How much would somebody have to pay you to run into a chemical inferno? To stand down a gun-wielding criminal? To infiltrate a drug gang? If I was going to write an article about the compensation for firefighters and police officers, I might ask those questions and dwell on them for a while. Daniel Foster, writing in National Review, opts for a different approach.
In an article about government budgets and public employee compensation, he suggests that first responders are seriously overpaid--and that this is a result, primarily, of their ability to collectively bargain and to play upon either the fears or heart-strings of voters. Cash-strapped local and state governments are trying to reduce compensation for first-responders, Foster explains, but “the the fuzz aren’t taking it lying down.” In Bay City, Michigan, for example, a police union threatened with layoffs has taken out billboards warning layoffs might expose people to all sorts of violent crime.
Maybe I've misinterpreted his argument, but he seems to be suggesting that the sympathy for, and solidarity with, first-responders is largely misplaced. “We must take care that public-safety workers are not allowed to hide behind the badge,” Foster warns. And his solution? Ban collective bargaining for public employees and, in the short term, get unions to accept reductions in compensation.
Actually, on that last argument, I would agree in part. As I noted when I wrote on this subject a few weeks ago--and my friend Harold Pollack rightly emphasized in his followup--the budget situation for most cities and states is truly dire right now. Whether or not reducing pay of first-responders is the right thing to do, it may be the necessary thing to do. Local and state governments simply don’t have the money the need to meet their immediate needs and, in the long term, they haven’t planned adequately for future obligations in the form of retiree health benefits and pensions. Precisely because public safety is so important, across-the-board reductions in compensation will frequently make more sense than layoffs. Unions that refuse to consider that possibility do their members, and their communities, a disservice.
I also think there are elements of truth in Foster’s broader critique. Police and firefighter unions have a lot of power. Like any other organized political group, they exploit emotions when they can. Sometimes individuals, locals, and larger union organizations use those advantages to secure excessive compensation or even to commit outright fraud.
But Foster suggests those stories are the rule, that over-compensation is systemic, and, most important, that this is a product primarily of skewed bargaining power and emotional lapses of reason. Here I think his argument gets shaky.
Foster states that public sector employees make 34 percent more than comparable private sector employees. But that figure is highly suspect and has been the subject of very public scrutiny for a while. Studies that adjust for age and education level suggest government workers don’t make more money; some studies even show they make less. The picture depends in part on how you calculate benefits, but my understanding is that even a more conservative accounting doesn’t come up with a gap of 34 percent.
Foster singles out statistics from Oakland, California, to make his point. There, he says, average total compensation for an officer is $162,000 a year, while the median family earns $47,000. But that’s also a misleading comparison, for reasons Tim Fernholz explains at TAPPED:
To be more specific, Foster writes that "average total compensation for an officer in Oakland --a city in which the median family earns $47,000--is $162,000 per year." But there's a difference between total compensation and income--the former includes benefits. Assuming 70 percent of that is salary--which is high, since as we'll see, local officials tend to back-load compensation to make their budgets look stronger--a better, if very rough, comparison is the median income plus hypothetical benefits of $67,000 to $162,000. That's still a big difference, but when you factor in that the average officer pay will skew a small sample higher due to a few highly paid police department executives--and that being a police officer requires special skills and training, terrible hours, and dangerous duties--it seems much less outrageous.
Several readers at The Daily Dish, which highlighted Foster's article, wrote in with similar observations. One of them seems to be a particularly reliable source:
I am an actuary in the pension field, so I think it's fair to say I know more about pension accounting than most people. Lately it has become fairly popular to blame public pensions for most if not all of state and local fiscal problems, rather than the criminal financial management of those pensions by state officials. When a politician decides to cut taxes by ending all contributions to the state pension fund, and then 20 years later the pension is only 20% funded, this makes the pension fund look like it's costing the state lots and lots of money, when what really happened is that the state started borrowing money from the pension fund and now has to pay it back. Meanwhile, the lack of return on assets (which is supposed to counterbalance the service and interest costs associated with pension plans) makes the accounting "cost" of a pension much higher than the actual value of the pension benefits.
So the 162,000 figure includes the "cost" of a police officer pension, which is too high, and is being compared to the median salary/wages of the median family (i.e., a number that doesn't include the cost of pensions). This isn't comparing apples and oranges as much as it is comparing apples and filet mignon--they're not even in the same category.
I agree with all of that. But let's take this in a different direction.
The Bay Area is an expensive place to live. And professionals who work there are compensated accordingly. If you’re a doctor or lawyer, or if you’ve had some success in the financial industry, you probably make a lot more than $162,000 a year in wages and benefits. But when most of those people show up for work, they're not putting their lives at risk or subjecting their bodies to repeated abuse. More broadly, I’d argue that well-paid professionals provide less social value than first-responders, although that’s a more complicated subject on which, I imagine, somebody like Foster and I probably have larger philosophical disagreements. (OK, maybe not about the lawyers.)
I realize that, as a general rule, our economy doesn’t do a good job of matching compensation and social value. If it did, teachers and nursing home workers would make a lot more. But that gets back to my original question. Is that a good thing? I don’t think so. And if first-responders are the relative exception to that rule--i.e., if they have compensation closer to our best paid professionals--I really don’t mind at all.
You--er, we--do have to pay those salaries. In other words, high compensation creates real budget problems. In the short term, again, we may have to reduce what first-responders get. But in the long term, I'd prefer to find ways of compensating them well, even if that means finding revenue to cover the cost and even if that means raising some taxes.
No, the idea of paying the government more money doesn't thrill me. But, then, neither does the idea of running into a burning building.