Fraser Follies: Kids are cheap edition

Every once in a while the Fraser Institute will write something so sloppy and transparent that even a schmuck like me can see through it. Such is the case with today’s release of their report “The Cost of Raising Children” (also discussed here in the Globe, CBC and by Don Cayo in the Sun.

The big red flags in this report is that they don’t include the cost of daycare or housing.

Yes, you read that right.

But first, based on a 2011 Moneysense article1 that bases its estimates solely on costs in Winnipeg and an “informal online survey” down in 2010 for Today’s Parent magazine (amongst other things) the Institute calculates the cost of raising a child – sans daycare, sans housing – to be $2,264.38/yr for a 4-year-old and $4,115.04 for a 12-year-old. Or $6.20/day for the former and $11.27/day for the latter. That’s not food. That’s everything. Except daycare. And housing.

One thing that popped out for me is the Institute study used average family household income for families with children, rather than median. Which is what you’re supposed to use, really, when discussing non-symmetrically distributed things like income. According to the study, the average after-tax household income in 2009 with 2 parents, 1 child  was $109,412. According to StatsCan, the median after-tax household income in 2007 with 2 parents, 1 child+ was $73,000. Gee, I wonder why they chose to use the average rather than the median. The study also doesn’t include the loss of income if one parent stays home because it’s “difficult”. But that’s easy to calculate from the StatsCan report above – the median income of  a 2 parent, 1 earner with children household is $49,300. So 73,000 – 49,300 = $23,700. Of note, the average cost of daycare in Vancouver is estimated at $1200/mo (which jives with my personal experience). That’s $14,400/yr and certainly not economical for one parent to forgo employment.

So, yeah, daycare. Why wasn’t it included?

Well, says the Institute, based on nothing at all,  “it’s mainly because many families with children will have little or no daycare costs”. For example, “in some two parent (intact) families, one parent may decide to stay at home” which, as we saw above, isn’t actually very economical. How many households are there where one parent decides to stay home? Well the HRDC (sorry only Google web cache available at the moment) says it’s the minority. In 61.9% of 2 parent households with children both parents work. Oh, btw, that’s for 2001. So by “many families” the Fraser Institute actually means “the minority of families”. Oh, there’s this chestnut too: “In other cases, parents may have free daycare at their place of employment or have a close relative who cares for pre-school children.” Yes, free employer-provided daycare. You get that when you receive your T4 and your unicorn. A relative helping out is more reasonable, but again no stats are cited in support. From anecdotes I know some relatives get paid for full-time daycare service or some other cost in kind.

And then there’s housing, also known as “shelter”. Well it shouldn’t be included either. Home ownership, you see, is a “financial investment that yields a rate of return over time.” The “over time” part is the key one. Oh sure, when you’re 65 you can sell your house and make, perhaps, a nice profit. But that really doesn’t help you in the here and now, does it? Also suggested by the Institute: Housing costs don’t have to rise if you have extra children – you can just make them sleep in the closet under the stairwell.

So what’s it all about then? Well, concludes the Fraser Institute:

There are vested interests in having high costs for raising children. The social welfare community, a broad coalition of public service workers, social activists, academics, and many journalists, is active in lobbying the state for more resources for families with children. This agenda, associated with left-liberal and social democratic positions, is part of a redistributionist perspective and it would be naive to ignore the influence it has on public policy. A high cost of children is consistent with this agenda.

The infamous Childcare-Industrial Complex. Also, and: Socialism.

Similarly, child support schemes that compel non-custodial parents to pay custodial parents [more in child support]

Nothing angry white man about that.

So, people of Canada, stop being afraid and start having more babies. Canada needs a good source of future cheap labour a boost to the national birthrate.

1 The author of which stated “I found that some of the costs we calculated were a little low” (Cornell, 2011: 6)”.

UPDATE: Edited for clarity.

UPDATE 2: RossK explains why some of the peer reviewers at the Fraser Institute might still be dead.