Wage Deflation In Nursing

  1. 16

    Some nurses who have been in the profession for many years have observed deflationary forces and downward pressure on nursing wages during the past few years. The intended purpose of this article is to explore wage deflation in the nursing profession.

    Wage Deflation In Nursing

    While recently conducting a Google search on the topic of stagnating and deflating wages in the healthcare sector, I honestly did not unearth much scholarly information on the topic. However, many nurses and other healthcare workers in the U.S. have certainly been impacted by wages that have either flattened or outright decreased during the past few years.

    Therefore, I believe that wage deflation in the nursing profession is a very real phenomenon that has been taking place for quite some time, even if a lack of formal data exists to help bolster my claims. Wage deflation is defined as an overall decrease in pay rates, whereas wage stagnation would be described as a general lack of growth in pay rates. Although some nurses and healthcare workers have been fortunate enough to have been shielded from downward pressure on their earnings, others have not been so lucky.

    Several things have been happening that have placed downward pressure on nursing wages over the past four or five years. First of all, a surplus of nurses now exists in many job markets across the U.S., so many healthcare facilities now have the upper hand when negotiating wages. After all, if the nurse who has been unemployed for nine months does not accept the pay rate that HR is offering him or her, many others will take the job without hesitation even if the wage is not really competitive. The job candidate is not in a favorable position to negotiate for a higher pay rate if HR has several hundred applications submitted per job opening.

    Second of all, schools of nursing have been graduating new nurses into local employment markets at a rate much faster than new job openings are being created. Many nursing schools have been created in recent years; in addition, some existing nursing programs have expanded to allow the admission of many more students.

    The end result is that more new nurses are graduating than ever, while fewer nursing positions are becoming available due to people who are delaying retirement out of necessity or clinging to their jobs to support unemployed spouses.

    Third, some middle-aged nurses with decades of experience have reported that their workplaces had terminated their employment to replace them with cheaper labor. In this economic climate, hospitals and other healthcare facilities are now able to hire nurses with less than five years of experience to replace employees with many years of experience who have topped out on the pay grid.

    A hospital can save money by laying off 25 experienced nurses who had been earning more than $40 hourly and fill the job openings with 25 less-experienced nurses who will work for less than $30 hourly.

    Some nurses who have been in the profession for many years have observed deflationary forces on wages during the past few years. Is this downward pressure on nursing pay rates going to become a 'new normal' to which we must become accustomed?

    I do not know, nor do I pretend to offer any solutions to what appears to be a complex issue.
    Last edit by Joe V on Jan 12, '15
    Blanca R, steffuturelpn, urbaneRN, and 13 others like this.

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    41 Comments so far...

  3. Visit  merlee} profile page
    23
    These wage issues have been going on for quite some time. It goes with the hiring of part-timers without benefits. We have been devalued by our own administrators, who are, in turn, afraid for their own positions.

    We do not respect our own kind in so many ways. And please, please, don't tell me that if I spend 40-60-80 thousand bucks on an education that I will be expected to work weekends and holidays, forever!

    But you can pay someone 20 bucks an hour and hope she knows what she's doing without any long-term staff around, or you can pay me 30 an hour and I can tell you to get the crashcart just by knowing what that cough is moments before the person drowns in their own CHF fluids. Your choice.

    Nurses have just become another place to cut costs.
    Not_A_Hat_Person, gswifty, RN1982, and 20 others like this.
  4. Visit  TheCommuter} profile page
    5
    Personally, I have not gotten a raise in more than two years and, when I approached HR about the topic, was told that I would not be receiving any pay increases in the near future.
    Jessy_RN, tewdles, imintrouble, and 2 others like this.
  5. Visit  plumbtrician} profile page
    10
    Sorry y'all if this sounds like a bitter pill! There is a solution to wage deflation. It's a novel concept called "unionizion"!!!!!! Ever heard of California Nurses Association?
    pnkgirl25, Fiona59, chevyv, and 7 others like this.
  6. Visit  BelleMorteRN} profile page
    0
    Is this the first time wages have gone down and not came back up?? I thought nursing waxes and wanes, So when there is more jobs than nurses, pay will then go back up.
  7. Visit  Tragically Hip} profile page
    7
    They told us that nursing jobs could not be outsourced, and that nothing could stand in the way of the steady increase in those jobs, and that for reasons of limited faculty availability and the shortage of potential students who could make the grade and get in, a nursing career would be a one-way ticket to middle-class Easy Street. Hmm....

    Quote from TheCommuter
    Third, some middle-aged nurses with decades of experience have reported that their workplaces had terminated their employment to replace them with cheaper labor. In this economic climate, hospitals and other healthcare facilities are now able to hire nurses with less than five years of experience to replace employees with many years of experience who have topped out on the pay grid. A hospital can save money by laying off 25 experienced nurses who had been earning more than $40 hourly and fill the job openings with 25 less-experienced nurses who will work for less than $30 hourly.
    Isn't that a very obvious case of age discrimination? Wouldn't something that blatant be easily litigated?

    Quote from merlee
    But you can pay someone 20 bucks an hour and hope she knows what she's doing without any long-term staff around, or you can pay me 30 an hour and I can tell you to get the crashcart just by knowing what that cough is moments before the person drowns in their own CHF fluids. Your choice.

    Nurses have just become another place to cut costs.
    The sad fact is that maximizing the number of lives saved or providing the best outcomes for patients is not the priority. Certainly it's not in the case of for-profit hospitals — the owning corporation's fiduciary responsibility to its shareholders outweighs all other considerations. Perversely, that seems to be nearly as true (sometimes equally true) for non-profits, many of which are run like for-profit corporations. It's a mystery how they maintain their 501(c) status, but their CEOs are making too much money to care.
    Not_A_Hat_Person, gswifty, Fiona59, and 4 others like this.
  8. Visit  Esme12} profile page
    6
    Quote from Belle Morte
    Is this the first time wages have gone down and not came back up?? I thought nursing waxes and wanes, So when there is more jobs than nurses, pay will then go back up.
    The amount of nurses practicing waxes and wanes......the salary never has. Unitl now.
    chevyv, kcmylorn, imintrouble, and 3 others like this.
  9. Visit  xoemmylouox} profile page
    8
    Age discrimination is easy to hide. You simply say they broke some lame policy and bye bye career. I have seen this time and time again at my work. Fire or push out everyone with experience and hire someone 10-20 years behind them in age/experience. It's downright scary. Who are the new grads to learn from?
    Fiona59, steffuturelpn, Jessy_RN, and 5 others like this.
  10. Visit  TheCommuter} profile page
    8
    Quote from Tragically Hip
    Isn't that a very obvious case of age discrimination? Wouldn't something that blatant be easily litigated?
    The companies who get rid of older, highly experienced employees who have topped out on the pay grid would never openly admit that age discrimination was a factor in the decision to terminate employment. They usually conjure up bogus reasons to shove 'older nurses' with decades of experience to the wayside to make room for nursing staff with less experience.

    The corporate world can be masterful at avoiding litigation by saying the right things to avoid the courtroom altogether.
    Chiggysmom, Jessy_RN, Lovely_RN, and 5 others like this.
  11. Visit  Esme12} profile page
    3
    tragically hip
    they told us that nursing jobs could not be outsourced, and that nothing could stand in the way of the steady increase in those jobs, and that for reasons of limited faculty availability and the shortage of potential students who could make the grade and get in, a nursing career would be a one-way ticket to middle-class easy street. hmm....
    "they" have outsourced for years......http://www.gpo.gov/fdsys/pkg/bills-1...12hr1929ih.pdf, imported care: recruiting foreign nurses to u.s. health care facilities the middle class is syringing.

    isn't that a very obvious case of age discrimination? wouldn't something that blatant be easily litigated?
    no......they are just downsizing. they are "restructuring". hospital administrations are very good at manipulating data for their benefit.
    the sad fact is that maximizing the number of lives saved or providing the best outcomes for patients is not the priority. certainly it's not in the case of for-profit hospitals-the owning corporation's fiduciary responsibility to its shareholders outweighs all other considerations. perversely, that seems to be nearly as true (sometimes equally true) for non-profits, many of which are run like for-profit corporations. it's a mystery how they maintain their 501(c) status, but their ceos are making too much money to care.[/
    non-profit is a tax status.......not that administrations are gratuitous by nature.
    Not_A_Hat_Person, Fiona59, and kcmylorn like this.
  12. Visit  Tragically Hip} profile page
    1
    Quote from esme12
    tragically hip
    "they" have outsourced for years......http://www.gpo.gov/fdsys/pkg/bills-1...12hr1929ih.pdf, imported care: recruiting foreign nurses to u.s. health care facilities the middle class is syringing.
    ahh, but that's not outsourcing, like customer support line jobs. that's in-sourcing, which they didn't tell up about.

    Quote from esme12
    no......they are just downsizing. they are "restructuring". hospital administrations are very good at manipulating data for their benefit.
    they lay off 25 people virtually all at once, followed by hiring 25 younger people? that kind of pattern is hard to bury, even for a very clever company.

    companies may have lots of good lawyers, but they are not invincible. a friend of mine from school who became a litigator has demonstrated that, and he himself has a small office. nurses may often have it bad, but you should see what some companies do to their employees in order to make a little more profit.

    Quote from esme12
    non-profit is a tax status.......not that administrations are gratuitous by nature.
    as i said elsewhere, i don't know how some organizations maintain their 501(c3) status. they may not have shareholders, but they're run just like for-profit corporations.
    steffuturelpn likes this.
  13. Visit  imintrouble} profile page
    12
    There may not be formal data to bolster claims of wage deflation, but it's happening where I work. In small ways.
    1) Reduce the number of recognized holidays so premium wage is not paid.
    2) Eliminate the 1.5 call back pay that has been the rule since I was hired < 10 years ago.
    3) No w/e differential anymore.
    4) Automatically subtract an hour each shift for lunches and breaks. Then demand staff jump through hoops/sign forms, if a lunch was not taken. Also there is the veiled threat of retaliation if you demand being paid for a lunch you work through.
    5) Cutting hrs of the more experienced/higher paid nurses, while new nurses work overtime.
    6) All continuing education must be completed during your scheduled shift. No coming in on your day off, or staying over to get it done.
  14. Visit  chuckster} profile page
    4
    Wage deflation and benefits erosion should not be unexpected. For at least the last five years, nursing schools have been turning out record numbers of graduates. That alone would tend to cause at least wage stagnation, if not outright deflation, but at the same time, many experienced nurses were forced to postpone their retirements as their 401k's dropped in value along with those of their spouses. In some cases, the spouse lost his or her job and if they were lucky enough to find a new job, it almost certainly paid less and offered fewer benefits than the previous one. Many large health care and hospital corporations either saw their patient insurance reimbursements drop, putting severe strain on profits. Most made decisions to preserve those profit levels by reducing costs, often in the form of reducing nursing staff (thus increasing patient-nurse ratios). So we really have a perfect storm in place in terms of nursing wages ( nursing is far from alone in this - most other occupations and professions are experiencing something similar).

    I've posted this before but in my region - the fifth largest metro area in the country - the BLS data show that nursing employment declined from 43,740 in 2005 to 42,820 in 2009. At the same time, the PA Board of Nursing website showed that there were 1,822 new grad RN's in the region in 2005 rising to 2,142 in 2009. Keep in mind that these are first time NCLEX test pass numbers and the actual number of new RN's is likely to be somewhat higher than the figues used above. It's also relevant to note that the population in the region grew slightly over that period. With a clear oversupply of nurses, significant downward pressure on nursing wages and benefits has to be the inevitable result. I have not looked at other parts of the country but the anecdotal evidence I've seen leads me to believe that something similar is occuring in most larger SMSA's.

    It is also worth noting that nursing school enrollment, and presumably the number of new RN's, continues to grow. Since there is little changed about the economy, we should not expect to see nurses retiring in great numbers. And there is continued pressure to increase corporate profits. Nursing wage deflation and the erosion of benefits should continue and perhaps even accelerate for the foreseeable future.
    NRSKarenRN, Tragically Hip, tewdles, and 1 other like this.


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