You can't open a newspaper or turn on a television these days without coming across a story about the economic downturn. So I ask you: Did you see it coming? Now that it's here, what are you going to do about it?
I expect that some of you will say that you didn't see it coming, otherwise you would have done something to prevent its negative effect on the fire service. Unfortunately, economics rarely are discussed in fire-science curriculum and, to a very large degree, we in the fire service do not feel that we have much to say about the economy. But should we have seen the warning signs?
If you are a student of history, you already may have known that the very first financial crisis this country faced was in 1797. The fire service was still in its infancy then and was almost entirely volunteer, so I doubt anybody noticed. However, there was another depression in 1807 followed by a series of financial panics leading up to the panic of 1857, when the failure of the Ohio Life Insurance and Trust burst a speculation bubble involving the U.S railroads and caused a loss of confidence in American banks. More than 5,000 businesses failed. Yet, in 1853, Cincinnati opened the first full-time paid fire department. As the paid fire service became a reality, most fire chiefs of the time likely weren't concerned about the overall economy.
If you start tracking recessions and depressions, you'll see that they occur with an amazing cycle of repetition. The U.S. saw the Great Depression in 1929, another recession in 1937 and yet another in 1945. The reality is that severe economic downturns have occurred many times throughout history. While they bring about fear and uncertainty, recessions are part of the economic cycle.
I discovered in my research that I was hired during a recession. It started in 1960 and lasted 10 months. Unemployment reached a peak of 7.1% in May 1961, when I found my job as a wildland firefighter.
Economic growth depends on the balance between the production and consumption of goods and services. As the economy grows, so do income and consumer spending. The world is not perfect. Economic crises will continue to occur. They could be from something as simple as oversupply, where producers manufacture too many goods to be consumed. When demand drops, incomes drop.
Economics 101 requires that we, as fire chiefs, need to be as concerned about the national, state and regional economy as anyone else. We not only should be aware of this cycle, but we also should understand our role in that cycle. We need to embrace the idea that a recession can occur and understand the reasons why it can occur. Moreover, we need to understand what role the gross domestic product plays in our local economy.
Our job is to protect the economy from losses created by fires that could have been prevented. We can learn from history by looking at the positives and negatives of these economic conditions on our profession.
My research indicates that there are at least five impacts of economic downturn that could affect us: rising unemployment in the private sector, reduction in tax bases, fear, sinking values for services and loss of confidence.
On the other hand, economists believe that there are a similar number of positives: getting rid of excess, balancing economic growth, creating buying opportunities and changing consumer attitudes. I will add a fifth: the opportunity to bring about change.
There is a relatively large number of people in the fire service who are looking at today's economic downturn as if it was the first. The problem with longevity is that you have the opportunity to witness these cycles repeatedly. California's Proposition 13 — which lowered property taxes — was heralded as the end of the fire service as we knew it. That didn't happen.
I will tell you what did happen. That same era saw the creation of alternative funding measures for fire protection, including infrastructure fees. It saw an increase in regionalization and an emphasis on productivity and accountability. Lastly, Prop 13 shifted the burden of fire protection from business and industry onto the shoulders of the single-family and multi-family dwelling. That has had an impact on what the consumer perceives to be part of the growing concern over funding of local government services.
This economic downturn will reset community expectations. We should be ready with answers as to why the fire service should be adequately funded to meet community expectations in the future. I know it is a vicious cycle, but as long as the fire service is part of government, it is a cycle we can anticipate. We should be better prepared to deal with it than we are today.
Ronny J. Coleman has served as fire chief in Fullerton and San Clemente, Calif., and was the fire marshal of the state of California from 1992 to 1999. He is a certified fire chief and a master instructor in the California Fire Service Training and Education System.
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