The state of the security companies in Los Angeles

The state of the security guards industry in Los Angeles is getting worse not only for security companies and security guards, but for society as a whole.. One of the theoretical principles of free market economics is that free market and trade will bring about competition. If market entry barriers are low and there is a profit to be made more competitors will enter the market if there is a demand for services. Competition will drive down price, which in general is good for consumers. In the ideal case of competition profits will tend towards zero, because competition is fierce and entry barriers are low so more competitors keep entering the market.  In Los Angeles we see a classic case of the example described above. The entry barrier for opening a security company is extremely low, because it only requires a licensed qualified manager, who needs one year of experience as security guards. The company must provide general liability insurance and workers compensation insurance, which is fairly inexpensive for a new company. Therefore more companies are opened every day. Most new companies offer cut throat prices and work on an extremely low profit margin. The challenging economic situation of potential customers makes the situation worse, because potential customers will often hire the company that offers the lowest price without checking references or looking at the overall value added and quality of service. That situation has detrimental effects on the security industry, but also on the society as a whole. In Los Angeles there are four times more private security officers than police officers, which mean security officers are our line of first defense against vandals, thieves and terrorists. Our public security depends in large part on the training and motivation of private security officers. LOs Angeles according to the bureau of security and investigative services has the most licensed security companies in the United States. The increase competition leads to lower prices and ultimately to lower pay for security guards. Additionally, security companies will spend less money on training and screening of security officers, because they have to lower cost to be able to compete with other companies. Lower pay and worse training result in security officers being less motivated and less skilled. The security of most LOs Angeles businesses now depends on less trained, worse screened and less motivated private security officers. A proponent of free market economics will argue that a customer that requires higher quality security will pay more for better trained security officers. The problem with that argument is that prices have been falling across the board. Reputable quality companies had to cut costs and training in order to compete with cut throat companies. In order to rectify the situation the State of California must either raise entry requirements by requiring three years of experience one of which must be in a supervisory position like the State of Texas does or make some training mandatory for security guards. Otherwise the skills of security guards will continue deteriorating and as a result Los Angeles and its businesses will be less safe.