Contents of PresentationTime series of private and public police employment, GDP, wages, and crimeDemand for private securityThe highly competitive nature of private security industryDifferences between public and private policingCase study of response to burglar alarms Future of private polic
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1. Private Policing & Crime: Experiences, Evaluation, and Future Direction
Drs. Simon Hakim and Erwin A. Blackstone
Center for Competitive Government
Department of Economics
2. Contents of Presentation
Time series of private and public police employment, GDP, wages, and crime
Demand for private security
The highly competitive nature of private security industry
Differences between public and private policing
Case study of response to burglar alarms
Future of private policing
Recommendations for industry and government
3. Source: BLS National Occupational Employment and Wage Estimates for 1997 through 2007. 3
4. Source: BLS National Occupational Employment and Wage Estimates for 1997 through 2007. 4
5. Source: BLS National Occupational Employment and Wage Estimates for 1997 through 2007. 5
6. Source: BLS National Occupational Employment and Wage Estimates for 1997 through 2007. 6
7. Source: U.S. Bureau of Census Annual Survey of State and Local Finance 7
8. Source: BLS National Occupational Employment and Wage Estimates for 1997 through 2007. 8
9. Source: BLS National Occupational Employment and Wage Estimates for 1997 through 2007. 9
10. Source: BLS National Occupational Employment and Wage Estimates for 1997 through 2007 and www.disastercenter.com/crime/uscrime.htm 10
11. Major Findings from Figures Private security is growing more rapidly than both total (50%) and public police (constant) employment.
Private police wages grew slightly less than both total and public wages.
Private police employment is related to GDP while public police are not.
No relation of private or public police employment to both property and violent crime levels.
Expenditures on public police are a constant 3.4 percent of all state and local expenditures.
Public police wages are consistently 2.15 times private police. 11
12. Demand for Private Security GDP. Reflects income effect of producers and higher income groups
Excess demand placed on public police. 911 calls, terrorism, more frequent natural disasters, new types of crime
Privatization. Reflects general trend, tighter state & local budgets. Shedding non-public services and contracting out (quantifiable outputs)
Liability. Premises and inadequate security. Benchmarking, beyond perimeters, large possible judgments (vulnerability in hotels, hospitals)
Regulation. Universities (The Cleary Act publication of crime data , hospitals (Accreditation), chemical plants (DHS), nuclear (DOE, armed guards), Defense contractors (DOD).
Concern about negative publicity (reduces customers demand, higher wages for workers, liability suits) 12
13. Highly Competitive Industry Concentration is moderate and increasing modestly (50%). Like movie production & distribution, less than soft drinks, and candy.
Low barriers to entry. Relies mainly on unskilled labor, low initial investment, no regulatory barriers (training requirements are modest)
Companies can and do provide their own security
Individual negotiations on contracts encourages competitive pricing. 13
14. Differences Between Public & Private Policing Objectives and behavior: Private services clients. Police serve the community. Hence, private deters crime while public emphasizes arrest & assisting in punishment. Private concentrates on surveillance (cameras, access control. Target hardening and encourage displacement)
Legal: Private police derive authority from client (agent). Citizens arrest (higher corporate & individual liability especially for armed officers). Public police enjoy legal authority & greater liability protection. Public unlike private police do not have to retreat (avoid) use of weapons. Private police are not bound by constitutional restrictions (warning before interrogation) 14
15. Differences between Public & Private Policing Cost: Private guards 47% of sworn officers. Differences in training, bureaucratic monopoly public vs. competitive private police (unions, public police salary demands are unbound by competitive service prices)
Public police provide standardized service less constrained by changing market demand. Private police strive to serve new niche markets. Private police hire lawyers, accountants and IT professionals as needs arise. Public police constrained by civil service rules train sworn officers for such uses.
Private police blend into IT, and customer service while public police are more rigid to change.
16. Differences between Public & Private Policing Abuse of citizens: Private police are less likely to abuse since market forces are strong. Private police can be fired more easily than a sworn officer.
17. Case Study: Burglar Alarms Problem: 10-20% of all police calls and responses are for burglar alarms. 94-99 are false. Total cost to police was $1.8 billion in 2000. If the problem is resolved then 35,000 sworn officers could be used for other services
Alarms are ineffective since police set low priority for response. However, any responses still preclude provision of other service to the community.
False response is a private service. Response to an actual/attempted burglary is a public service because of reducing the pool of burglars and punishing offenders
Public police respond using 2 officers and often an additional sergeant while almost all cases are false 17
18. Case Study: Burglar Alarms Solution: Verified Response. Private security, an agent of the owner or cameras are used for initial response. Public police are dispatched at a high priority when a burglary occurs. With the decline in response to false burglar alarms, police are able to have faster response to other calls.
19. Future of Private Policing Private police will expand above and below the standardized service provided by public police.
From below, private police will expand in guarding activities and especially in the growing industries like universities, hospitals, chemical and other critical infrastructures. Guard wages and prices of services are unlikely to rise much because of competitive low skilled labor market and the industry.
Private police will expand by blending into non-security services enjoying economies of scope. For example, alarm response, patrol and vacation services.
From above, private police will provide high quality IT and financial related services that require highly professional workers. Public police can only train officers for these tasks because of wage restrictions. 19
20. Future of Private Policing Public police will continue to shed non-public services and contract out quantifiable public services. Tight budgets will encourage shedding and contracting out.
Hospitals, universities, FedEx, Longwood Security formed sworn officer services in order to provide greater arrest and investigation authority. This is, however, a limited trend.
Competitiveness of the industry will ensure that security firms will tap every niche market.
Competition force firms continue to employ technology intensively in order to deliver service cheaply, effectively, and reduce number of guards. Monopolistic public police have less incentive to introduce technology. 20
21. Recommendations Industry: Establish expertise in a particular industry or security focus. Examples, Akal guarding military installations, Wackenhut securing nuclear facilities, Securitas-universities, Allied/Barton- shopping centers.
Government: The highly competitive nature of the industry makes even the existing loose background and training requirements unimportant. Additional regulation is unnecessary. Exception may be for weapon training because of externalities. 21