These days, it seems like everybody has an opinion about the so-called “gig economy.” Advocates cast it as a triumph of innovation and opportunity, while detractors describe instability and decreased protections for workers. Amid the increasingly polarized debate, however, there’s a growing consensus that we need a new benefits system to provide economic security to those who earn a living outside a traditional 9-to-5 job.

As a company that serves nearly 1.7 million micro-businesses, we couldn’t agree more. That's why today we’re releasing a new report, “Economic Security for the Gig Economy: A Social Safety Net that Works for Everyone Who Works”, which outlines a series of policy proposals that would deliver a stable and flexible safety net for all.

The US economy is undergoing a fundamental shift. Fifty years ago, the average worker expected to stay with one employer for the duration of their career, and that employer provided a full suite of benefits that guaranteed economic security to the worker and their family. Today traditional full-time employment is no longer the norm. More people than ever—including the majority of Etsy sellers—work independently and combine income from multiple sources. As a result, a growing number of people lack access to the benefits that ensure basic economic security.

Though policymakers increasingly recognize the inadequacy of our current benefits system, the public debate surrounding the gig economy has been narrowly focused on on-demand platforms, and, as a result, proposals have failed to cover all of the people impacted by the changing nature of work. That’s why in addition to publishing this paper, we’re bringing a group of Etsy sellers from around the country to Washington DC today, to share their stories and demonstrate to policymakers that Etsy sellers are an important constituency who need economic security too.

We believe there is a need to broaden the conversation and start articulating alternatives that guarantee a social safety net to everyone, regardless of how they earn money. Our proposals attempt to do just that, and are based on the premise that everyone needs:

A single place to manage benefits, regardless of income source

Tying benefits to employment excludes too many workers and results in economic inefficiencies. We propose creating a Federal Benefits Portal, which would tie all benefits (retirement, health insurance, paid leave, tax-advantaged savings accounts, disability, etc.) to the individual, providing a single marketplace to view, choose and pay for their benefits, regardless of where or how they earn income.

A simple, common way to fund those benefits

Although payroll has been a useful way to administer benefits, it excludes everyone working outside of traditional employment. We propose using tax withholding as the universal means to administer benefits contributions, enabling both employees and 1099s to withhold their Social Security and Medicare taxes from their pay, as well as an additional percentage of pre-tax income to fund benefits. All withheld pay and matching contributions would be routed to an individual’s account on the Federal Benefits Portal, where they could allocate consolidated contributions across plans.

A way to manage income fluctuations

Those outside traditional employment often experience considerable income volatility, and lack income protections like minimum wage or unemployment insurance. We propose combining all existing tax-advantaged savings accounts (health, dependent care, parking and transportation) into a single MyFlex Account, which anyone could use to manage short-term income fluctuations throughout the year. To manage more catastrophic income loss, we propose expanding the Earned Income Tax Credit and allowing it to be administered quarterly.

These proposals are not meant to be prescriptive, but rather, the beginning of a conversation. In publishing this paper, we hope to broaden the scope of the current debate about the future of work in the US and put forward ideas upon which others might build. That’s also why today we’re announcing the newly created Etsy Research Fellowship, which will provide grants to PhD students to support scholarly work that both demonstrates a unique challenge faced by creative micro-entrepreneurs and proposes a potential policy solution that addresses it.

No matter how you work or who cuts your paycheck, everyone should have a social safety net that protects them in times of need. As work changes, more people will be able to pursue their passions on platforms like Etsy. We believe in enabling sellers to start, grow and manage their businesses on their own terms. But they need the financial security and protection to do so. If we are to fulfill the promise of a people-centered economy, we need a social safety net that works for everyone who works. Header image by: VivianCaits