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COVID-19 has upended life for many of us, creating uncertainty for our families, our creative businesses, and the broader economy. Today, I sent Senate Majority Leader Mitch McConnell and House Leader Nancy Pelosi a letter urging them to ensure that any future COVID-19 relief package includes our nation’s microbusinesses and the self-employed.
This group of 57 million hardworking individuals are largely not covered by the current proposals on the table from Congress, so Etsy is urging lawmakers to take action to protect microbusinesses and self-employed Americans who are acutely impacted by the effects of the outbreak.
Together, these reforms would ensure that Etsy sellers can weather the immediate threat of the coronavirus pandemic, along with the longer-term threat of economic downturn. I invite you to read the letter and stand with our nation’s microbusinesses:
Dear Majority Leader McConnell and Madame Speaker Pelosi:
In the face of the rapid spread of COVID-19, lawmakers are rightly focused on sending immediate aid and support to our most vulnerable businesses and workers. Yet one vulnerable group—microbusinesses and the self-employed—are notably absent from the conversation.
Etsy represents 2.7 million creative entrepreneurs, 83% of whom are women and nearly all of whom run one person businesses out of their homes. As sole proprietors, they do not qualify for many social safety net programs, including unemployment insurance, disability insurance, or paid leave. Neither will they benefit from much of the important relief the U.S. government has already promised to workers and small business owners, including low-interest rate loans, emergency leave, or expanded unemployment protection. Yet, these businesses are among our most vulnerable to this current crisis, as they lack the financial resources to weather an unexpected decline in sales, and have no way to run their business should they get sick.
Etsy sellers are not alone. All told, more than 57 million people work independently in the United States.* Together, they comprise the emerging gig economy. These microbusiness, independent contractors, and self-employed individuals need an economic recovery package to help stem hardship due to COVID-19. Unfortunately, many of the proposals currently under discussion would not help these entrepreneurs. For example, they would not qualify for expansions of social benefits tied to employment, nor the disaster relief programs that target small businesses.
To meet this urgent need, we urge you to ensure that microbusinesses and the self-employed are a key part of any economic recovery package through the following means:
Direct assistance – While the paid leave credit included in the most recent coronavirus relief package will certainly help the self-employed, it will not cover many of the costs they currently face. In addition to the direct payments currently under discussion for all Americans, Congress should create a supplementary direct assistance program for the self-employed and microbusinesses to help cover the cost of lost business, paid sick leave, individual health care costs, and fixed expenses.
Unemployment protection – The self-employed are not eligible for unemployment protection. The federal government should immediately fund an unemployment protection fund for the self-employed and gig workers, which would allow them to receive benefits in the event of declining income due to decreased demand for their goods or services.
Business-critical services – Etsy sellers depend on critical e-commerce infrastructure, including financial services, shipping, and internet connectivity. The federal government should ensure that these essential services remain fully operational, even as the public and private sectors take greater measures to contain the spread of the virus.
Tax and debt deferral – We fully support deferring the April 15 deadline for federal tax returns, and suggest expanding that deferral to include the subsequent two quarterly tax payment deadlines, which place a significant financial burden on the self-employed. We also urge the government to negotiate deferred mortgage and credit card payments for self-employed microbusinesses, who often operate out of their homes and use personal credit cards to fund their business.
Earned Income Tax Credit – The Earned Income Tax Credit is an important source of income protection that already works equally well for gig workers and traditional employees. Congress should expand EITC by increasing the income threshold, including younger and childless workers, and eliminating the marriage penalty. Lawmakers should also allow it to be calculated and administered on a quarterly basis, which would better support individuals struggling to manage short-term income volatility.
Disaster Relief – Many of the government’s disaster relief programs simply do not work for the self-employed. Congress should appropriate funds for a Self-Employment Assistance Fund within the EDA’s Economic Adjustment Assistance and SBA’s Disaster Relief Loan programs, and require these agencies to quickly issue guidance enabling the self-employed to access these programs.
Taken together, these reforms would dramatically ease the burdens faced by Etsy sellers, as well as the millions of independent contractors, self-employed individuals, and microbusiness who are driving the broader gig economy. At a time of so much uncertainty, let’s not leave our most vulnerable entrepreneurs behind.
Josh Silverman CEO, Etsy