Salaries are on the rise in police departments across the US, despite protests and calls to defund the police

New york police officers
NYPD officers stand guard on April 4, 2021 in New York City.

  • The 2020 median salary for a police officer in the US was $67,290 – the median for all jobs was $48,769.
  • Despite ongoing calls to defund police departments, officer salaries are only getting higher.
  • Police forces are growing, too, with incentives to join such tuition reimbursement and signing bonuses.
  • See more stories on Insider’s business page.

Police work can be one of the best-paid professions in the United States.

According to the US Bureau of Labor Statistics, the 2020 median salary for a police officer was US$67,290 – more than one-third higher than the national median of $48,769 for all occupations. Many officers probably earn much more, because the bureau’s analysis is based on hourly wages for a typical work year of 2,080 hours and does not include overtime – one of the factors that can drive an officer’s yearly income even higher.

Although there is a great deal of variation across the nation’s roughly 18,000 police departments, the agency also reports that salaries for police have largely climbed in the past five years – from an 8.8% increase in Mississippi, the state that overall pays its police the least, to a 21% increase in Hawaii, one of the best-paying states.

While efforts to control police budgets have succeeded in Austin, Denver, and Oakland, among others, the Biden administration recently announced that COVID-19 relief funds can be used to hire police officers to combat the rise in gun violence.

As a former police officer who studies policing in America, I think it is unlikely that police salaries can go anywhere but up.

Read more: 3 IT professionals who didn’t get a college degree and are now making 6 figures reveal how to succeed in their field

Police salaries are inching up

Just look at the trends across the US.

The Bureau of Labor Statistics published the mean salaries for police officers in all states plus the District of Columbia for the year 2018.

Somewhat predictably due to cost of living, California topped the list at $101,380, followed by Alaska at $88,030, where the cost of living also drives salaries higher. New Jersey, Washington state, and Hawaii round out the top five.

All of the 10 departments with the lowest-paid officers are located in the South, where Mississippi police officers earn slightly more than one-third of their California counterparts.

Large cities clearly offer higher wages to their police officers, as do some cities surrounding large metropolitan areas. The Los Angeles Police Department currently advertises a starting salary of $70,804 a year. That’s up from the 2015 starting annual salary of $59,717 – an 18.5% increase over just six years.

Starting salary for police officers in Baltimore is $55,117, with a seasoned officer earning $95,325, base salary alone. Seattle officers earn $83,600 once they’ve completed their basic academy training and top out at $109,512 after 54 months, not including overtime. Seattle even agreed to pay its officers an extra 2% for wearing body cameras.

Larger, better-paying police departments attract officers from smaller departments by offering more pay and better training for experienced officers. This often leaves a void that small agencies struggle to fill with qualified candidates.

There are three main drivers of police take-home pay: overtime, education, and competition.

1. Overtime

In his recent trial for the murder of George Floyd, Minneapolis police officer Derek Chauvin was represented by an attorney paid for by his union, the Minneapolis Police Federation. This benefit is only a small part of the union’s 128-page labor agreement with the city, which details salaries, vacation, sick leave, medical insurance, grievance procedures and, in particular, overtime pay.

Reportedly, Derek Chauvin’s 2018 salary was $90,612, more than twice the average Minneapolis per capita income of $38,808 in 2019. But it’s overtime rather than base salaries that drives up officers’ total compensation.

Across the country, police officers typically receive “time and a half” for every hour worked beyond the standard 40-hour week, meaning a pay rate that combines their regular hourly rate plus an additional 50%.

Most union agreements also stipulate higher pay for other work deemed “overtime,” such as off-duty court appearances. They also stipulate other after-hours pay boosts, such as a minimum of four hours’ pay for officers called back to duty for any reason.

In practice, these extra pay arrangements have a huge effect on driving up the size of police budgets. A few examples:

  • In Los Angeles, where the second-largest police force in the US boasts salaries of $83,144 after two years of employment plus an annual 1.5% cost-of-living increase, the union recently negotiated $245 million in overtime pay for its officers.
  • Boston’s complex agreement with its police department results in many opportunities for overtime as well as extra payment for special assignments.

City governments typically budget for some police officer overtime, since that extra income does not count toward an officer’s eventual retirement pay and reduces the need to hire additional employees. However, unanticipated events such as national disasters, public demonstrations, and political rallies all result in overtime pay for cops that cities must pay whether or not they planned for it:

2. Education

Few local law enforcement agencies require a four-year college degree, but most offer educational incentives that range from a 2% annual salary increase for earning an associate’s degree to 10% for a bachelor’s degree.

For example, since 1970 in Massachusetts, police receive pay incentives of up to 25% over and above their regular salary for a master’s or law degree. The Chicago Police Department, among others, provides tuition reimbursement for college courses, as well as additional incentive pay once a degree is completed.

Such incentives may be a good investment. Research indicates that police officers with college degrees are less likely to use lethal force and are subjects of fewer citizen complaints. Since fewer complaints mean fewer claims to pay and lawsuits to defend, this can ultimately save cities money.

3. Recruitment

More police officers are leaving the profession before retirement age, according to a 2019 study by the Police Executive Research Forum. The group has also found that the number of applicants for police jobs has steadily declined over the past 10 years. So departments trying to attract new recruits often go beyond tempting salaries by offering incentives like assistance with relocation, housing and childcare, education pay, college tuition reimbursement, health club memberships, and employee signing bonuses.

At the New York Police Department, the nation’s largest force, the starting salary is a relatively modest $42,000 a year. But the department highlights on its website that starting benefits include “holiday pay, longevity pay, uniform allowance, night differential, and overtime,” which together with salary can boost annual compensation to more than $100,000.

Even smaller departments are coming up with incentives to try and remain competitive with larger agencies that can offer higher salaries, more overtime and more attractive benefits. The police department of Bellmead, Texas, a city of around 10,500 about two hours north of Austin, has begun offering experienced officers a $5,000 bonus for signing on to the force.

Another trend to watch: Not only are police salaries rising, but the size of police forces also continues to grow. The Bureau of Labor Statistics forecasts a 5% growth in police jobs from 2019 to 2029, from 813,500 to an estimated 854,200, which is faster on average than other occupations.

Laurie Woods, senior lecturer in sociology, Vanderbilt University

The Conversation
Read the original article on Business Insider

I’ve followed the ‘30% rule’ since renting my first apartment, and 5 years later I’m seeing the impact

woman moving into apartment
I committed to the ‘30% rule’ in my early 20s and have lived by it ever since (author not pictured).

  • There’s a rule of thumb that Americans should spend no more than 30% of their income on housing costs.
  • I’ve followed this rule since renting my first apartment in New York City, and stuck to it when I moved to Los Angeles and ever since.
  • I’ve had to make some concessions along the way, like living with multiple roommates and taking the “worst” bedroom for a lower price.
  • By keeping my long-term fixed housing costs to less than 30% of my take-home pay, I can be way more flexible with the rest of my budget.
  • Sign up for Personal Finance Insider’s email newsletter here »

It’s been just over five years since I went looking for my first post-college apartment in New York City.

I knew rent could be a wallet-buster in NYC, but I didn’t want to ask my parents for help even though I was earning a low hourly rate as an intern. It was time to flex my frugality muscle. 

I had some cash set aside from graduation gifts and decided part of it would go toward a security deposit and part would become my emergency fund. That meant monthly rent and utilities would come from my paychecks (as it does for most people). Rent in college was dirt cheap, so I had no idea how much I should be spending in the real world.

After some Googling, I found a rule of thumb recommended by financial experts and upheld by the US government: Aim to spend no more than 30% of your gross income on housing.

This concept was developed in the 1930s when the government began measuring housing affordability. It was originally lower, but by 1981, 30% became the standard. Americans who spend more than 30% of their pretax income on housing costs, including insurance and property taxes, are considered “burdened.” The calculation is based on the cost of other goods and services, like groceries, healthcare, and education.

Mortgage lenders can be even stricter – many don’t like to see a potential homeowner spend more than 28% of their income on housing.

I did some back-of-the-envelope math using my take-home pay instead of my gross income because I wanted to account for taxes. The 30% benchmark seemed to fit well with the rest of my budget. I’d have enough to cover my other expenses, like food, transportation, and some entertainment, plus stash a little bit in savings.

Right then I committed to the 30% rule, and I’ve lived by it ever since. 

How I followed the 30% rule in expensive cities

Apartment hunting sounds fun in theory. In practice it can be tedious and frustrating, especially if you’re on a strict budget. But a good enough apartment always crops up eventually, even if it doesn’t tick every box on your wish list. 

After about a year and a half living in New York, I moved to Los Angeles. I jumped from one increasingly expensive city to another.

To stick to the 30% rule, I had to make some concessions. In both places I lived with at least two other roommates and always took the worst room, which translated to the cheapest rent. In New York City, that meant a windowless bedroom in a railroad-style apartment in one of the outer boroughs. In my first apartment in Los Angeles, I took the most inconvenient parking spot and the only bedroom without an en suite bathroom (this is nothing to complain about, I know).

Rent isn’t the only housing expense, though. Internet has typically cost an extra $30 or so each month, but water and power can be more unpredictable. These costs are hard to control when you’re living with roommates, since you can’t police their energy usage or shower time. In fact, I’ve had minor crises in the past – a $500-plus electric bill just about floored me.

In these cases, I tapped my emergency fund to pick up the slack, which I’m convinced I have been able to maintain precisely because I’ve been so strict about keeping my fixed housing costs low.

Keeping my housing costs low has opened up room for savings

Each time I’ve moved apartments – a total of three times since that first New York City apartment – I’ve been at a higher income level. I do a new calculation every time to see what 30% of my post-tax income is, and won’t sign a lease unless what I’m agreeing to pay is below that amount.

Housing is not a very liquid expenditure. You can’t cut back on a dime because most leasing agreements last around 12 months. But you can quickly cut back how much you spend on shopping or lunch. I realized how important it is to be mindful of how much I spend on housing, since it’s usually a long-term commitment.

By controlling my housing costs, I’m able to be way more flexible with the rest of my budget. It’s worth noting that I didn’t have student loans to repay and have always avoided credit-card debt, so my expenses outside of housing were already pretty flexible.

As my income has gone up, I’ve put the money toward other categories of my budget, like upgrading my gym membership, traveling more comfortably and conveniently, and saving more money

I’m particularly focused on funneling as much money as I can into my 401(k) so that it has decades to grow before I retire. I also want to make sure I’m prepared for unexpected costs that arise now. Instead of moving into a nicer apartment in a nicer neighborhood each time I get a pay raise – therefore eating up my newfound cash with housing costs – I bump up my 401(k) deferral rate and add to my emergency fund.

The 30% rule won’t work for everyone

Like any other personal-finance rule of thumb, the 30% rule is more of a guideline than a mandate. You might have less choice than I did about exactly which city or neighborhood you live in and how many roommates you have, or you might prefer to spend more budget on your house and less on food and travel. 

For me, the 30% rule provided a good foundation for crafting a spending plan. Keeping my fixed, long-term costs low means I can be nimble with everything else.

Tanza Loudenback, CFP®, is the personal-finance correspondent at Business Insider. She writes most frequently about saving money, planning for retirement, taxes, debt management, and strategies for building wealth. Have a money question for Tanza? Fill out this anonymous form

Related Content Module: More Personal Finance Coverage

Read the original article on Business Insider