May 07, 2006

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Hong Kong's missing children

The SCMP's Sunday magazine leads with an article titled "Million-dollar babies", where Simon Parry and Hazel Knowles "investigate" and find it costs a lot of money to raise kids, ergo to urge to procreate is being superceded by the urge to recreate. The article leads with the staggering estimate reached by Janice and Louis from Tai Tam, that their new baby Luke will cost them HK$11.67 million. This implausibly precise number comes thanks to Louis, a private equities dealer. A man with almost as much time on his hands as bloggers, I would welcome a look at his no doubt comprehensive spreadsheet analysis. Some of the numbers of Luke's cost to age 26:

1. Kindergarten........$252,000
2. Schooling.............$1.8 million
3. Higher education...$3.2 million (overseas, naturally)
4. Food....................$949,650
5. Clothes................$1.87 million
6. Transport.............$438,000
7. Pocket money......$720,000
8. Glasses...............$176,000
9. Dentistry.............$100,000
10. Language/music lessons................$832,000

Why age 26? Apparently that's the cut-off for kids to get on their feet these days. Forget about working part time as Luke studies in high school and uni. His folks have already decided the kid will need specs (I seem to manage with one pair of glasses for 3 years at a time, which makes one wonder what kind of specs they're planning to put on this kid). Lucky Luke will get more in pocket money than most Hong Kongers earn. Assuming Louis and Janice (an MD in an ad agency) have a combined income of $2 million (no doubt a very conservative estimate), they're earning $52 million over the next 26 years to cover this outrageous parasite of a baby.

Later Louis admits they could raise Luke on the cheap, for a total of $2.61 million. That's no doubt the no-private-school, no-pocket-money, one-pair-of-specs, hole-in-shoes, stinky-breath estimate. I wonder if Louis's estimates on his private equity deals vary so much?

The article continues the myth that money is what matters when it comes to having babies. Yet the notion is clearly wrong - poorer countries and poorer people generally have more babies, not less. These "costs" of having kids are often blown out of proportion. In Hong Kong schooling can be almost free or subsidised for the vast majority of residents. The city boasts some excellent tertiary institutions. That's saving you $5 million already. If you want kids, the financial burden is rarely a deciding factor.

What are the more likely factors? Growing wealth means people feel less need to have kids as an insurance policy, to support them in old age. Better health systems means lower infant mortality, so you don't need "strength in numbers". Social mores are changing and the decision to not have kids has become far more accepted than any time in the past. A plethora of distractions and alternatives have made the decision tougher too. Hong Kongers live, on average, in 500 square foot apartments. That's not especially condusive to kids. The city's growing pollution problems are another factor. The list goes on.

The decline in birth rates is happening everywhere. It's not a crisis. Greater immigration is one obvious solution. Better child-care, improving government schools, curbing pollution can all help. Does it really matter to people's well being? If people are feeling better off, then not having a following generation to support them becomes a non-issue. Look at Japan - its population has already started to fall, just as everyone's getting excited about that country's economic recovery. What we need to get used to is nominal growth rates may become static or even decline, but per capita rates continuing to increase. In short, those of us who are left on this good planet will continue to enjoy better living standards. And we won't have to share it with as many people.

Having a child is one of the biggest decisions any couple can make. Governments and do-gooders have no place in the privacy of a couple's bedroom. That includes in the decision to mate. Campaigns to encourage people to have kids are a waste of money. Who's ever heard of someone deciding to have a kid because they saw a Planned Parenthood poster?

My kids enjoy Chicken Little. The birth rate "debate" is a classic example of "the sky is falling" - people assume the decline in birth rates are a bad thing without knowing why. It's a piece of conventional wisdom in the worst sense. It's different to what humanity's been used to, but that doesn't make it bad.

We're just not making kids how we used to. And we're not making parents how we used to, either. Memo for Louis, Janice and Luke - if the high estimate proves to be out, I've got 3.9 kids of my own that are happy to take any leftovers.

posted by Simon on 05.07.06 at 01:37 PM in the Hong Kong people category.


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posted by: boby on 05.08.06 at 03:45 PM [permalink]

A fine analysis, Mr. World.

posted by: fumier on 05.08.06 at 04:35 PM [permalink]

What fumier said, Simon. And as a papa with only one child, I'd say that any potential parential units that try to put a financial price on parenthood aren't fit to breed.

posted by: Justin on 05.08.06 at 06:14 PM [permalink]

Thank you! |

posted by: John on 05.15.06 at 09:19 AM [permalink]

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