Monday, August 26, 2013

Fraser Institute study a distraction from the true cost of raising kids

The Fraser Institute study excludes many of the realities faced by Generation Squeeze from its analysis

VANCOUVER, BC, Aug 26, 2013/ Troy Media/ – My hat goes off to all hard-working parents, past and present. They raise kids with love, joy, sacrifice and frustration. My parents did.

Still, the facts show that families raising young kids today are squeezed for time, income and services to a degree that is more constraining than a generation ago. Surprisingly, the Fraser Institute alleged otherwise last week, claiming “It’s never been easier, financially, to raise children in Canada.”

There are millions of parents who wish the Institute were right. So do many young people who delay starting families. Alas, wishing doesn’t make it so. Here’s what is weighing down younger generations.

We all know housing prices have increased substantially. For those who bought homes decades ago, higher housing prices mean more wealth. But what’s been good for retiring parents is generally bad for their kids. High home prices squeeze generations under age 45 with crushing debt, which they must pay with wages that have fallen compared to a generation ago, and in jobs that rarely contribute pensions.

Gens X and Y have adapted. To compete for better employment, they squeeze in years more of education and tuition. To buy a place, they accept jobs or contracts that require years more of work to save a down payment. And for many, this means they wait years longer to establish their financial independence.

Seeing their adult kids caught between time and money pressures, many Boomers also adapt. They invite their kids to live at home longer, support the cost of post-secondary education, contribute to a down payment, etc.

Even with all this personal adaptation, most in Gen X and Y can’t work their way out of the time-and-income squeeze when they start families. Since two earners bring home little more today than what one breadwinner often did in the 1970s, we’ve gone from 40 hour work weeks to closer to 80 hours. The result? Generations raising young kids are squeezed for time at home. They are squeezed for income because housing prices are nearly double, even though young people often live in condos, or trade yards for time-consuming commutes. And they are squeezed for services like child care, which are essential for many parents to deal with rising costs, but are in short supply, and often cost more than university.

The Fraser Institute study excludes these realities from its analysis. It includes NO comparative data from different time periods. So it offers no evidence with which to answer the question “is it financially easier to raise kids now compared to the past?”
The study actually addresses a different issue: what does it cost to raise a child today? The author calculates the cost is between $3,000 and $4,500 a year. He generally excludes what parents pay for housing and child care services. I’ll leave readers to assess whether they think this estimate is realistic.

All should ask, however, why does the Fraser Institute dismiss the reality that younger generations are more squeezed now than in the past? Many will know the Institute is skeptical about the value of government investment. But Gens X, Y and their kids are not the primary beneficiary of social spending. Governments spend around $45,000 a year per retiree in Canada, mostly on healthcare, pensions and retirement income subsidies. This spending is nearly four times larger than government spending per younger Canadian. Grade school, post-secondary, healthcare, child care, parental leave, EI and workers compensation all combine for a total of around $12,000 annually per person under age 45.

Younger Canadians already face a generational imbalance in government spending on top of their worsening wages relative to housing costs. By discounting the time, income and service squeeze on younger generations, the Fraser Institute distracts attention away from this imbalance. Fortunately, there are Canadians of all ages across the country who believe younger generations deserve a better deal.

Dr. Paul Kershaw is a professor at the University of BC, and the Founder of the Generation Squeeze campaign (; @gensqueeze).

Originally posted at [Original link].

Editors Note: This piece is an excellent breakdown of the lose/lose situation young generations face and is right in line with the content here at Canadian Trends thus I have reproduced it.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for CenturyLink

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.


  1. The truth is that it is very much possible that more and more young families first will postpone having kids (basically this is something that is happening all around the planet) and then some as a result will not be able to have kids, while others will refuse from this idea at all. And it is not that they do not want to have kids, they do want this: they cannot afford this. Just think how much education costs (while the quality could have been much better!!!). So be ready to face terrible consequences.
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  2. I am pretty happy to read your post :)

  3. Glad you liked it! :)

  4. I think this is the tragedy of modern education that so many genius (but financially poor) students cannot afford it. I think that every educational institute must have special quota for these students so that they can serve the nation after completing their education. I want to share one tip for those students who are worried about writing their essays, dissertations, thesis or any kind of papers. Now they can get essay writing poweredessays services for this and feel free from all worries. If you think you are poor in writing or have massive of writing work then this is the best idea.