Nursing Wages

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Today in North Carolina and around the country nurses are in high demand and low supply. Many states have made legislation and incentives to help alleviate the problem. The best way to solve the problem is raise salaries and give hospitals and health care facilities more federal money to help pay wages.

In most markets including North Carolina wages are determined by supply and demand, e.g. if the need for a particular position is great, wages will rise in order to attract more workers to this field. Interestingly, for nurses this has not been the case. An analysis of this situation found in a report entitled "Solving the Nursing Shortage through Higher Wages" indicates:

• Over the late 1990s and into 2000, nurses’ pay did not increase at all, although some hospitals had already begun worrying about a nurse shortage in 1997. • When wages finally began to rise, nurses responded promptly—hospitals added 186,500 nurses between 2001 and 2003. • Instead of competing for nurses by increasing pay, hospitals often turn to a combination of overworking (through mandatory overtime), contingent workers, understaffing, and one-time hiring bonuses to meet staffing needs. (Lovell, 2006, p. 4)

The second point brings to mind the phrase "people face tradeoffs." Nursing is an arduous task, and if something less arduous, such as teaching, offers a comparable wage, people will leave nursing. In order to return to nursing, the wage had to be higher than that in these less-difficult industries. It was the trade-off between hard work and higher wages that was driving this move.

An article by Cohen, Milstein, Hausfeld, and Toll, (2008) reports, that hospitals in some cities were colluding to keep wages down. In 2006 hospitals in the cities of Albany, Chicago, Memphis, and San Antonio were accused of attempting to contain costs by agreeing in secret that they wouldn't pay nurses more than a certain amount. By refusing to compete with each other, nurses had no choice but to...
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