, I know. I know. But I do think, overall, I'd say, on the economic security stuff, but the larger point is we really have not built a system that works for the independent workforce and the women who are in it. And so I think it really is time for us to think about breaking down those old models and to think of some new ones. And so these our best ideas, but they're just sort of ours. And I think really what we're trying to do is push folks to think differently about what types of solutions would really help folks.
So that's the economic security side. The second thing I mentioned is make it easy for a business of one. And this is when you take off your worker hat and you put on your business hat. Again, our folks are fitting into this world that policy makers don't even really think about because they're micro-businesses. They're businesses of one.
And so policymakers talk all the time about small businesses. I don't know if you've ever seen-- John Oliver did a thing a couple weeks ago where he looped over and over every legislator saying, small businesses are the backbone of the economy. And it was on the right, and the left, everybody loves talking about small businesses, but they are never talking about our people.
Because they're always talking about the small businesses that they want to grow very quickly into big businesses. And so when they think about the challenges that small businesses face, they think access to credit, which, with the advent of technology, many people can't start businesses for very little money, and frankly, almost no Etsy seller takes a loan out to start her business. She starts it with her own savings. Earns income selling things and plows that right back into her business and grows it more sustainably over time.
They focus on government procurement, which does certainly create opportunities for many small businesses, but I don't know many policy makers that are buying, like, knitted iPad cozies. And so--
LOUIS HYMAN: Yet.
ALTHEA ERICKSON: --that-- I know. Maybe soon. Not a huge market opportunity for our sellers. And then lastly, they talk about business education, which could be so helpful, because many Etsy sellers are, in fact, artists who make beautiful products, but don't have business training and are teaching themselves how to start and grow their business.
And so I often think of them as DIY entrepreneurs. And it's not just that they're DIYing their products, but they're actually going online and trying to figure out how to do a marketing plan and bookkeeping and SEO, and all the skill, the business skills that they need to start and grow.
But the skills that government often tries to teach is focused on employing more people as quickly as possible, gaining access to a large amount of capital that feels totally overwhelming and not relevant to their business, and really like, grow, grow, grow-focused services, as opposed to financial planning. For our sellers, most-- for a lot of them, their business finances and their personal finances are all wrapped up in one. And so figuring out how to parse those apart or do that effectively would be so helpful. But we're not-- we don't get that.
So that's all to say that when you're running a business of one, your challenges really are focused on time, right? If you're doing everything, time is your most valuable and precious resource. And you're doing everything yourself.
So what do you need? Well, first, you need access to the internet. And Etsy's done quite a bit around net neutrality, both access to affordable, reliable broadband, but also ensuring that the playing field is even, and that large companies can't just pay for faster access to consumers. We see the internet as a democratizing force for small businesses online, and that's something we really need to protect.
Second, you need access to global markets. And frankly, our trade laws are built for giant businesses that are shipping containers worth of things from one country to another, and they don't at all consider that you might be selling one good from your home to another person's home using your national postal service. And so we've been working quite a bit on trying to simplify those trade laws and also create faster, more direct shipping routes, and simplify customs and all of those burdens for sellers.
And then lastly, you need to simplify the rules and regulations. And this feels so obvious to me, and yet every time I talk to a policy maker, they are only envisioning Amazon when they're designing e-commerce policy, and what Amazon can comply with. They are not imagining a woman in her home making something.
And so a good example, for example, is consumer protection laws. Many Etsy sellers make toys. The rules around consumer protections, there's two different ways you could do it. The way that many of the laws are structured is you have to spend a bajillion dollars sending your good to be third-party tested, where if you're making a million unique items, it just is not cost effective to do that.
There are other countries that allow you to self-certify your toys. So for example, do durability tests in your own home, where you're pulling on the different things. And so long as you do the tests, and you certify that they pass those tests, then you are allowed to sell those toys. And I think there are strategy-- if you're imagining, what could a business of one do, when you're working on those types of regulations, you design them much differently than you do if you're imagining a major-- Mattel.
So I think that's some of the things that we're working on the business side. And then lastly, and this is not specific to business policy or labor policy, but just sort of how we do policy is we really need to recognize, I think, that the world is changing more quickly than ever. And we don't know what the needs are going to be 10 years from now, but we do need to adapt more quickly.
And we shouldn't be looking for quick fixes or solutions that just get us through today. We should be thinking how government and the private sector and communities can work together to co-create solutions that will enable all of us to thrive in a changing economy. So how do we do that?
First, we need to connect policymakers to the people that are impacted by their work. That also seems so obvious to me, but I can't tell you how rarely it happens. And if you go and talk to a policy maker, they too are very focused on if you say worker, they have a particular set of needs and concerns in their heads and a particular set of solutions that we have worked over for years. And if you say business, they have a whole different but equally as rigid set of understandings of what the challenges are and what the solutions are, and they don't even hear you, because they already know.
But when you bring an Etsy seller or a group of Etsy sellers in, and they describe their day-to-day experience, suddenly, their eyes open, and they say, oh my god. I had no-- oh yeah, that makes so much sense. Because people are describing their day-to-day experience in a way that they can understand. And that just breaks apart those very rigid, preconceived notions and allows them to think more creatively about how we solve them. So that's the first.
Second, we need to break down the barriers between the public and private sectors. I think folks have a tendency to be like, this is government's job, and this is business' job. And in fact, most things are kind of neither but would work better if we collaborated on them. And I think we do all have a stake in building a stronger, more resilient society.
Examples of that might be, so for example, we talked about a Federal Benefits Portal. I don't think the government needs to do that whole thing. Potentially, the government could do just sort of the back-end database. What are all the plans? Where are the contributions coming from? The database.
But third party providers, private sector, could provide the front end of that. They could do it as an open API. And then folks in the private sector could build an entryway that makes sense for their communities that is particular at meeting their needs. It's curating things down for them that's actually making it usable.
I don't know if you've gone to a government website lately, but it's not often a very pleasant experience. We could do that better, I think. And we could do it using technology and open data in a way that actually would allow that to work.
Similarly, customs and duties data is a nightmare to find on government websites. We could just put that in a database, and then Etsy could call to that database. And at the moment somebody in Japan buys something from somebody in the US, we could tell them, hey, there's going to be this charge on it, or you've got to tell your buyer this, or what have you. That would make for a much better and seamless experience, if we were collaborating more directly.
And then lastly, and I think technology really is the glue to a lot of this. I think we are moving so quickly. We can solve these problems a lot more quickly than we have, in the future, through things like open APIs. Through open source code. I think the government has a long way to go in figuring out how-- it has started to move in that direction in many ways, but we have considerably further to go. And for the technologists in the room, I would say, to the extent that we can work with government to make that work, that would be amazing. And to really harness that power to solve tomorrow's problems today.
So just in wrapping up, just to sum it all up, I think the economy really is changing, and it's changing very quickly, but it's changing in a way that is creating incredible opportunities. And I think Louis started out by talking about the robots and technology is coming, and I think if you read the news, you start to feel so depressed that the robots are all going to come and take our jobs. And I don't know what we're going to do.
But then I think about the experiences that sellers that I meet and talk to every day, and I feel so much hope and optimism about the types of opportunities that technology and the digital economy and just the world are creating. And I feel that we really are moving to a place that the future could be much more bright.
But we but we do have some work to do. And that is to create economic security for the new workforce and that works for everybody, not the 20th century workforce, but the 21st century workforce. We need to adapt the rules of the road in a way that work for micro-businesses, and we need to recognize and validate that being a micro-business is OK and good and not sort of a second-class citizen to a 50 person business or a 200 person business or your next Silicon Valley high-growth startup.
And lastly, we need to figure out how to collaborate better in order to solve these problems, because that's the only way we're going to be able to adapt to the changes as quickly as we need to. But I think if we do do that, then the future of the digital economy and in particularly, the role of women in that is very bright. So thanks.
LOUIS HYMAN: That was fabulous. I have a couple questions before you open up to the audience.
ALTHEA ERICKSON: Yeah.
LOUIS HYMAN: why do you think women are so much better at adapting to this economy than men?
ALTHEA ERICKSON: It's interesting. I don't know. Are women better at adapting to this economy than men, or is the economy adapting to women, I think, is another question. You know, I think about the explosive growth that Etsy has experienced, and I think it's filling a need for many women, as you have more and more folks who are operating-- we've moved past a world where men are going to work, and women are in the home. We have a lot more two-income households. And I think you're seeing opportunities that enable women to fulfill multiple goals at once.
And so that shift of women into the workforce, really, I think, demanding the ability to have careers and build businesses and have co-equal partnerships, and raise families together, that that shifts-- there are different priorities there. And then the economy is, in some ways, I think, adapting to those needs. And it's not just the needs of women. It's the needs of whole families as the role of women have changed and evolved in society.
LOUIS HYMAN: I think one of the things that is most surprising to me when I look at the data of Etsy is how people do it as their sole source of income. They may have had work in the older economy, but once they start finding their way into this, suddenly, they find a way to make it work for them. What are the barriers? So you're saying it's not a barrier of capital. It's not a barrier-- it's a barrier of just knowing this is possible? Is that part of it?
ALTHEA ERICKSON: I mean, it's interesting. I mean, I think in some ways, platforms like Etsy really reduce the risks of entrepreneurship. So you don't have to have a fully baked business plan and marketing strategy to start your business on Etsy. You really can list an item for $0.20 and see how it sells.
And I think that enables many folks to dip their toe in, find some success. Easily like shift their product offerings, try new things. And then as they find success, grow and build over time, and that on ramp to entrepreneurship means that it's not the very moment of starting that's hard. It's the transition that can be challenging.
And I think some of the biggest challenges our sellers face are around learning the business skills. So many of them have very beautiful, amazing products that very quickly find consumers, and then they need to quickly figure out, how do I take it to the next level? How do I manage my inventory in a reasonable way? How do I keep my product costs low enough to protect my margins? What are my margins?
LOUIS HYMAN: What's a margin?
ALTHEA ERICKSON: Exactly. I mean, I think there's--
LOUIS HYMAN: What's an API? Yeah, all these--
ALTHEA ERICKSON: Right. That there's-- am I-- I said it at that price, because that's what I thought I would pay for it, but actually, it turns out I'm spending 10 hours making it, and that's not enough to pay me. And so I think the transition from trying it out to constructing it in a way that really works as a business is often very challenging for many of our sellers.
LOUIS HYMAN: That's fascinating. And we're going to take some questions from the audience. If you just raise your hand, and we'll bring you the microphone. OK. [INAUDIBLE].
AUDIENCE: First, thank you. It's really interesting, especially to hear one of these stories that you don't really see in the press, unfortunately. One of the biggest benefits that I think companies have access to that didn't come up are interns and internships. Has there been any exploration of partnerships with universities like Cornell that could match students who need either credit or work experience to Etsy sellers who need assistance with business strategy, digital, and social media?
ALTHEA ERICKSON: I mean, we have not explored those types of partnerships, but they would be amazing. We
LOUIS HYMAN: Let's talk about it.
ALTHEA ERICKSON: I know, let's do it.
LOUIS HYMAN: Let's do it.
ALTHEA ERICKSON: Great.
LOUIS HYMAN: Good idea.
ALTHEA ERICKSON: But we do have relationships through sort of second-hand into universities is the small business services centers, which I think are often-- and women's business centers, which are often affiliated with a university. And we have a craft entrepreneurship program which basically teaches folks who have a product they want to sell, but don't have entrepreneurial skills.
The particular entrepreneurial skills-- specific to e-commerce. So things like how to take great product photography, which matters so much to actually converting people into buyers. SEO is a huge thing for e-commerce. Those sort-- but also pricing, margins, marketing generally, it includes many of those things.
But it is a standalone course that we do in partnership with those types of organizations, and we haven't done a matched pairing or coaching, which would be cool. Because I think people talk a lot about the SCORE program as a mentorship program, which often ties retirees with business owners as mentees in coaching.
But it, again, is often focused-- many of the retirees that are supporting it are sort of entrepreneurs who build big businesses that-- and the problems we are trying to solve are a bit different than the challenges that our sellers face today. And obviously, e-commerce is not often what their expertise is in. So [INAUDIBLE].
LOUIS HYMAN: Any other questions from the audience?
AUDIENCE: Thank you so much. Really interesting talk. I was just wondering if Etsy offers any kind of access in training programs to women that are trying to start up their own business that don't previously have any exposure to taking good product photography or learning about personal finances. Because I feel like it's a platform for a lot of women to get access to starting their own financial security. And I was wondering if they do any kind of training.
ALTHEA ERICKSON: Yes. So we have a pretty robust Seller Education Team that does most of its education through online blog posts. So it's not-- so we have-- the one in-person training program we have is that Craft Entrepreneurship Program. But basically, the role we played there was developing that curriculum. And then the partner organizations provide the curriculum and often adapt it to the particular community that they're working to serve.
But in general, yes. There's a lot of educational content. It's just delivered in an online blog sort of way. But we've been thinking quite a bit about how to make that most relevant and useful.
AUDIENCE: Hi. So a lot of your seller, you say, this is their sole means of income, right?
ALTHEA ERICKSON: Yeah. About 30%.
AUDIENCE: 30%. That's a lot. That's a lot of people. And you've done a lot of research and prototyping and ideas around how to give them benefits if the government were to do it. Why doesn't Etsy do it?
ALTHEA ERICKSON: Yes. So I mean, there's a couple of things. One is the way that the laws are structured. You actually can only offer group rate insurance if you're an employer or a union or a church or-- there are a few other entities--
LOUIS HYMAN: All the laws are set up for what happened in 1947.
ALTHEA ERICKSON: Exactly. So technically, Etsy could not offer group rate health insurance.
AUDIENCE: The Church of Crafts.
ALTHEA ERICKSON: The Church of Craft. We could start our own. Yeah. It's very complicated. But basically, you can't offer group rate health insurance. And so in fact-- and especially with Obamacare, where there are subsidies available. And I didn't go through the demographics of our sellers, but most-- many of them would qualify for subsidies. Our sellers can get much better coverage through the Obamacare than we could give them access to.
But we do partner with an organization called Stride Health, which tries to make the process of signing up for that much easier. The other thing is Etsy has very low margins. So in terms of like paying for coverage, Etsy takes 3 and 1/2 percent of every transaction, which is quite low compared to other platforms. And we do that to return--
LOUIS HYMAN: It's comparable to what you get charged from a credit card.
ALTHEA ERICKSON: Exactly. So there isn't-- in terms of paying for health insurance, there just isn't any money there to pay for it. But I think the first answer is the most accurate one, which is we couldn't give them a better deal. I think it's something we've explored several times, and every time, I'm like, yeah. We can't really offer anything of value that they couldn't get on their own.
LOUIS HYMAN: but you did fight-- if I remember correctly, from reading something written by Etsy, that it went from about 18% to about 30 some percent independent once there were these Obamacare exchanges, right? Or, I'm sorry. Trumpcare. We're supposed to call it Trumpcare now.
ALTHEA ERICKSON: Oh, sorry. Yeah. The ACA. We could just call it the ACA. Yeah. I think that they-- yes. Many of our sellers-- I don't know what the exact status. You are remembering it better than I am. But many of our sellers did take up the health insurance once it was available. And many of them get their health insurance through their partners, when you find out-- when you actually dig into where they're getting their health insurance.
LOUIS HYMAN: But it's so exciting, the idea that people could get rid of some-- the next session we're going to have is on algorithmic scheduling, which if any of you work in a shift job, you know. Because you know that the boss doesn't set your schedule, the algorithm sets your schedule. So all those people who work at Starbucks, in this case, the Gap. Retail work is not as fun as making things and getting that pleasure. And people and connecting with customers. It seems-- when I-- it seems that way. So that people make this choice once they have this opportunity, they go into it.
ALTHEA ERICKSON: Yeah. I think for both buyers and sellers, I think the personal connection that people feel when they're both-- when they're making something and having that connection with a buyer who is many times-- I don't know how many of you have shopped on Etsy, but often, you can--
LOUIS HYMAN: How many of you shopped on Etsy?
ALTHEA ERICKSON: Oh, so everybody has. Great. So if you-- so if you're like, oh, I would like that in a different color. Oh, I love that pillow, but I want it in a different color, you can just email them, and usually they'll do it, and it's so nice.
And you build that rapport, which frankly-- we actually just-- we evolved our mission. It's not radically different, but we made it much more simple and direct, which is just to keep commerce human. And that really resonates with me, because I think, in a world-- we talked about robots-- you know, where you just press a button, and it arrives at your doorstep the next day, delivered by a drone and what have you, sometimes it's just nice to talk to a person about the thing that you want. And then they write you a handwritten thank you note when you get it in the mail, and that, I think, is worth preserving.
LOUIS HYMAN: Well, I can tell you, I organize a lot of talks, and we talk about different e-commerce venues, talk about Uber or Lyft or Amazon. The only one people gush over is Etsy. People go, Etsy. You're having someone from Etsy come? They get really excited. So any other questions? from the audience?
LOUIS HYMAN: Yeah. Oh. We had a question from online. Just one second. About sustainable sourcing practices. So a lot of the laws that we have about toys is to prevent people from poisoning children.
ALTHEA ERICKSON: Poisoning children. Which we don't want. I didn't mean to imply that if I did.
LOUIS HYMAN: I think we can all agree you want to poison children. Yeah. That's what we took away. Obviously, we didn't. But how does Etsy think about this? You don't want it to be sourced by child labor. You don't want it to be sourced by destroying some sort of natural resource. What kinds of guidelines are available there that are important, the way we regulate the consumer marketplace.
ALTHEA ERICKSON: Yeah, absolutely. So there are two different ways that we approach that. One is Etsy has particular policies around what can and can't be sold on Etsy. So for example, you can't sell weapons or other-- there are certain things that we prohibit, just ourselves, that we feel could be dangerous. For example, anything-- that you can't make any medical claims about particular things. Whatever.
So there are some things that we just outright ban, but then there are other ways that we try to enable our sellers to indicate their own sourcing practices. For example, we recently launched a separate marketplace for supplies and allowed those to be badged with things like organic or recycled or other sorts of things where you could really see what's going into your materials. And frankly, many Etsy sellers talk about their sourcing strategy as a competitive differentiator and prioritize those issues.
So technically, legally, it's up to our sellers to comply with the rules and the laws where they are selling their goods and to make sure that they're doing that. But at the level above complying with the law, we try to create opportunities for them to highlight and build a consumer base based on responsible sourcing.
LOUIS HYMAN: There was a question in the back.
AUDIENCE: Hi. I love your name. The Etsy name. And I was just curious, how did you come up with that name?
ALTHEA ERICKSON: So it's a secret. And I don't know the answer to the secret, so I'm not not telling you the secret. The founders decided that they would never tell. Technically, I'm supposed to make something up whenever asked that.
LOUIS HYMAN: Oh, really?
ALTHEA ERICKSON: Yeah, but I am never good at doing that. So I just tell you the truth, which is I don't know.
AUDIENCE: Could you say a unicorn gave you the idea.
ALTHEA ERICKSON: Yeah, I could say it. A unicorn.
LOUIS HYMAN: A unicorn.
ALTHEA ERICKSON: Well, Rob Kalin is our founder, so gave him the idea.
LOUIS HYMAN: That's great. Any final question? All right. So thank you, Althea. You can stick around for a few minutes. And thank you everybody for joining us tonight, whether in person or online.
And next time, we'll be talking about algorithmic scheduling, which sounds a lot scarier than it is. But it's really important, because it's how a vast swath of our population is actually working today. All right. See you then. Thanks, Althea.
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The Future Of Work Series continues, hosted by Professor Louis Hyman of the Cornell ILR School. With nearly $3 billion in annual sales, Etsy has transformed artisanal goods into big business. More importantly, Etsy has created an opportunity for millions of people, but especially women who are 86% of sellers, to become entrepreneurs in the global digital economy.
Althea Erickson, head of global advocacy and policy at Etsy, explains how women have become global entrepreneurs through Etsy and what this means for the future of work.