In general, police and firefighter budgets move in tandem. Despite decreases in crime, police outlays have increased; despite the number of fires decreasing in most of our cities, fire outlays have increased. Median household incomes and median home prices are positively correlated with police and firefighter salaries and fairly uncorrelated with FTEs. Police salaries have gone up as crime has gone down, and firefighter salaries have increased more in places with larger decreases in fire counts.
Context on Salaries: Wages across all occupations increased 1.9% in real terms from 2001 to 2019 according to the BLS OES. Police wages, from the same survey, increased 9.6% from 2001 to 2019, whereas police salaries (includes overtime and bonuses) for our list of 80 large cities increased 21% from 1999 to 2019. Meanwhile, firefighter wages increased 0.8% from 2001 to 2019, whereas firefighter salaries increased 19% from 1999 to 2019.
The below chart shows the percentage change in real annual median wage/salary from 1999 to 2019 for police officers, firefighters, and the eight occupations police officers are most likely to transition to after policing according to data from Schubert, Stansbury, and Taska (2020) “Monopsony and Outside Options”. Details on the definitions of wages and salaries are below. The most common occupation for police officers to transition to is private security guard, with 9.5% of the transition share.
Note in Definition Differences:
Census of Governments - “Payroll”: : Includes: Salaries, wages, fees or commissions, as well as overtime, premium, and night differential pay; Bonuses and incentive payments that are paid at regular pay periods; Amounts withheld for taxes, employee contributions to retirement systems, etc. Tech Doc.
What we call “salaries” is FTE Payroll / FTE count.
BLS OES - “Wages”:
The following are included in wage: base rates, commissions, COLA, hazard pay, tips. The following are excluded: back pay, bonus, overtime pay, severance pay. Definition
As total municipal outlays increase, police and fire department outlays increase as well. As total municipal outlays increase, FTEs also increase, and police and firefighter salaries increase slightly.
### Per Capita Pct Change
In changes between 2004 and 2019, the relationship between police department outlays and fire department outlays is positive; same for police and fire FTEs and police and fire salaries. In 2019 levels, the relationships are also positive.
In changes between 2004 and 2019, the relationship between the number of fires and total municipal outlays is negative; the relationship between the number of fires and fire department outlays is weakly negative. In 2019 levels, cities with more fires had larger total municipal outlays and fire department outlays.
In changes between 2004 and 2019, the relationship between the number of fires and firefighter FTEs is flat. The relationship between the number of fires and firefighter salaries is slightly negative. In 2019 levels, the relationship between number of fires and firefighter FTEs and salaries is positive.
Crime went down across almost all of our cities between 2004 and 2019. Nonetheless, almost all cities in our sample saw an increase in police outlays. The relationship between crime and police FTEs is slightly positive. The relationship between crime and police salaries is slightly negative: cities that saw less of a decrease in crime saw less of an increase in police salaries. In 2019 levels, cities with more crime have larger police outlays and more police FTEs. In 2019 levels, the relationship between salaries and crime is flat.