The Economics of Everyday Things - 58. Firefighters

Episode Date: August 5, 2024

There are more firefighters than ever — and fewer fires for them to fight. So the job has changed. Zachary Crockett slides down the pole. SOURCES:Joshua Hurwitz, lecturer in economics at Tufts University.Eric Mackintosh, administrative battalion fire chief for San Mateo Consolidated Fire Department.Steve Pegram, retired fire chief and township administrator in Ohio. RESOURCES:"The Dire Shortage of Volunteer Firefighters in the US," by Sam Becker (BBC, 2024).San Mateo Consolidated Fire Department 2023 Annual Report (2024)."Essays on the Economics of U.S. Firefighting," by Joshua Hurwitz (Harvard University doctoral dissertation, 2021)."Over Last 20 Years, Annual Fires in the US Declined by About 50% While Career Firefighters Increased More Than 50%?" by Mark J. Perry (AEIdeas, 2015). EXTRAS:"Getting Old, Adventurously," by People I (Mostly) Admire (2024).

Eric McIntosh still has vivid memories of a particularly nasty fire that he fought 20 years ago. It was inside a country store in the coastal town of Half Moon Bay, California. It was the hottest fire I'd been in. My helmet melted and I remember cans just exploding, canned foods, and thinking, man, what is happening in here? Just everywhere. It sounded like a war zone in there.

We actually pulled people out pretty early in that fire because there was a collapse, and then it became a defensive fire. So at that point, it's setting up our big water cannons that put out a thousand gallons a minute. The fire raged on for four hours and it took nearly a hundred firefighters and 25 trucks and engines to put it out. The entire two-story structure eventually burned to the ground. It left nothing but the charred remnants of canned goods and cowboy boots. But thanks

to McIntosh and his fellow firefighters, no one was hurt. And despite the heat and the danger, McIntosh says there's something he loved about the experience. The adrenaline's rolling, your training that you've worked so hard for, you were able to put into play. You know, you hate to say it, but you feel great. But then, of course, the adrenaline fades and just exhaustion. This is the storybook version of firefighting. Brave heroes battling infernos and saving lives. In reality, feats like that are increasingly rare. Thanks to safety regulations and new technologies, there are fewer fires than ever.

But the number of salaried firefighters keeps growing. And that has a lot to do with the changing nature of the job. Overall fire departments are busier than ever, but the distribution of call types has changed. So, whereas fire incidents fell by more than 40% in three decades, the volume of EMS responses exploded by nearly 250%. For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Crockett. Today, Firefighters. Fighting fires used to be the general public's responsibility. During colonial times, homeowners

were required to keep water buckets on hand and respond to local emergencies. By the early 1800s, private firefighting brigades had emerged in many cities. They were staffed by volunteers, but their service was not free. If you weren't a paying customer, you were out of luck. That's how they started out. You subscribed or paid them an annual fee and then they would come put your fire out. If you didn't pay anybody the fee,

you would have to negotiate with them before they would deploy and put your fire out. That is Steve Pegram. He's a recently retired fire chief who worked in the fire service for more than 30 years in New Jersey and Ohio. My wife would tell you that I'm a fire dork. I really don't have any other interests. It's all I read. If I'm on my iPad, I'm watching fire videos. If I'm reading a book, I'm watching fire videos. If I'm reading a book, it's a fire book. If I'm reading a magazine, it's a fire magazine. P. Grimm says firefighting has come a long way since the early days.

There are now 29,000 departments and more than a million firefighters across the country, around 65% of whom are volunteers. Most departments are now funded through some combination of municipal taxes, grants and fundraising efforts. And putting out fires is a public service rather than a profit-making business. Really, the fire department is insurance for the community. I don't think the fire service ever looks at it from an economic standpoint.

I mean, it's about saving lives first, saving property second, and firefighters in general are extremely aggressive at that mission, almost to a fault. Like a lot of firefighters, Pedram fell in love with the profession when he was a kid. I grew up in Brooklyn, New York, so hearing sirens and fire trucks running up and down the street all the time, the hook was in when I think I was probably about two. By the time I was 10 or 12, I was hanging around the local firehouse in New York City and all the guys there knew me and riding my bicycle, chasing fire trucks. I volunteered all through high school.

As soon as I turned 18, I got all my certifications and continued on. P. Grimm went on to work as a fire inspector and a firefighter before working his way up the ranks into administration. As a fire chief in Goshen, Ohio, he was responsible for managing the township's fire budget. And he says fighting fires is not cheap. In fire and EMS, everything is just astronomically expensive. So the cost of the fire engine, the hose, the nozzles, the ladders, the tools, the extrication equipment,

all the stuff the fire department needs to do their job. Most fire departments have both fire engines, which carry water and hoses that hook up to hydrants, and fire trucks, which carry ladders and special equipment. An engine can go for nearly a million dollars, and a ladder truck, which is twice the size, might cost closer to $2 million. That doesn't include the hundreds of thousands

of dollars worth of equipment that goes on the truck, like pry bars, extension ladders, and hydraulic rescue tools. Then there's all the firefighters gear, which is only sold by a handful of companies that have to meet federal safety standards. You can't just go buy a hard hat at Home Depot and wear it into a fire. You can't just go buy a hard hat at Home Depot and wear it into a fire. You can't just go to Radio Shack and buy a walkie-talkie for $250. We have to buy an intrinsically safe, NIMS compliant, yada, yada, yada radio that costs $7,500. And we're not buying that radio because we want a fancy radio. We're buying that radio because that's the only radio that will work on the system that we have.

Outfitting a single firefighter with personal protective equipment, helmets, coats, pants, boots, gloves, a thermal imager, a radio, and a breathing apparatus can cost as much as $20,000. And while there are more cost-effective options on the market, spending money on the highest quality stuff ultimately has a net benefit in the long run. Typically, if you're buying a cheaper set of gear, the protection it's going to afford your firefighters goes down. Then it's a risk. You know, what if the gear fails and they get burnt? So maybe we saved a couple thousand dollars on gear, but now we have a million dollar workers' comp claim. If you've had some significant injuries, people that required surgery, or God forbid,

a line of duty death, insurance costs can be astronomical. In most small towns, fire departments are run by volunteers and have very low labor costs. Only 9% of departments are made up entirely of full-time salaried firefighters. But this small sliver protects half the US population. At these outfits, anywhere from 75% to 90% of the budget goes to salaries, healthcare, and pension.

After accounting for fixed costs, Pecrim says that only around $200,000 of his department's $3.5 million budget was usually left over for operations. Fire stations may be costly to run, but the payoff is an emergency concierge service that is at the public's beck Beck and call 24 seven. Station 28. Test a fire in a country store in Half Moon Bay. Today, he's the administrative battalion fire chief for San Mateo Consolidated Fire Department. The department oversees nine fire stations, around 130 firefighters, across three cities in the San Francisco Bay Area. A shift at Station 28 begins at 8 a.m. The crew usually arrives at 7 to talk through the day over a strong pot of coffee.

Then it's time for some routine maintenance. What we call our morning checks, which includes checking out the fire engine, the tires, the brakes, all of that. We'll also check out all of our equipment, make sure everything's where it's supposed to be and that it's in good shape. Then we will start our station clean up. So it's cleaning toilets, it's taking out the trash, it's just making everything clean

and nice, washing the fire engine. Most firefighters live in the station around the clock for a day or two at a time. Then they're off for two or three days. At San Mateo Consolidated, firefighters do two days on, four days off. And during those two days, they're on call the whole time. If a call comes in, obviously we drop everything. So if we're in the middle of scrubbing a toilet, taking a shower, eating lunch, whatever it is, we drop what we're doing and respond. When a call comes into the station, every second counts.

That's why many stations, including Station 28, still use fire poles. They're faster and safer than running downstairs. Our expectation is our crews are on the engine and out the door within one minute. At night, our goal is two minutes because you have to wake up, you have to get down there from being at a dead sleep. So we give them a little bit of grace, I guess. The department's average response time from 911 call to arriving at the scene is just

under five and a half minutes. That kind of urgency is especially appreciated when there's a fire. Around the U.S., local fire teams like Station 28 respond to around 1.5 million fires each year, which cause an estimated $18 billion in property damage. The National Fire Protection Association groups these fires into three categories. There are structure fires, which affect single-family homes, businesses,

and other buildings. There are vehicle fires, and there are outdoor fires, which can be anything from a brush fire to a literal dumpster fire. McIntosh says that most fires his department responds to start in the kitchen. I would say the majority of them are cooking. So somebody either putting some food on the stove and then forgetting that they have it on there and then they go shopping.

But he's also noticed an uptick in other culprits. We are seeing a big increase in lithium ion battery fires. That is kind of a new phenomena for us in the fire service. Obviously lithium ion batteries are everywhere now in phones and computers. The electric vehicle fires require an amazing amount of water to put them out, just continuous. Even when we put them out, they can reignite. But on top of that, we're seeing a lot of hoverboards or electric scooters or electric skateboards.

And just recently we had a hoverboard charging next to a kid's bed. And the charger was for an older hoverboard and it exploded. It caught the floor on fire, ended up having some burns in the ceiling from the batteries exploding. But at many departments, fighting fires has become a relatively rare part of the job. In recent decades, firefighters have essentially become publicly funded EMTs.

That's coming up. Jackson is over here cooking lunch for the crews. And so this is the kitchen area. I'm doing a little steak and goat cheese salad with candy ball buns. Last year, San Mateo Consolidated responded to 19,719 calls across its nine stations. But only 3% of those calls were fires. This year alone, we have averaged around four structure fires per month. So that's not a lot, you know? And those four fires?

Most of them don't require much action. I would say three of them are extinguished with the sprinkler system that has been installed in the building or by a resident who grabbed one of the fire extinguishers prior to us even getting there. This isn't an isolated phenomenon. A few years ago, Joshua Hurwitz, then a PhD candidate in economics at Harvard, decided to write his dissertation on firefighting.

He took a look at data from the National Fire Protection Association, the U.S. Fire Administration, the National Fire Incident Reporting System, and government census reports. He focused specifically on salaried departments that serve a population of at least 20,000 people. And he found that between 1987 and 2017, the number of fires in this sample dropped significantly. Structure fires were down by 34 percent. Vehicle fires were down nearly 60 percent. Outside fires were down more than 40 percent. And then all other fire types by more than 50 percent.

So on a population weighted basis, total fire incidents fell by nearly 60 percent over three decades. So about 10 fires per 1,000 citizens to about four. Both the number of firefighter and civilian deaths and injuries from fire decline proportionally with incidents. These declines can be attributed to better fire prevention efforts. There's many contributing factors, including the development and enforcement of stricter building codes, the increased prevalence of fire retardant building materials, proliferation of alarms and sprinklers, education efforts. With fewer fires, you might think we'd need fewer firefighters to fight them.

In fact, Hurwitz found, we've ended up with more. The number of salaried firefighters increased by 54%. So if there's been a decline in fires, why aren't cities and counties closing the firehouses and redirecting money to other public services? Because it turns out demand for firefighters is higher than ever. Nationally, fire departments respond to more than 36 million calls each year, more than three times as many as they did three decades ago.

But fewer of these calls, less than 4%, are about fires. So what exactly do firefighters do all day? The fire department does a lot more than just fight fires. Again, that's Steve Pegram. I've spent four hours on a pig rescue, getting a pig that fell into a hole. I've been on horse rescues, I've been on cow rescues, I've been on flooded basements, you know, houses with six feet of water in the basement. Beyond the weird stuff, Peekroom says there's one type of call in particular that occupies today's departments. There's a lot of places where the local

fire department is who people call for a headache, for back pain, for things that might be very minor to you and me, but in their world, that's an emergency and they don't know who else to call. So we've seen a lot of that and most fire departments report that probably 80% of the calls they respond to are EMS. EMS or emergency medical services is a catch-all term for the treatment of medical emergencies like strokes, heart attacks, and drug overdoses before the patient makes it to a hospital. The modern EMS system traces its roots back to the 1950s. Back then, if you needed a ride to the hospital, the local funeral home would help you out. They had some basic first aid training

and they would respond with actually the hearse and pick up people and take them to the hospital. And if the person passed away, then the same hearse would pick them up and take them to the funeral home. In the following decades, funeral homes and hearse were replaced by ambulances. Today, most ambulances in the US

are operated by ambulances. Today, most ambulances in the US are operated by private companies. This leaves many places with shortages. In San Mateo County, where McIntosh lives, there are only around 20 ambulances on the road at any given time to serve a population of 730,000 people. The response time is often 10, 15 minutes for somebody who is choking or having a heart attack. That is obviously way too long.

The struggle of course is economics. I mean, it's just that ambulance agencies, at least in this county, is a for-profit agency. So they need to make money, you know, and if they had 30 ambulances on the road every day, they wouldn't be able to survive financially. So, fire departments have been integrated into the EMS system to plug the gap. Many stations now have full-time EMTs, or paramedics, on staff.

Fire engines are deployed to answer basic medical calls and they're usually able to get to the scene much faster than ambulances which are often stuck waiting in long queues at the ER. A lot of times people say well I called 911 for an ambulance and a fire truck showed up first. So in most communities they use computer aided dispatch. If a fire engine is closer to a call than an ambulance per se, they will send both because the goal is to get care to that person and if we can get a paramedic or an EMT on a fire truck to that person

and start treating their medical emergency, the chances of a better outcome are going to go up drastically than if we just wait for the ambulance that might be 15 minutes away. Now using using a $2 million fire truck instead of a $125,000 ambulance to respond to a stroke or heart attack is not an ideal allocation of resources. The same argument applies to labor costs. Here's Joshua Hurwitz. The median pay for EMTs is less than 80% of firefighters. And that total compensation gap can be much larger in big cities, especially with tenure. Fire engines are also considerably more expensive than ambulances. They often cost, you know, five to ten times as much. They have higher maintenance costs. They typically require more personnel.

But in a system where you already have fire engine units that are strategically located throughout cities and they're already salaried firefighters, you know, the marginal cost of sending them to first response, especially when ambulance units might be busy, is low. As a part of his paper, Hurwitz also used compensation and call response data to calculate the cost of a single firefighter response. And on average, this implied a minimum of just over $400 per response. This estimate includes all types of responses, fires, EMS calls, and even false alarms. So sending a fire crew to respond to an asthma attack might not be as cost-effective as saving 10 people from a burning building.

But Hurwitz says that either way, firefighters are worth many times what they're paid. Given the economic value that we place on life, a single save by a firefighter over a career can more than outweigh total employment costs. And no matter what kind of call is coming into the station, Steve Pegram's old crew will be there in a matter of minutes to offer a helping hand. So there's always been a saying in the fire service that they don't deny service to anybody.

I mean, they will help you change a tire. They'll give grandma CPR. They'll dive into a pond to rescue a drowning child. CPR, they'll dive into a pond to rescue a drowning child. Maybe it's not a fire, but they have a great big toolbox and a whole bunch of really smart men and women that can fix problems. For the economics of everyday things, I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rapson.

Special thanks to listener Robin Hall for suggesting this topic. Sliding down these poles in the middle of the night with shorts on, it can rip all the leg hairs off. Yes, yeah. The Freakonomics Radio Network. The hidden side of everything.