the power of incentives The headline seemed unsurprising: "New York City Facing Exodus of Firefighters." I can't begin to imagine the stress that they've been under since September 11. But, like most stories, there's more to this one than meets the eye:

Like police officers, firefighters with more than 20 years on the job are entitled to a pension equal to half of what they earned in their last 12 months of employment. This year, many firefighters who typically earn about $65,000 a year have seen their salaries rise to $80,000 because of the additional overtime earned between September and May, officials said.

In other words, those who retire now will get an extra $7,500 of pension every year. Please note, I'm not trying to disparage the firefighters taking advantage of the policy -- I think they're smart to do so, and I'd probably do the same. But that's not to say that the policy itself is particularly well thought out. Whether for corporate officers or for NYC firefighters, incentives matter.