Kids’ birthday parties keep getting more extravagant. Here’s how we let it happen.

Kids’ Birthday Parties Have Become Absurdly Extravagant. Here’s How We Let It Happen.

Kids’ Birthday Parties Have Become Absurdly Extravagant. Here’s How We Let It Happen.

Moneybox
Commentary about business and finance.
Jan. 22 2015 2:20 PM

Spoiler Alert

Children’s birthday parties are getting more and more extravagant. Here’s how we let it happen.

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Illustration by Robert Neubecker

The Internet outrage of the week is the tale of 5-year-old British boy Alex Nash, whose dad RSVP’d on his behalf for a pal’s birthday party at a local ski and snow resort, only to discover his son preferred to keep a previously scheduled visit with grandparents instead. As a result, little Alex was a no-show without notice at the celebrations. The furious mom of the birthday celebrant quickly sent the Nash family an invoice for 15.95 pounds—about $24—to cover the cost of his nonappearance.

Helaine Olen Helaine Olen

Helaine Olen is a columnist for Slate and the co-author of The Index Card. She is the host of the Slate Academy series the United States of Debt.

The angry Nashes took their case to social media, and the contretemps quickly went international. At the Nashes’ hometown paper, the Plymouth Herald, 87 percent of readers responding to an online poll said the family should ignore the invoice. At the Chicago Tribune, columnist Eric Zorn sniped that the Nash family should “pay up and pipe down.”

Yet among all the hot takes, no one asked the most important question: Since when do moms and dads host birthday parties for children at ski resorts? And why do we think that’s OK?

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You can blame it on what Cornell University economics professor Robert H. Frank calls an “expenditure cascade.” In short, as people at the top of the income pile spend more on an item, it causes everyone to upgrade their expectations and expenditures. Happy extravagant birthday, kids!

The United States government claims it will cost a middle-income family about $245,000 to raise a child born in 2013 to the age of 18. The cost has increased every year since the start of Great Recession in 2007, even as household income and net worth have either stagnated or fallen for almost all but the wealthiest households.

Experts agree much of the kiddie inflation has to do with the increasing price of child care and housing. But there’s also the fact that the past decade has seen a major increase among the middle and upper-middle classes in the U.S. and Great Britain in what good parents are expected to do—not to mention provide—for their children. The phenomenon of the helicopter parent, the sort of person who accompanies her child on job interviews, is the first thing that comes to mind, but there’s also an industrial-strength class of children’s services. Think music classes for infants, and designer jewelry for tweens.

And then there are birthday parties.

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Once upon a time, back in our childhoods, a few rounds of pin the tail on the donkey and a bunch of balloons and candy were all that was expected of the average parent hosting a child’s birthday party. If a mom wanted to go all out, she skipped the homemade Betty Crocker or Duncan Hines cake, and splurged on a pre-made one from the local bakery instead. As women entered the workforce in the 1970s and 1980s, more reasonably priced storefront birthday businesses also gained acceptance. By 1990, a Chuck E. Cheese’s in Modesto, California, claimed to be hosting 4,000 birthday parties a year for $3.95 or $4.95 per guest, adding up to 25 percent of the outlet’s weekly gross, the Modesto Bee reported at the time.

The birthday-party blitz seems to have really picked up in the 2000s, roughly in tandem with the debut of infant luxury strollers costing four figures. We all know what happened with strollers. Essentially, once upon a time, way back when my older son was born in 1999, a luxury stroller was something that cost about $400. Then the infamous four-figure Bugaboo debuted, and a lot of upper-income families bought the pricy and flashy perambulator. The result? Within a few years, strollers costing $500 or less came to seem like a reasonable, cost-conscious choice.

In recent years, over-the-top children’s birthday events have been highlighted on numerous television programs, including The Real Housewives franchise. There was even a mercifully short-lived reality show on TLC called Outrageous Kid Parties, which featured a $32,000 party for a 6-year-old girl who became upset when she discovered the bird adorning a multitiered cake was purple. She preferred blue.

This sort of stuff makes the Long Island children’s beauty emporium Seriously Spoiled spa and salon, which was recently mentioned in the New York Times, look reasonable. After all, if you can’t afford the Deluxe Indulgence, in which eight children are treated to mani-pedis, not to mention something described as a “decadent milk chocolate facial with fresh cucumbers for the eyes” for the mere price of $719, you can step down to the more pocketbook-friendly Glitter Galore event, where for $395, eight children can enjoy “pink lemonade in fluted glasses” and “hot towel service” while receiving applications of glitter and makeup.

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Need transportation? In Los Angeles, Five Diamonds Limousine will arrange for children to be chauffeured in a Cadillac Escalade limo for $150 an hour, while the more budget-conscious are offered a Cadillac SUV for $65 an hour.

The at-home birthday party isn’t so simple anymore, either. In the New York metropolitan area, you can rent an arcade or disco in a trailer from Arcade 2 Go and its sister company Dance Club 2 Go—which, as owner Owen Soba put it, “allows for no setup, no mess and most importantly, no kids inside your home destroying it.” The arcade costs between $450 and $625 while the disco might set a parent back anywhere between $850 and $1,500, depending on the length of the event and DJ set. Food and drink are not included.

True, for most of us, birthdays aren’t so lavish. The Plymouth Ski and Snowboard Centre, which hosted the party young Master Nash skipped, offers parties featuring snow tubing, tobogganing, snowboarding, and skiing beginning at 13.95 pounds—that’s $21—per attendee. (There is also a birthday meal including something called “unlimited squash,” which sounds to American ears like something no child has ever requested, but is actually a Britishism for fruit drinks.)

But the birthday party ante is always increasing. Gillian Marriott, the owner of Sweet Cheek’s Cakery in Cañon City, Colorado, told me that in the past two years, she’s seen parents go from spending $15 to $20 on a simple basic birthday cake to $60 to $80 on stacked and tiered cakes. “I have the biggest demand for first birthday cakes that are larger than life,” she said.

Taken all together, it adds up to a big business. Last year, British online investment service Nutmeg conducted a survey and discovered that British parents spent an average of 191 pounds—that’s $289—per children’s birthday party. Cussons Mum and Me, a luxury brand of infant bath products, found that 20 percent of British parents copped to spending at least $60 on the party-favor bag alone. In the U.S., GigMasters.com, a website that helps people connect with vendors for their parties, found that 7 out of 10 moms and dads were spending more than $300 on their child’s birthday celebration in 2013, with slightly more than 1 in 7 admitting to running up a tab of $1,000 on the big day. The International Association of Amusement Parks and Attractions says the average revenue for hosting a child’s birthday party is $370.

People spend. Then other people spend more. So more people spend even more. That’s how an expenditure cascade works. As our economic winners spend ever-larger amounts of money on their children, the standards increase for everyone, even those falling behind.

No one wants to be seen as a cheapskate on his or her child’s special day, after all.