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Compensation

Inadequate wages and benefits are one of the most important factors driving nurses out of the profession, and with good reason. Real wages for the nation's RNs were stagnant over the course of the past decade, with inflation-adjusted earnings in the year 2000 virtually identical to where they were in 1990.103 Declining RN wages do not reflect trends in the broader economy or changes in the quality of the RN workforce. Rather they are directly related to the institution of managed care. During the 1980s, when many hospitals sought to expand their nursing staffs, RN wages rose modestly but steadily. They flattened during the early 1990s and then declined significantly from 1994 to 1997, the years when managed care began sweeping the nation.104 Moreover, trends in RN wages are highly correlated with the spread of HMOs — states with the highest degree of market penetration by HMOs show the steepest decline in RN wages.105


The reality of stagnant wages is clearly felt by nurses on the job. Aiken's survey, for example, found that only 57 percent of nurses in Pennsylvania believe their salaries are adequate.106 The New Hampshire survey found even more dramatic results, with only 36 percent of nurses stating that they feel they are being paid a fair wage.107 Evidence as to the importance of wages extends beyond the opinions of nurses themselves. Both governmental agencies and scholarly research have documented the relationship between inadequate wages and a shrinking pool of working RNs. A U.S. General Accounting Office study of nursing concludes that "wages can have a long-term impact on the size of a workforce pool as well as a short-term effect on people's willingness to work."108 Indeed, economic analysis shows that as nursing wages increase, greater numbers of RNs are drawn into the workforce.109 The trend in nurse wages explains a significant share of the increase or decrease in the RN workforce; so too regional variations in wage rates have a clear impact on the relative size of the nursing shortage in various parts of the country. Both the testimony of nurses and the findings of scholars point to inadequate wages as one of the chief causes of the nursing shortage.

 

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