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Free the Fire Stations!

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Many boys, at one time or another when they are growing up, become enamored with firetrucks after taking a school field trip to their local fire station. Some of them will then insist that they want to be firemen when then grow up. They want such an occupation because of the excitement and the adventure they envision — and, of course, the chance to ride on one of the shiny red firetrucks. The pay and benefits of a firefighter are of no consequence to them at their young age. Although the interest in becoming a fireman usually wanes, some boys do in fact become firemen when they grow up, as a visit to one’s local fire station will attest. In adulthood, however, pay and benefits no longer take a back seat to excitement and adventure. Mortgage and car payments have to be made, electric and water bills are due every month, and the kids are always needing new shoes.

Firefighting is not generally considered to be a high-paying job. According to annual reports by Forbes, Business Insider, and CNBC, using data drawn from places such as LinkedIn and the Bureau of Labor Statistics, the top-paying occupations in the United States are regularly said to be held by pharmacists, podiatrists, attorneys, engineers, dentists, physicians, surgeons, psychiatrists, orthodontists, anesthesiologists, radiologists, pathologists, and upper-level managers and directors.

According to Salary.com, the median annual firefighter salary, as of April 2017, is $44,770, with a range usually between $33,578 and $55,963. That does not include “bonus and benefit information and other factors that impact base pay.” In states such as California, median salaries are generally higher. And even then, it depends on the city. For example, the median annual firefighter salary in Los Angeles is $49,490, with a range usually between $37,118 and $61,863. Again, that does not include “bonus and benefit information and other factors that impact base pay.” Thanks to an abundance of overtime pay opportunities, some firefighters in Los Angeles make significantly more.

Chief Donn

According to Transparent California, a watchdog project of the Nevada Policy Research Institute, a free-market think tank, there are thirty employees of the Los Angeles Fire Department (LAFD) who made more than $315,000 in base pay plus overtime last year. But three Los Angeles firemen — Charles Ferrari, James Vlach, and Donn Thompson — each made more than $300,000 just in overtime pay last year. Total pay and benefits in 2016 were more than $483,000 for Ferrari and Vlach and more than $439,000 for Thompson. But it is Thompson who may be the most well-paid firefighter, not only in Los Angeles, but in the entire United States.

As reported on Reason’s “Hit and Run” blog, in a 1996 Los Angeles Times story, Thompson was highlighted as a prime example of what the newspaper called “paycheck generosity” at the LAFD. It turns out that from 1993 through 1995, Thompson had made $219,649 in overtime pay at a time when the LAFD was spending more than $58 million annually on overtime pay. The newspaper reported that this “budget-wrenching” amount far surpassed what fire departments in other big cities were paying. So well-known was the LAFD’s reputation for paycheck generosity that one Houston fire official commented, “We’ve all heard about what they have going there. I don’t know of any other department that has it quite that lucrative.” What the Los Angeles Times found just as surprising as the amount of overtime pay was that most of the money spent was not spent dealing with fires or other emergencies. Most of the overtime pay was for firefighters to replace “those who are out because of vacations, holidays, injuries, training, illnesses or personal leaves” or “to firefighters on special assignments, such as in-house training and evaluation programs.”

In 2009, it was reported by the Los Angeles Daily News that the LAFD’s overtime budget had “soared 60 percent over the last decade while its ranks grew just 17 percent.” The newspaper’s analysis found that Los Angeles firefighters averaged “six times more overtime than their counterparts in Chicago, five times more than in Houston and two times more than in San Diego.” Fifty-six firefighters “earned at least $100,000 in overtime on top of their annual salaries.” This 2009 newspaper article also singled out Donn Thompson as the king of overtime earners. He had pocketed $570,276 in overtime over the previous three years.

In 2016, the San Diego Union-Tribune featured Thompson in a story about runaway overtime costs at California fire departments. According to Transparent California, he received overtime pay of $286,536 in 2014 and $286,733 in 2015. Thompson, a fireman for 34 years, said that he “never spent that much time at home,” and “basically lived at the fire station.”

Last year there were 439 LAFD employees who made more than $100,000 in overtime. Thompson pocketed $307,541 from California taxpayers. The LAFD spent more than 38 percent of its budget on overtime pay. In contrast, New York reported spending less than 20 percent, and other major fire departments reported even lower percentages.

Privatization

The millions of American workers who don’t have any overtime opportunities, don’t always work 40 hours in a week, live paycheck to paycheck, and struggle to make ends meet undoubtedly view the paychecks of these California firefighters to be obscene. Even doctors, lawyers, and managers who make six-figure incomes might be inclined to agree — especially when, according to the Bureau of Labor Statistics, the occupations of loggers, fishermen, roofers, garbage collectors, miners, truck drivers, construction laborers, electrical workers, pilots, and taxi drivers are much more dangerous than that of a firefighter.

When things such as the huge paychecks of LAFD firefighters are brought to light, there is always talk about the need to reform the system, reduce government bureaucracy, have more effective management, curtail the power of the unions that represent government workers, and make municipal governments more accountable to the taxpayers. Sometimes the privatization of fire departments is even suggested. This entails the shifting of functions and responsibilities from the public sector to the private sector. There are two forms of privatization that need to be distinguished: public-private partnerships and free-market competition.

In a public-private partnership, government entities contract out the provision of some service such as maintenance, facility management, or garbage collection. Study after study has documented the cost savings to municipalities achieved through this practice. Over the past few decades, more and more state and local governments have privatized certain “public services.” Opening up the provision of a service to competitive bidding allows a government to secure the performance and cost-saving benefits that come with competition. Privatization allows government entities to control costs without sacrificing quality. In many cases, quality is even improved because companies want to ensure that their government contract is renewed. Yet, as pointed out in a Reason Foundation report, “Fire Protection Privatization: A Cost-Effective Approach to Public Safety,” “For the most part, however, there has been no shift toward private contracting of fire service in cities with well-established municipal fire departments. The fire service is one of the most tradition-minded of all public services. It is also heavily unionized, and fire-fighters’ unions have strongly resisted attempts to contract out existing fire department services to private firms.”

There is, of course, one glaring problem with privatization by means of public-private partnerships: services are still publicly funded by tax dollars. Those using services the most might actually be paying the least or not at all. Some people end up paying for services that they never use. And no one has the option to change to a different service provider.

With free-market competition, no government at any level has anything to do with providing a “public service.” No contracting, no funding, no oversight, no interference, no regulation, and no control. Many firms have a chance to provide services. Firms compete with one another for customers on the basis of price, quality, customer service, and the range of services offered. Prices for services are set freely by the forces of supply and demand. Customers choose what services they want to pay for. Prices are allowed to adjust according to economic conditions. New firms can freely enter the marketplace. Customers have a choice in what firm they want to purchase a service from. Firms that cannot compete or fail to meet the needs of their customers go out of business. No one firm has a monopoly on providing a service.

Fire stations need to be freed from government funding and control and be treated just like any other business. But high salaries, generous benefits, lots of overtime, and firefighter unions are not the reasons why. In fact, even with free-market competition, firefighters may earn high salaries, receive generous benefits, have lots of overtime, and belong to unions.

History, facts, and figures

As relayed by Annelise Graebner Anderson in an article in the Journal of Libertarian Studies (“The Development of Municipal Fire Departments in the United States”),
“In 1852 not one city in the United States paid its firemen; they were all volunteers. By 1880 most of the cities with more than 10,000 people — and many with fewer— had municipally paid fire departments.”

The first volunteer fire company was organized by Benjamin Franklin in Philadelphia in 1736. By 1752, Philadelphia had six volunteer fire companies and eight fire engines. Many leading citizens belonged to these fire companies, as was the case with social organizations. The fire companies were extremely competitive. Each fire was a contest to see whose engine would arrive first and pump water most efficiently. The volunteer companies, which were not profit-making enterprises, had several sources of financing: “contributions from grateful persons on whose property the company had put out a fire; donations from citizens; funds from benefits given by the volunteer firemen; contributions, dues, and fines of members; the city government; and the fire insurance companies.” In time, however, “many cities gained considerable control over the volunteer fire companies, and often paid the chief engineer whom the volunteers elected and perhaps a few other full-time people.” The country’s first paid fire department was established in Cincinnati 1853. Within twenty years, Providence, St. Louis, New Orleans, Louisville, Chicago, Boston, Baltimore, San Francisco, New York, Pittsburgh, and Philadelphia were all staffed by career firefighters.

Anderson concludes that “the steam fire engine, the telegraph alarm and potential insurance rate reductions resulting from lower losses probably led to a significant increase in the attractiveness of fire protection provided by a paid department.” She asserts that “government activity in the area of fire-fighting and in related areas was inimical to the development of private enterprise.” Gradually, “fire prevention and fire protection were accepted as proper functions of a municipal government.” And so they are today.

According to the U.S. Fire Administration (an entity of FEMA),

  • There are 27,211 fire departments listed with the National Fire Department Registry. That is about 91 percent of all U.S. fire departments.
  • Registered fire departments represent approximately 50,908 fire stations across the country.
  • Ninety-six percent of the registered departments are local fire departments which include career, combination, and volunteer fire departments and fire districts.
  • Four percent of the registered departments are state and federal government fire departments, contract fire departments, private or industrial fire brigades, and transportation authority or airport fire departments.

Of the registered fire departments, 9 percent are career (all firefighters are career), 5 percent are mostly career (more than 50 percent of firefighters are career), 16 percent are mostly volunteer (more than 50 percent of firefighters are volunteers), and 71 percent are volunteer (all firefighters are volunteers).

It is a myth that volunteer fire departments don’t receive tax money and don’t pay their firefighters anything. Some, of course, don’t. But others are financially supported by local taxes in addition to fundraising, private donations, corporate donations, and federal grants. And some reimburse their firefighters for expenses, give them a small stipend, pay them on a per-call basis, or provide free training and certification.

Private fire departments are few in number, but they do exist. According to a report by industry research firm IBISWorld,

The Private Firefighting Services industry includes privately operated companies that charge a subscription fee to homeowners and business owners to provide fire prevention and suppression services. In addition, companies provide fire-protection services to airports and industrial facilities on a contract basis or are employed by insurance companies or government agencies. Over the past five years, the number of private sector firefighters has grown at an average annual rate of 15.0% to an estimated 16,880 employees.

The Private Firefighting Services industry is expected to continue expanding, with industry revenue projected to rise through 2017. Continued state and local budget shortfalls are anticipated to lead to greater outsourcing to the private sector. Moreover, insurance companies offering private firefighting services to homeowners in the West and Southwest regions will be a continued source of growth for the industry over the coming five years.

The National Wildfire Suppression Association (NWSA) represents more than 150 private-sector contract companies in 16 states.

Observations

There is absolutely no reason why the provision of firefighting services cannot be handled by the free market.

First of all, according to the National Fire Protection Association (NFPA), of the 33,602,500 calls to fire departments for service in 2015, 2,533,500 were false alarms, 21,500,000 were for medical help, and only 1,345,000 were for actual fires. The provision of emergency services should be separate from the provision of firefighting services. And as Ryan McMaken of the Mises Institute points out, “An enormous number of firefighters could be replaced by paramedics — using much less-expensive vehicles — and no one would notice.

Second, although firefighting is an “essential service,” that doesn’t mean that it has to be supplied by government. Hospitals provide an essential service, but they are privately owned. Doctors provide an essential service, but they don’t work for the government. In many large cities, taxi companies supply an essential service, but they are not owned by governments. The provision of food is certainly one of the most essential services throughout the United States since only a very small percentage of Americans are farmers. Yet the provision of food is entirely left up to grocery stores competing with one another for customers on the free market.

Third, the fact that 71 percent of all fire departments are already staffed entirely by volunteers clearly demonstrates that government firefighters do not need to staff fire stations.

Fourth, it would not be redundant to have more than one fire department in a city or town any more than it is redundant to have more than one gas station, restaurant, clothing store, strip mall, barbershop, grocery store, nail saloon, bar, or movie theater.

Fifth, competition among firms is necessary to ensure low-cost quality services for consumers. By nature, a government monopoly does just the opposite.

Sixth, it is because of government that Americans don’t have private firefighting services, not because of market failure. Government interference always distorts the market.

Seventh, it is not the purpose of government to provide services. Libertarians alone consistently maintain that if we are to have a government, its role should be strictly limited to the protection of life, liberty, and property from the violence and fraud of others.

Eighth, if the government is to provide firefighting services, then where does it end? Once firefighting is accepted as a proper function of government, what logical argument can then be made against the government’s providing pest-control services, lawn-mowing services, hair-cutting services, eye-exam services, house-painting services, accounting services, banking services, nanny services, insurance services, or travel-agent services?

Ninth, putting out fires is a job — just as digging ditches, mining coal, selling cars, editing magazines, mowing lawns, managing a company, truck driving, writing books, running a cash register, and waiting tables are jobs. There is nothing special about firefighting. Yet, government firefighters are regularly held up as heroes just for doing their jobs.

And tenth, to say that the private funding and private provision of firefighting services “just won’t work” simply manifests the statist thinking and anti-market bias that is all too prevalent in American society. It “works” for a host of other services that Americans use every day and wouldn’t begin to think that the government should provide.

The fire stations in the United States should be freed from government funding and control as a matter of principle. To focus only on firefighter salaries, benefits, overtime, and union membership is to miss the big picture — that of service provision in a free society. These things may be important from the standpoint of how taxpayer dollars are used, but they are not sufficient in and of themselves to prove that fire stations should be free. That is the same mistake conservatives make when they call for the elimination of some government funding, program, or agency because it has a liberal bias, funds pornographic art, is inefficient, performs abortions, has a lot of waste and fraud, or is too intrusive, instead of arguing that it shouldn’t exist in the first place.

This article was originally published in the August 2017 edition of Future of Freedom.

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