The lay off of police officers is political grandstanding. Certainly there are many other over paid and fat cat positions in city hall that could be cut without jeopardizing public safety. The politicians will always lay off police officers, firefighters and teachers to show how much they need more tax money, yet no one will dare to touch administrators, union chiefs and bureaucrats. A perfect recent example was in Milwaukee where more than 100 teachers lost their jobs while the teachers union fought to keep a free Viagra benefit in the union contract that amounted to nearly a $1 million cost to the school district.
These are creations of politics, not the market. Why should political creatures organize, or behave in economically rational manner, when they are in theory, fact and execution non economic actors?
The oldest, highest paid are the most hooked up to the political power structure. Economics has nothing, and will have nothing to do with it.