Nursing is one of the most in demand labor in the United States. There are many factors that influence the supply and demand of nurse’s position. As with any labor market, nursing pay and salaries are calculated through many factors. Many states have taken steps to increase the supply of nurses. Nursing is one of today’s most demanding jobs. Nursing is known to lead to depression and high level of stress.
To increase the supply of nurses, more nurses need to be trained. The best way to accomplish this is to have more teachers, but it is difficult to convince nurses to teach instead of work in a hospital due to the salary differences. Nursing teacher make approximately $41,000 annually compared to $42,000 of a nursing graduate just out of school. There is a shortage of nurses throughout the world. Nursing salaries are determined by the needs and capabilities of a community, the work schedule, and the training, expertise, and experience required. ( Bergmann, 2004).
Nursing salaries are for sure influenced by economic factors. There are 10 principles of economics. The first one is tradeoffs. As we make decisions, we make tradeoffs, which mean we choose something over something else, or we have to give up something in order to have something else. Society as a whole also involves tradeoffs; the government has to choose how much money to use in certain aspects of the country. It is hard to imagine any period in time when economic issues were more visible in health sector decision-making. The search for measures that maximize available resources has never been greater than within the present decade.
A staff payroll represents 60%-70% of budgeted health service funds. The cost-effective use of human resources is thus an objective of paramount importance. To make nurse rewards more effective it is suggested to : improve nurses salary, provide compensation for job- related expanses, introduce promotional opportunities within the clinical areas, make available range of financial rewards such as insurance benefits.
The initiatives that compel the earning in the nursing field can be primarily based on two concepts: people face trade –offs and government can positively affect the market. The trade-offs in nursing are definite, because there is very little chance of wage increase. There is only a $3.87 per hour or 14% increase between median pay wages for nurses with one and twenty-one years in service (PayScale, 2009).
Nurses represent the largest category of health workers and provide 80% of direct patient care. Their contribution is not limited, however, to the provision of services. That’s why nurses expect to be paid properly for the labor. Another factor that influences on nursing labor market is government. The positive affect can be seen in the government action to improve the nursing shortage by offering federal incentives to enter the field. The most critical factors impacting a nurse’s wage are the number of years the professional has been working in the field, tenure at the employer, and, as in many fields, location. Though the average salary remains around $30 an hour nationwide, the median between metropolitans can vary by as much as $10 an hour or $20,000 annually.
Houston: $28.76 – 35.27;
Atlanta: $24.61 – $33.04;
Dallas: $27.07 – $35.11. (PayScale, 2009).
The area in which the nurse is located will influence on how wages are calculated because factors like population, density, demographics, and proliferation and availability of health care affect the supply and demand of qualified nurses. There are several other factors which should be blamed for the nursing shortage. Nurses often do not practice because of job dissatisfaction. That is the reason why less people are entering the field. There are only few nurses who posses the necessary doctoral or master degree to teach college nurse programs. Students entering the profession would want to know that they are guaranteed fair pay for their commitment. Though the demand is huge and the supply is more than lacking, the value is not seemingly increasing. This can be explained by the monopoly that privatized healthcare has on nurses.
There was agreement that incentives must come from within the nurses’ value systems. Financial incentives, as a category of economic incentives, were mentioned most frequently although investments in improving working conditions and rewards in kind were suggested as more meaningful for nurses. As a general principle, key informants agreed that direct and indirect economic incentives should exist at comparable levels with other professions.( Antrobus, 1997). In general, performance-related pay was believed to be inappropriate for nurses and great concern was voiced as to the criteria used for determining success.
Every year hospitals need more registered nurses. Between 2004 and 2014, more than 1.2 billion nursing positions will become open, either to meet growing demand for medical care or to replace nurses who retire or leave the field. Hospital administrators are voicing concerns about a nurse shortage, some are even declaring a crisis in nurse staffing. Nurses themselves are worried about the impact of understaffing on the quality of patient care. In general, wage growth is so concentrated in the early years of a nurse’s career that earnings after 20 years in the profession are only one percent to three percent higher than those of nurses with only five years of experience. Nurses with starting salaries of $35,000 reach an earning up to $47,000 and have more room for earning growth. Extra education should also improve worker’s wages. In fact, nurses trained in diploma programs earn more than those with a bachelor’s degree.
Health care jobs are one of the riskiest. Hospitals have the highest rates of nonfatal workplace injury and illness of all industries. Nurses are vulnerable to latex allergies, physical assault, blood-borne pathogens, and pollution from surgical waste. Workers such as nurses who are exposed to greater risks on the job, should be compensated for the risk associated with their occupation.( Levine, 2001)
Many factors have a negative influence on supply and demand. Employers may offer too low wage, so they are not able to hire enough workers. Workers may have gotten the wrong kind of training, so they are not qualified enough to accept jobs that employers suggest. As far as nurses are primarily women, the mere fact that women are the main holders of the job leads to their pay being usually low. (Levine, 2001). Despite the fact, that nurse’s wages were flat, in the last few years nurse wages begun to rise. Even though the wage issue was neglected, it is proved that wage plays a critical role in the labor supply. Analysis of recent wages and nurse employment finds that wage increases are accompanied by significant increases in employment as well as growth in enrollment in training programs. This is evidence that hospitals can effectively address problems they have in attracting qualified nurse personnel by offering better wage inducements. Currently trained nurses and new training program enrollment appear to be responsive to wage signals. Higher pay would signal that demand was beginning to outstrip supply and would draw new trainees into the nursing profession.
It is obvious, that low pay and poor working conditions push nurses out of hospitals. The proportion of all nurses who are employed by hospitals has been decreasing for the last 20 years. It is due to nurse’s dissatisfaction with working conditions in hospitals. Many nurses are able to find both higher salaries and preferable work schedules in jobs outside nursing. Mostly, those who are not working in nursing are in positions with higher pay.
Unions strengthen nurses’ voice in negotiating wage and compensation issues with their employers. According to recent surveys, unionization increases hospital nurses’ wage by 13 percent. This adds $2.84 an hour to average hourly wage of non-union nurses, giving those who are union members an average wage of $25.51. (Bergmann, 2004).
Unions do more than increase wages for their members. Wages are higher for all nurses in cities with greater levels of unionization. The average hospital nurse wage in the least unionized cities- Salt Lake City, San Antonio, Texas, Denver, Houston is $22.85. In unionized cities as Buffalo, San Jose, New York City, San Francisco the average wage is $29.20. The difference is $6.34 an hour. Union density varies from a high of 70 percent in Hawaii to a low of 3 percent in North Carolina. The relationship between unionization and pay can be measured statistically. It shows a strong correlation between the presence of unions and overall wages of nurses. (Levine, 2001).
Higher wages and fair negotiations compensation are the keys to solving the hospital nurse shortage. Increasing union representation is one sure way to improving compensation. Corporate responsibility for fair wag-setting will allow wages to better reflect supply and demand. Where wages are not fairly determined, the government can step in to enforce its existing guidelines. Other solutions include regulation of minimum nurse wage. Analysis of the impact of nurse staffing and wages on public health care costs and patient outcomes would also support new mobilization around the impact of nurses’ employment conditions on quality of care.
Wage increases, relatively high national unemployment, and widespread private-sector initiatives aimed at increasing the number of people who become nurses has resulted in a strong employment growth among registered nurses. We also observe large employment growth from two new demographic groups: younger people, particularly women in their early thirties, and men. Hospitals should agree not to engage in collusive behavior that artificially reduces nurses’ wages and to strictly adhere to U.S Department of Justice and Federal Trade Commission guidelines on information sharing. Hospitals should not set nurse wages together with other hospitals.( Antrobus, 1997).