Axios Markets

June 26, 2024
👋 Welcome back. Let's get into it. Today's newsletter is 1,281 words, 5 minutes.
1 big thing: GiveDirectly's awkward collaboration with Mr Beast
Earlier this month, a pairing of strange charity bedfellows was unveiled. It might have been worth a try, but it's not clear that it worked well for anybody.
Why it matters: YouTuber Mr Beast (nee Jimmy Donaldson) embodies, in many ways, exactly the kind of charity that GiveDirectly was founded in opposition to. This is why it's so weird that the two have now teamed up — and is probably also why GiveDirectly has felt the need to defend the collaboration.
Mr Beast is the face of "stunt philanthropy" — high-profile and ostentatious giveaways designed to go viral on YouTube.
- GiveDirectly, by contrast, founded by four Harvard and MIT graduate students in economics, is the epitome of a cerebral, low-drama charity, focused only on results for those being helped.
Driving the news: Beast Philanthropy's video with GiveDirectly has already garnered 6 million views on YouTube — off the scale by the charity's standards, if a bit subpar for Mr Beast.
- As part of the deal, Beast Philanthropy donated $200,000 to GiveDirectly, thereby funding more than half of the cost of giving each of the village's 300 families $1,000.
- Beast Philanthropy also paid its video production costs, which are substantial, given that his company reportedly employs six people just to work on thumbnails.
Zoom out: Mr Beast specializes in giving away stuff that people need — clothes for the cold, food for the hungry, cataract surgeries for the blind, wells for the thirsty, shoes for the unshod.
- GiveDirectly, by contrast, sees those kind of operations as being paternalistic and inefficient. It's dedicated instead to the power of unconditional cash transfers — trusting and empowering the needy to use donated cash where it's needed most.
- There's abundant research showing that direct giving is much more effective — which is a reason GiveDirectly has received millions of dollars from nerdy types like Ethereum creator Vitalik Buterin, eBay founder Pierre Omidyar, and Facebook co-founders Dustin Moskovitz and Chris Hughes.
What they're saying: GiveDirectly is worried that it's not popular among the non-nerdy majority. In a recent poll of 750 potential donors, direct cash assistance was ranked 9th out of 9 options in terms of helpfulness for the extreme poor.
- "Working with the most watched person on Earth will help us reach more people in need," writes GiveDirectly in a blog post about the video.
State of play: Beast Philanthropy is trying to raise another $150,000 to help a neighboring village.
- So far, viewers of the video haven't been particularly generous on that front — they've donated just over $17,000, or less than a third of a cent per video view.
The bottom line: This was always a bit of an awkward collaboration. By partnering with Mr Beast, GiveDirectly hoped to be able to reach a huge audience of potential donors and convert them to the idea of direct cash transfers.
- In practice, however, Mr Beast's viewers seem to be more interested in watching philanthropy than in practicing it themselves. And Mr Beast's production team clearly had a very hard time trying to turn a simple transfer of cash to 300 mobile phones into compelling video content.
2. How Mr Beast sells GiveDirectly
A close look at Beast Philanthropy's video helps to underscore how hard it is to square GiveDirectly's wonkish model with Mr Beast's narrative-first instincts.
The big picture: Less than a minute into the video, Mr Beast says that "giving thousands of dollars to people who have never experienced that kind of money before is extremely irresponsible."
- The leader of his philanthropy, Darren Margolias, similarly describes the concept as "a terrible idea" and "a recipe for disaster" before, inevitably, being converted by the stunning success of the $300,000 giveaway in terms of increasing school enrollment, creating new businesses, and broadly improving the quality of life and self-determination in the village.
Between the lines: The aim is to set up a narrative arc of skepticism to conversion — one that would ideally be mirrored in the attitudes of a typical viewer.
- But it's far from clear that Mr Beast, popular as he is, is particularly good at changing people's minds.
Zoom out: Mr Beast is famously obsessive when it comes to titles and thumbnails — the things that convince his viewers to press "play."
- The GiveDirectly video is advertised with a thumbnail of Mr Beast (who never went to the village in question, Karamoja, Uganda) next to a villager who's grinning while standing in front of a pair of traditional mud huts and holding an armful of dollar bills.
- The title of the video, "We Gave Every Family in a Village a Full Year's Salary," is also a bit weird — after all, almost no one in the village is on any kind of salary.
Zoom in: 20 seconds in, we see a skinny, impoverished Ugandan woman using a tin cup to pour muddy water from a puddle into a broken bucket.
- From there it's straight into the bare feet and mud huts familiar from countless aid campaigns, before the tone shifts to one of triumphal joy after the cash arrives.
The bottom line: GiveDirectly's post, which is directed at loyal existing donors, has a defensive tone. That's because Mr Beast's video is definitely not the kind of thing that appeals to GiveDirectly's core donor base.
3. The messed up market for child care workers


The number of people working in child care still isn't back to pre-pandemic levels, finds important new research from the Chicago Fed.
Why it matters: This sector is a key part of the U.S. economy. Without access to care, parents, typically women, often can't join the labor force — at a time when the job market is still tight.
By the numbers: A big problem is that child care workers' pay is extremely low — the median wage is $14.60 an hour, in the bottom 5% of all occupations, the research finds.
- That's less than increasingly attractive alternatives in fields like waitstaff ($15.36); or housekeepers ($16.08).
- Pay for child care workers, adjusted for inflation, increased just 5.5% between 2019 and 2023, while those other low-paying service sector jobs have experienced much bigger increases (see the chart above).
Zoom in: What's distinctive about the Chicago Fed report is that it attempts to hone in only on those employed in traditional child care — not K-12 school workers.
- Other data from the Bureau of Labor Statistics that are typically used to evaluate employment in the industry covers a broader swath of workers — and in that cut, employment has recovered to pre-pandemic levels.
The big picture: The child care job market is unusual. There is a record number of mothers in the workforce, and the demand for child care is high right now. Prices have gone up, other research has found.
- You'd expect that the high demand for caregivers would lead to higher wages to attract more workers. That's what happened in the restaurant sector, where pay for waitstaff is up nearly 18% since 2019.
- But the child care sector is constrained when it comes to prices by what parents of young children — folks likely at the start of their careers with more limited funds — can pay for care. (The restaurant sector, by comparison, has a wide customer base.)
- When parents can't afford care, typically they drop out of the workforce — to provide that care themselves "for free." And parents who live close to extended family, who are willing and able to provide free care, may be more price sensitive, the researchers point out.
The bottom line: Pay for child care workers is lower than other similar jobs — and employers can't necessarily raise prices to attract more people —  so the industry is struggling to hire and parents are struggling to find care.
Thanks to Kate Marino for editing this newsletter and to Mickey Meece for copy editing it.
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