Wednesday, July 11, 2012

Perhaps Doctors, Lawyers, and PhD's Should Look Into Fighting Fires (bravely and nobly)

I respect firefighters and police officers.  But paying them the salary of a CEO is backfiring in California.  See this article, this article, and this article.

More.   More.  More.  More.  More.  And, by far the most important HERE!!!!!!!!!!

Here's an excerpt from the last by Steven Greenhut in the Wall Street Journal:
The study also found that lavish pay and benefit packages were a root cause of the city's problems. In Vallejo compensation packages for police captains top $300,000 a year and average $171,000 a year for firefighters. Regular public employees in the city can retire at age 55 with 81% of their final year's pay guaranteed. Police and fire officials can retire at age 50 with a pension that pays them 90% of their final year's salary every year for life and the lives of their spouses.


We could argue that firefighters and police officers are worth every penny they pay, or every raise they give themselves.  But, when a given city is paying up to 75% of its income on public servants, then very quickly that city finds itself near bankruptcy.

What is the answer?  Pay them according to their level of productivity.  Would this work?  What exactly do they produce?  Public safety is somewhat intangible (however it becomes real when your house is on fire or you're getting regulated upon).

Paying police officers and firefighters less is unpalatable to members of either political party.  I imagine there will be many more bankruptcies before a politician works up the courage to make the suggestion.

18 comments:

Anonymous said...

Which firefighters are getting paid CEO salaries? Every firefighter I know works at least two jobs to make ends meet.

And just "spraying water?!" Do you have any idea what being a firefighter entails?

I would think that you would do a little more research before trivializing and downplaying one of the most dangerous and important jobs out there. I bet you'll change your mind if you ever need them.

Jasmine Byrd said...

I agree with the opinion that there will be more bankruptcies before anything is done about the outrageous wages cities are paying their policemen and firemen. Don't get me wrong, I very much appreciate them. However, if they are getting paid as much as someone with a higher level education then something isn't adding up. Yes, they do deserve a higher salary than the average joe worker but not a such outrageous amount that it rivals CEOs of companies with a college education.

Jake Pearson said...

Could not get the link for the article to open up.

Obviously, a firefighter nor police officer should make the same amount of money as a doctor, lawyer, or PhD. Doctors and lawyers take a risk in investing in expensive higher education costs to become qualified in their feilds and each requires a certain set of skills. To become a firefighter or policemen the financial risk to obtain that position is obviously less and is a job that many could probably fill.

Being from California, the welfare spending has to stop. The welfare programs recieve so much funding due to the great disparity between rich and poor. Unfortunately, the state has adopted the idea that everybody takes care of everybody, which has led to cities going bankrupt. I don't know exactly the correct answer when it comes to workers salaries, but due to the high amount of crime as well as high risk of wildfire that has been seen in California, there is high demand to fill these jobs.

Michael Garrison said...

Anonymous: Some CEO's get paid below 500k/year and some firefighters (granted the older ones) pay themselves very near this figure for the last two years before retirement in order to collect higher retirement salaries.

I understand that firefighting requires a certain skill set and the willingness to combat fires when they arise.

But the subject of the post is worker productivity and whether it can be measured. As someone who is studying economics, it is necessary for you to put aside your emotions and evaluate worker salaries as a function of their productivity. If there is a high discrepancy between pay and productivity, then the source of the discrepancy is something we should be aware of whether it be public policy, union power, or some thing else.

Please identify yourself in future posts.

Michael Garrison said...

Jake: I like your approach. The human capital investment for firefighters and police officers doesn't approach the level of a doctor/lawyer/phd.

But, you are right to point out that increased salaries and benefits may be necessary to attract the right amount of recruits needed to adequately fight crime or control fires.

The other side of that increased demand is that municipalities/counties/states/etc will have to find the financing required to meet those payments. Which brings us back to square one.

Kelby Moss said...

I agree that the fire and police departments are getting paid to much thats why all the trouble in that state. I dont know what the answer is all I know is they dont make nowhere near that much here.

Michael Garrison said...

Kelby: Agreed. Only a few states are near a fiscal cliff. It will be interesting to see the oncoming spate of bankruptcies in CA, PA, and other places.

Some states probably underpay police and fire. But...not CA it seems.

Matt Freeman said...

These cities in California are at their own fault for having to file bankruptcy. As one of the articles stated, 75% of Vallejo's revenue had to be used to pay city officials which then caused them to not be able to pay their other bills. I think you hit the nail on the head MR. Garrison when you said that firefighters and other city officials, while we all respect and admire the sacrifices they make for us, do not deserve the same salary as a CEO or someone of that nature. Ultimately what it boils down too, just as the situation in Greece, is greed is the root of all evil.

Isabel said...

I find that the amount of public spending on firefighters is outrageous. I understand that they do risk their lives and that is something that is difficult to measure in how much money they should receive for their sacrifice, but that does not mean that a firefighter should receive such huge salaries. Nothing will be done until more cities declare bankruptcy because no one wants to be the bad guy and say that they should cut the salaries of people who risk their lives everyday. Nevertheless, it will be something that they will have to do. I think that they should receive a good salarie, but not one that matches that of a CEO.

Ian Littlejohn said...

Even though iam nowhere near an expert at talking about economics i do respect what firefighters and police officers do for our country they give there lives almost everyday and the price of someones life is priceless. However i don't feel like they should be paid as much they do if i would have known how much they got paid i would've just went to school for fire protection and became a firefighter so i agree with Jake about how higher salaries help bring more recruits to be firefighters and police officers

Trent Renshaw said...

The bankruptcies are inevitable. Its to late for the cities that are being referred. The budget simply must be restructured. If your city is going bankrupt because you paying your city officials to much then you have to either pay them less or pay fewer of them and cut jobs.

Cory Nissen said...

Firefighters and police officers have important jobs, seeing as how they risk their lives to provide safety and security for us. Having said that, there is no reason they should be earning 75% of a city's revenue. It will be interesting to see how the other cities that are overpaying them will handle it, now that they have seen what it can do to their cities economies.

James Davies said...

I understand the cost of living in California is much more. But does working 121 days a year(24 on 48 off) really constitute such a large salary? The average year has 250 business days. These guys are working less than half. Surely that means they are only part time employees and need to be paid as such or they can find time to work shifts. I have two good friends that are firefighters, and I spent a semester as a volunteer in a small farming community. Firefighters are absolutely needed. But sure not for this pay rate. As Unions seem to destroy the labor market, cities are going bankrupt. Hopefully firefighters can step up their working days number, or take a pay cut. Either way there are plenty of people out there that would risk their lives to put out a fire for lesser pay. Lets get them into the rotation.

Mackenzie said...

First let me say that I have a family member who is a Public Service officer, so I definitely have an understanding of how important they are to our communities.

That said, I also do believe that once any certain job (whatever it may be) is consuming or rather getting paid more money than the service they are providing it causes trouble for the local economy.And yes, it is very hard to put a priced value on what these men and women are providing; Offer too little and no one will be there the next time you overcook sunday lunch... pay too much and the economy is damaged.

All in all, I think this is a very difficult decision, and it's not one I could make.

Mason Jones said...

That is ridicules. Firemen do not have to go to college. They have very few marketable skills that could be used to transfer to any other proffesion. I do think what they do is important and should be treated as such. However, they "work for twenty-four hours, and get forty-eightt off. To start with the twenty-four that they work is not working the whole time. Then they get forty-eight hours that they can work if they feel like they want more money. There is such a large group of people wanting to be firemen because because it's an easier job than factory work and takes about the same education as being a machinist.

Pars Tornakian said...

I think they do deserve every penny of it since they are risking their lives and instead of cutting their pay, state officials should think about ways to raise money to afford paying them (more taxes maybe).

Eid Alkhaldi said...

I believe strongly that govrnment spending should be minimized to the most effiecent amount of money. I think that firefighters and other governmental workers should not be paid as much salary as in California. If governmental workers are paid more than the eq wage, that is a deadwieght loss, and everyone is paying for that. I believe they should be paid just enough to keep them interested in the job.

Nick Goldman said...

It is very hard to give a monetary value to firefighters and police officers since they are high-risk professions. However, you cannot allow an entire city to become bankrupt in order to pay the salaries of a small percentage of the city workforce. Of course the firefighters getting paid these salaries most likely will not want to give those up but policy makers need to correct this so the other cities can take note. This needs to be taken care of quickly so cities in similar situations can avoid bankruptcy.