## Sunday, September 25, 2022

One of the fundamental calculations done by Industrial Engineers are Make-or-Buy calculations.

They calculate the cost to make something in-house. They calculate any costs associated with purchasing an item outside. Then they compare the two.

According to one estimate by the Brookings Institute, it will cost parents about \$310,000 to raise a child to age 17 in the United States. That cost is blind to the costs borne by the greater public...libraries, public education, employer-paid healthcare insurance or Medicaid and so on as well as costs that occur after age 17 such as University educations and legal services. Also missing from the equation is the "opportunity costs" of lost income if one parent chooses to drop out of the workforce and parent-in-person.

If 2 million, young-but-working-age migrants are pouring across the US border every year, that equates to a \$620,000,000,000 yearly cost-avoidance.

The obvious question is "Why does it cost so much to raise children in the United States?"

1. My question is: What the Hey is the Brookings Institute using as their metric? Dividing \$310K by 20 gives \$15,500+ / yr. That is a whole lot of tennis shoes, pinto beans and rice.

2. I checked those figures and they're... kinda misleading.
Housing: 32% - biggest chunk. It looks like they're just dividing the average house cost by an additional person. Misleading, since the difference between a 1 bedroom apartment and a 2 bedroom apartment is only a couple hundred a month. For a house, most houses come with 3 bedrooms, so no extra at all there.
Food: 27% Possible, but children don't eat all that much. Perhaps this has a lot of expensive junk food and fast food built in. I'm used to cooking stuff instead of buying it.
Child Care: 12%-29% Yeah, if folks are silly enough to do that. I know that when my wife went back to work full time, we spent a lot more on child care and convenience food. After a few months, I pointed out that what she was making was barely covering those costs. She went back to SAHM with seasonal part time work, everyone was happier.

1. They assume two children and two parents so the \$21k per year median US housing cost is divided by four. Each person gets assessed the same amount for housing.

3. You're comparing apples to oranges.
There is so much inherent in the calculous, taking conclusions away from the math is at best dangerous. As stated in other comments, there are a million other factors to be considered.
The premise is sound (lets measure and compare), but I think its impossible to have an unbiased result with these types of formulas for several reasons.
For example lets take the concluding question: why is it so expensive? Does any of the current calculous allow for corruption and graft in the system? Do the per capita figures referenced include Sp. Ed.? I would wager those 2 categories alone push us way passed every other country on the planet. We spend an inordinate amount of resources trying to push the diminished up to average, while the above average see reductions in their resources to accommodate. Waaaaay more is spent trying to impact the left side of the bell curve at the expense of the right side. If you ever wanted to tank a society from the inside, you would shackle your superstars to provide unending support to your boat anchors. Take the two extremes of the bell curve and try to shove them closer together and you get mediocracy. Brilliant!

4. High costs beget higher costs. High student loan payments force both parents (assuming there are two of them) into the labor market even if the gain is marginal.

High costs make the fantasy that you will always make a profit selling your house very attractive. The deeper you plunge, the more you will make.

Jobs for "educated" people cluster in a few areas. Zoning laws that protect the housing values of current residents makes housing unaffordable.

1. Very good points.
I would add, however, that jobs for educated people are more widespread than most people realize.
Most people think they have to go to big cities for well paying science/ engineering jobs - while many are there, there are LOTS of exceptions if one looks around.
For example, my current engineering job is in a town of 4,000 that is over 200 miles from any town larger than 25,000 - and no, I'm not in Alaska or Hawaii.
I could make about 10% more in a big city, but average housing costs here are half what they are in the nearest big city while average pay (not mine) is higher.