$15 Min Wage - Effect on RNs

[FutureDNP2021]

$15 Minimum Wage increases are expected to hit our nation, coast to coast, in the near future. I am concerned that my financial sacrifices & years of educational investments to become a nurse will be highly devalued once minimum wages are doubled around the country.

I am predicting that the higher $15 minimum wages will cause costs of everything else to increase (food, rent, services). Salary earners (RNs) making above minimum wage, will not get raises, yet our cost of living will dramatically increase (eventually by double in most cases, in order to offset the higher cost of minimum wage employees). This all will be fine for minimum wage workers, but I fear that because I make above minimum wage, I will see my budget cost of living budget increase by 1/3 or more and will no longer be able to afford to pay back my student loans once all this happens.

Then comes the bad credit debt & never owning a home & never being able to retire & this snowballs into my college career has been self-destructive, God help us all ...

I would like to hear other nurses input and opinion on the matter, if nothing else but to help me from catastrophizing this ~ Thank You

[SummitRN, BSN, RN]

Large Minimum Wage (MW) increases tends to:

1. Offer some short term gains for MW workers offset by higher unemployment

2. Have little to no effect on the upper 1%

3. Screw everyone else in the long term through inflation

Allow me to explain:

1. Some MW workers will gain greatly from an increase in MW for obvious reasons, but it isn't so simple because some will lose their jobs due to automation (a machine that was too expensive vs $8/hr labor might be quite affordable vs $15/hr labor) or use of the labor black market (people working off the books). Others MW workers who are on many social programs with income caps will actually cut their labor hours so as not to lose those handouts. It is a hard and fast rule that increased MW = increased unemployment. Eventually the resulting inflation erases the standard of living gains from increasing MW (and unemployment falls).

2. Those at the top adjust where needed and feel little impact.

WHAT ABOUT RNS? HERE IS THE ANSWER:

3. Short answer: For everyone else, including RNs, your standard of living falls relatively quickly and recovers very slowly if ever.

Long answer: INFLATION is the reason. The basic necessities rise in price when the amount of minimum amount of labor most anyone needs to purchase them seems to fall, but there are fixed amount of those goods, prices rise. Or prices simply rise because the guy making a sandwich had their salary doubled. Well the price of your sandwich went up. Simple economics 101. So now you have rising dollar costs for basic goods and services that trickles to all other goods and services.

But did the RN's wages go up?

Can a RN can go to management and say "we need our wages increased 100% too!"? NO! You will get laughed at. They won't have to do that. They don't need to. There may be some small increases down the road as standard of living falls drastically enough for their to be major pressure, but it won't be enough to catch up with inflation.

Eventually, you run into labor pool problems where people go "wait, why should I spend huge $$$ and 4 years of my time on a BSN so I can start as a new nurse at $23/hr when I can keep working for $15/hr at a low responsibility job without college debt?" Then you see labor shortages and wages rise (or standards fall). But that correction is a nice thing for economists to think about, and a crappy experience if you are in that labor pool! And if there is another MW hike, it delays that recovery!

Lastly, it is worth noting that large MW hikes are hardest on the lower middle class and middle class in small cities, suburban and rural areas. The big big cities have market driven effective MW well above the current legal MW already.

Massive minimum wage hikes are a feel-good populist measure pushed mostly by those who are ignorant of economics... and the few that do know the above but do not care because of a sociopolitical agenda. Massive MW hikes are BAD economic policy.

[gilversplace]

Not every state pays good like California, here in the south starting for nurses are bottom $20s. I even heard few years ago below 20 for no experience

[Mhsrnbsn]

While it is unfair in the beginning, you need to keep in mind businesses will not lost money. One of two things will happen... They will push the cost of labor onto the consumer by increasing the cost of the goods... Or they will replace as much minimum wagers as possible, say hello to more self check out lanes, and touch screen ordering at food places. I'll be honest Id be a little insulted if minimum wage went up to 15.00 and I am still at 23.00... I worked hard for that degree and spent a lot of money to get there. Now to see people that may not aspire to be much else will have it easier? Hell what's stopping nurses from taking a pay cut and having less responsibility? Personally, in areas where the 15.00 would put them close to nursing don't be shocked to see an even worse nursing shortage.

[Elektra6, ASN, BSN, RN]

I'll be making a few bucks more than minimum wage. I'm a RN.. The years in school and debt will not be worth it. I'd probably have more money and sanity working at target for $15 with no student loans and less of my paycheck going to taxes. [emoji52]

I loved my time working at Target, can't wait to go back! Seriously, I wonder what will happen to HHA who rely on State sponsored programs to get paid (currently $11 for my pt).

[pixiestudent2]

California's minimum wage is already $10 and I still make more than five times that despite starting in a new role at a entry-level wage. You're suggesting increasing it to $15 is going to dramatically devalue my experience and increase my cost-of-living?

Some nurses only make $5 an hour more than $15...

I'm no economist, so I don't know what the overall effect would be.

With that said, I don't care if it's increases.. I just don't think it's fair, but such is life.

[That Guy, BSN, RN, EMT-B]

Ill quit and work at mcdonalds.

[bugya90, ASN, BSN, LVN, RN]

Not every state pays good like California, here in the south starting for nurses are bottom $20s. I even heard few years ago below 20 for no experience

California pay is actually not that great when compared with their cost of living. My house cost $120,000 here in Texas. A similar house in California would cost well over $500,000. Yes in the south our hourly wages are lower across the board, but our cost of living is significantly less.

[SummitRN, BSN, RN]

California pay is actually not that great when compared with their cost of living. My house cost $120,000 here in Texas. A similar house in California would cost well over $500,000. Yes in the south our hourly wages are lower across the board, but our cost of living is significantly less.

Regional differences are why we have a low national MW. States and cities can do set their MW higher if local cost of living demands it.

To double the national minimum wage in a stroke is economic idiocy.

[emtpbill, ASN, RN, EMT-P]

Seeing 15 dollar MW nationwide is far off, if ever.

First off, the value of the dollar would probably drop. To compensate the federal government would raise interest rates. So even though the MW workers would be making about double the MW currently, they wouldn't realize a real increase in buying power.

Second, the companies that use most MW workers would slash their workforce and go to automation. They probably would be able absorb the cost of doubling MW initially but would have to raise prices to continue to make a profit.

As the above is happening all of the other sectors of jobs would start to want increases to compensate for the falling value of the dollar.

This all becomes a nasty circle.

Don't fret, it will not happen.

[caliotter3]

I have already been told outright by an employer that they have no intention of raising the wage of their LPN/LVN employees to keep them at a minimal par above minimum wage. Since there are already CNAs around the area who earn more, it comes as no surprise, especially when one observes the continuing number of nurses being pumped out by the proprietary schools on every city block. The nurses who stop working out of principle will not be missed at all.

[caliotter3]

I'll be making a few bucks more than minimum wage. I'm a RN.. The years in school and debt will not be worth it. I'd probably have more money and sanity working at target for $15 with no student loans and less of my paycheck going to taxes. [emoji52]

Unfortunately, Target, like many others, schedules employees in 4 hour blocks, making it impossible to achieve a decent paycheck from them, and making it next to impossible to make up the missing blocks of hours with another employer.

[Wrench Party]

Don't worry, the 1% will figure out how to keep their wealth and eventually screw the rest of us on all the other economic rungs of the ladder. Until then, I'm not too worried about minimum wage increases affecting my earnings- it would be nice to see my fellow NAs, for example, make what they're actually worth.