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1. 1
The Most Successful Security Agency
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2. Is the growth of private security desirable for city
government and for the constituents?
Growth includes new security activities and new
types of crime; also, police shedding private
services/contracting out public police services.
If the trend is desired then cities should encourage
the shift to greater reliance on private security. If
not, regulate against private expansion and
finance additional police.
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5. Source : BLS National Occupational Employment and wage estimates for 1997 through 2008
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6. 6
Figure 4: Crime Rates Over Time
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9. Private security is growing more rapidly (50%) than both total
and public police (constant) employment over 11 years.
Private police wages grew slightly less than both overall and
public police 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 overtime constant at 3.14
percent of all state and local expenditures.
Public police wages are consistently 2.15 times private police.
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10. GDP. Police respond to non-public 911 calls leading to inability to satisfy
demand for crime related calls, forcing businesses and residents to hire
private security services. For example, undesirables congregating around
stores in SF, business districts in Chicago, and response to false alarms.
Privatization. Reflects general trend, tighter state & local budgets.
Liability. Premises and inadequate security even beyond the perimeter.
The number and size of judgments have been increasing.
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)
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11. Objectives and behavior: Private services clients.
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).
Public police enjoy legal authority & greater liability
protection. Private police are not bound by constitutional
restrictions (warning before interrogation)
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12. Cost: Wages of private guards are 47% of sworn officers. Public police
are better trained but their salaries are determined by union contracts
unlike competitive private guards.
Public police, like monopolies, provide standardized service, insensitive
to changing market demands. Private police serve new niche markets
by hiring lawyers, accountants and IT professionals. Public police
constrained by civil service rules can only train sworn officers for such
uses.
Private police blend into IT, and customer service while public police
are more rigid to change.
Private less likely to abuse citizens: Private police can be sued, fired
more easily, and are more susceptible to market forces.
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13. 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
Homogeneous service
Knowledgeable buyers
Individual negotiations on contracts encourages
competitive pricing.
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14. New types of economic crimes: identity theft, cyber fraud, malicious
(viruses) internet crimes, counterfeiting goods, employee fraud.
Police do not have the requisite skills to deal with them; they require
much time and expenses, are not jurisdictionally bounded, and they
lack desired press publicity.
Police refrain from dealing with crimes that adversely affect
profitability of firms unless directed by the district attorney.
Businesses wish to avoid publicity of crime targeted at them.
As a result, Economic crimes are handled by accounting,
engineering, law firms, and newly created highly professional
security companies.
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15. 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.
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16. Tight budgets will encourage public police to shed non-public services
and contract out quantifiable public services. For example, guarding
prisoners, courts and other government buildings, crime labs, guarding
public transit. This will expand demand for private security. The highly
competitive private security industry will ensure competitive pricing.
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 forces firms 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.
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17. 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.
Expansion of highly competitive private security is a socially desired trend
and does not require cities to regulate. Free markets provide quality
control, and technological and managerial innovations.
Promote Public Private Partnerships like in a case of response to burglar
alarms, counterfeit goods, and identity thefts.
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