With the rise of social media, an increasing number of people have turned to these platforms to earn money. A report from Goldman Sachs reveals that 50 million individuals are making a living as influencers, and this number is expected to grow by 10% to 20% annually through 2028. Alarmingly, some creators are exploiting their children in the process by not giving them fair compensation.
How Do YouTubers Make Money?
You might wonder how YouTubers make money from their videos. YouTube pays creators for views through ads that appear in their content. The more clicks they get the more money they make. Advertisers pay YouTube a set rate for every 1,000 ad views, YouTube keeps 45% of the revenue while creators receive the remaining 55%. To earn money from ads, creators must be eligible for the YouTube Partner Program (YPP). YYP allows revenue sharing from ads that are played on the influencer’s content. On average, a YouTuber earns about $0.018 per view, which totals approximately $18 for every 1,000 views. As of September 30, 2024, the average annual salary for a YouTube channel in the United States is $68,714, with well-known YouTubers earning between $48,500 and $70,500, and top earners making around $89,000. Some successful YouTubers even make millions annually.
In addition to ad revenue, YouTubers can earn through other sources like AdSense, which also pays an average of $18 per 1,000 ad views. However, only 15% of total video views count toward the required 30 seconds of view time for the ad to qualify for payment. Many YouTubers also sell merchandise such as t-shirts, sweatshirts, hats, and phone cases. Channels with over 1 million subscribers often have greater opportunities for sponsorships and endorsements. Given the profit potential, parents may be motivated to create YouTube videos that attract significant views. Popular genres that feature kids include videos unboxing and reviewing new toys, demonstrating how certain toys work, participating in challenges or dares, creating funny or trick videos, and engaging in trending TikTok dances.
Child Labor Laws Relating to Social Media
Only a few states have established labor laws specifically for child content creators, with California and Illinois being worthy examples. Illinois was one of the first states to implement such regulations, started by 16-year-old Shreya Nallamothu. She brought attention to the issue of parents profiting from their children’s appearances in their content to Governor J.B. Pritzker. Shreya noted that she “kept seeing cases of exploitation” during her research and felt compelled to act. In a local interview, she explained her motivation for the change was triggered by “…very young children who may not understand what talking to a camera means, they can’t grasp what a million viewers look like. They don’t comprehend what they’re putting on the internet for profit, nor that it won’t just disappear, and their parents are making money off it.”
As a result, Illinois passed Illinois Law SB 1782, which took effect on July 1, 2024. This law mandates that parent influencers compensate their children for appearing in their content. It amends the state’s Child Labor Law to include children featured in their parents’ or caregivers’ social media. Minors 16 years old and under must be paid 15% of the influencer’s gross earnings if they appear in at least 30% of monetized content. Additionally, they are entitled to 50% of the profits based on the time they are featured. The adult responsible for creating the videos is required to set aside the gross earnings in a trust account within 30 days for the child to access when they turn 18. The law also grants children the right to request the deletion of content featuring them. This part of the legislation is a significant step in ensuring that children have some control over the content that follows them into adulthood. If the adult fails to comply, the minor can sue for damages once they become adults. Generally, children who are not residents of Illinois can bring an action under this law as long as the alleged violation occurred within Illinois, the law applies to the case, and the court has jurisdiction over the parent (defendant).
California was the second state to pass a law on this. The California Content Creator Rights Act was authored by Senator Steve Padilla (D-San Diego) and passed in August 2024. This law requires influencers who feature minors in at least 30% of their videos to set aside a proportional percentage of their earnings in a trust for the minor to access upon reaching adulthood. This bill is broader than Illinois’s bill, but they both aim to ensure that creators who are minors receive fair financial benefits from the use of their image.
There is hope that other states will see Illinois and California laws that give children influencers fair financial benefits for the use of their image in their parent’s videos and create similar laws. Parents should not be exploiting their kids by making a profit off of them.
Can Social Media Platforms Be Held Legally Responsible If Parents Do Not Pay Their Children?
Social media platforms will probably not be held liable because of Section 230 of the Communications Decency Act of 1996. This law protects social media platforms from being held accountable for users’ actions and instead holds the user who made the post responsible for their own words and actions. For example, if a user posts defamatory content on Instagram, the responsibility lies with the user, not Instagram.
Currently, the only states that have requirements for parent influencers to compensate their children featured on their social media accounts are Illinois and California. If a parent in these states fails to set aside money for their child as required by law, most likely only the parent will be held liable. It is unlikely that social media platforms will be held responsible for violations by the parent because of Section 230.