Santa Claus would have to spend more than $40 billion a year to deliver $75 worth of gifts to more than 500 million children under age 14 worldwide, writes Jeffrey Ferro, president of Philadelphia-based accounting firm ParenteBeard, in an "audit" of "Santa Inc."
The privately-held enterprise doesn't release basic data. But ParenteBeard estimates a workforce of 50,000 elves, "even with magic."At U.S. Labor Department toy manufacturing workers' average cost of just under $36,000 a year -- that might sound high by world standards, but it implies advanced Western capital-investment levels, plus the shrunken dollar that has made American factories more competivive vs. China -- that works out to a $2 billion yearly payroll, and nearly $800 million in health benefits.
Commercial real estate for all that production would cover close to 9 million square feet. Assuming full ownership and exhausted depreciation, Parente went on to extrapolate electrical-production data for Barrow, Alaska, at 12 cents per kilowatt-hour, extended for the production site, to produce an annual power bill of nearly $100 million. Toy materials and general expenses account for most of the rest of the spending total. (Santa's unpaid work animals -- those reindeer -- would cost a comparativley modest $54,000, total, to feed and stable.)
Julius Green, Parente's nonprofit-practice leader, raised concerns relating to Santa's potential operation "as a private foundation," presumably with a self-perpetuating board. He says the company has to be specially careful to "avoid self-dealing" and mingling Claus family living costs with charitable expenses. Labor agitation, if accomodated too generously, could wreck the budget if it led to higher-than-market wages. "They still have huge risks to consider," Green warned.