I was alerted to an article on the cost of raising children by one of my brothers who, with his wife, has six children. The USDA estimates that the cost of raising children from birth to age 18 for a middle-income, two-parent family now averages $226,920. That’s up by 40% from just ten years ago. Now, right away, you ought to question a reports that inflates the cost of some activity by 40% in just ten years. It strikes me that how they collect the data has changed, not just the costs. My brother, father of six, says, I’m supposed to believe that my six children are likely to dent my pocketbook by over 1.3 million dollars ($262,000/kid), not including college and wedding expenses? Something about “lies, damned lies, and statistics” comes to mind here. Me thinks that the USDA needs to get back to inspecting meat!
Let’s look at the report, and then ask some technical and philosophical questions. I am here quoting from a CNN Money report on the study. These are excerpts, the full report can be read here: HERE. As usual, the original text is in bold, italic, black, and my comments are plain text red.
Forget designer strollers and organic baby formula, just providing a child with the basics has become more than most parents can afford. The cost of raising a child from birth to age 18 for a middle-income, two-parent family averaged $226,920 last year (not including college), according to the U.S. Department of Agriculture. That’s up nearly 40% — or more than $60,000 — from 10 years ago. Just one year of spending on a child can cost up to $13,830 in 2010, compared to $9,860 a decade ago.
Again, beware of a 40% figure here. The average annual inflation rate for the past 10 years is 2.37% . Hence it would seem other things than just inflation are factored into the number. What are they? Do parents do more voluntary spending on their children? Are they less able to say “no” ? It is not clear. So even if we accept the number, (which I am not certain I do), we need to know what factors went into the assessment. This is because the 40% increase is almost double the inflation rate for the ten year period. And remember this, even the inflation rate of 2.37% can mislead if we do not remember that wages have also inflated in the period. Some will argue, and I agree, that wages have not kept pace recently with inflation, due to higher unemployment. But remember 2.37% inflation over ten years is not an absolute cost number, since wages have increased some, as well.
“Everything is more expensive and each family makes its own set of trade-offs,” said Ellen Galinsky, president of the Families and Work Institute in New York. “Many parents are working longer hours, or another job, and they are giving up time at home….
OK, but to be fair, wages are up in the past ten years. Let’s admit they have lagged behind inflation a bit. So the deeper question remains, Why is the cost of raising a child up 40% in ten years? If, and I do not cede this point, the number is real, why? It is more than inflation. There are behavioral issues at work here too. Not every parent feels compelled to buy tennis shoes that light up for their children, others do. This is behavior, not just unavoidable costs. Some parents use “hand-me-downs” in their families, others do not. This is behavior. Some use a lot of childcare (costly), others do not. This is behavior. We do not need to be locked into this $226K number. Chosen behaviors can have a lot of influence.
From buying groceries to paying for gas, every major expense associated with raising a child has climbed significantly over the past decade, said Mark Lino, a senior economist at the USDA.
But again, the ten year inflation rate is NOT 40%. So the question is, if these cost have acutally risen, why? Are all the costs unavoidable?
Food prices, in particular, have weighed on parents’ budgets as rising demand for commodities like corn and wheat, along with other factors such as rising oil prices, drought and floods, have made even a box of cereal a pricey proposition.
Almost two years ago, I blogged on whether the cost of basic essentials is really higher today, than in the 1950s, a period widely perceived to be a prosperous time for US families. In that post, (read it HERE), we explored a significant amount of data that indicated that the cost of almost everything was higher in the 1950s (in inflation adjusted dollars) than today. The essential problem today is that we need and want more of everything. Life was simpler back in the 1950s, but today we “require” many more add-ons. Thus, while we can look at food prices in the past few years, the big picture indicates that, many years ago, things like food and gas and clothing, took a higher chunk of our income than today.
Even more recently, in the economic downturn, the Consumer Price Index (CPI) has only slightly elevated to about 3.7%. Food prices edged upward, especially in 2007, as a percentage, but other prices came down. And then things became more stable as the economy slouched in later 2007. Hence, while prices are higher, the overall CPI has not dramatically jumped, as the the CNN Money report seems to want to indicate. Wages of course, in this era of higher unemployment are less upward and will tend to lag behind the CPI. But remember if we look at ten years (as the CNN report and the USDA report claim to do), rather than focus only on the past few years, the overall numbers are still, steady as you go.
Many employers scaled back or even did away with medical coverage in recent years, leaving many families to cover that bill, said Lino. At the same time, costs for doctors visits, medications and other health services also climbed. As a result, health care costs for families with children rose 58% over the decade, he said.
Here too, there are a lot of behavioral issues involved. In recent years we run to the doctor more quickly. All but free medical care has made us prone to presume a doctor needs to see us for the merest reason, and that prescription medicines should be available to us free of cost. When I was a child, the emergency room was for real emergencies, a place rarely seen, and the doctor was consulted only after the usual drug store products proved ineffectual. There was the usual “yearly check-up” to get a few shots, and do preventative medicine. But today, the expectations are much higher.
Demand for services inflates costs, and we do well to ask questions not only of employers, insurance companies, and doctors, but also of ourselves. Medical costs don’t have to be up 58% in every household.
I realize that some, reading this will say, “How dare you, and a priest at that, suggest that complete medical coverage is not an absolute and inalienable right of every human being?!” But in the end we do take care of uninsured people in this country. Most emergency rooms, if accredited, are required to provide care even if a medical insurance provider is not identified. We ought to provide urgent medical care for to the poor. But the focus here is families, and it remains a valid question as to whether all recourse to the doctor and hospital is immediately required just because I happen to think so. A little personal triage is helpful in families to keep costs down and medical costs don’t have to be 58% higher for all families in all circumstances.
All of this comes at a time when incomes are shrinking and unemployment is near an all-time high. Over the past decade, median household income has fallen 7%, according to a recent report from the Census Bureau. Granted, this is true in the last four years. But remember the USDA numbers cover ten years. There are cycles, this one has been severe, but children are part of a twenty year cycle and the numbers there are still steady.
For many parents, choosing to work and pay for child care is often a difficult trade off when they might otherwise stay home. “The sad truth is, when you weigh the cost of child care and the cost of my wife driving back and forth to work it comes out to an extra $2 to $3 an hour,” Ben Hammond, 31, said of his wife’s decision to return to the workforce after their second son was born. “But we can’t really live without that.“
I’d like to know why. I will not personally judge a situation where I don’t know all the details, but I wonder if this family really needs everything they choose to pay for. What are some of the voluntary things that could be foregone? Even Air Conditioning in every room, and two cars aren’t always essential. Smaller houses, fewer commodities (extended cable, etc) can make a difference. Prioritized spending can put to the lie many things on the list that we say we cannot live without.
OK, well you get the point. USDA and CNN Money report that child care costs have risen 40%. But it seems, I would suggest, there is more behind this data than mere inflation and victimized families caught up in an unjust economy. There are many personal lifestyle decisions that all of us Americans engage in. The list of things we cannot live without grows ever longer. And it is worth asking, “Is it really true that I cannot live without all these things?”
I am not immune from such questions. In recent years, due to the terrible economy, the Lord has called me to be more generous to the poor. This means that I too have had to ask what creature comforts and latest gadgets I can do without. The fact is, we Americans want a very comfortable and very pricey life. Fifty years ago most Americans easily lived without most of the things we deem essential today. I admit most of us are expected to have cell phones and some Internet connectivity. I do not suggest that we can simply get in a time machine and live exactly like we did in 1960. But, in the end, there are choices we can make to simplify and lower our expectation that life should always be a peach.
A final philosophical question. Why does our culture always seem to talk about and emphasize the cost of raising children, and not discuss the benefits? Children are a wonderful gift from God, (or a least we used to think so). Today they are more often described as a burden, as a cost center. We did not used to think of children in this way. In the not so distant past (60-70 years ago and prior) large families were desirable, children were valued, pregnancy and birth were called the “blessed event.” Scripture says, May your wife be like a fruitful vine within your house, Your children like olive plants around your table (Ps 128:3). Today, the birthrate has plummeted and children are more often seen as something to contracept, (God forbid) abort, and generally to be tolerated in only small numbers.
Some will say, “But Father, it costs so much today.” That is debatable, but I still think that the real reason is that what we value most has changed; our priorities and preferences have shifted. They have shifted away from life and family, to things and creature comforts. There are many complexities that may also factor in, but in the end, an awful lot comes down to what we really value and want. It is not so much the economy that has changed, it is we who have changed.
As always, I write, not to have the last word, but to begin a discussion. Please add to this, indicate necessary distinctions, and feel free to differ or say “yes, but.”
This video shows just a few ways to cut costs, of course many other things could be added: hand-me-downs, smaller houses, fewer amenities, smarter shopping using coupons, less shopping, don’t need every upgrade, etc. So much of what we call essential is not absolutely so, or is at least not necessary all the time.