Politics, Economics, and Nursing Shortages: A Critical Look at United States Government Policies

Rob Elgie, BSN, RN, BC


Nurs Econ. 2007;25(5):285-292. 

In This Article


Economic policies to address the shortage of registered nurses (RN) in the United States emphasize the use of nurse education supply subsidies in the form of grants, loans, and vouchers that have changed little during the past 4 decades. The first such subsidies began in 1964 in the Nurse Student Loan program en acted under the Title VI Civil Rights Act (American Association of Colleges of Nursing [AACN], 2006). Nurse supply subsidies have continued ever since, and are currently provided in the Nurse Reinvestment Act (NRA) HR 3847 under Title VIII of the Public Health Service Act signed by President Bush on August 1, 2002 (Senate of the United States, 2002). None of the current literature on the nursing shortage questions the prevailing recommendations to maintain and even increase nursing supply subsidies.

Supply subsidies circumvent the normal functioning of the labor market, depressing wages and other compensation to below fair market value (Weinstein, 2006). "Long term labor shortages do not happen naturally in market econ omies...they are created when employers or government agencies tamper with the natural functioning of the wage mechanism" (1990 congressional testimony of Dr. Michael S. Teitelbaum, as cited by Weinstein, 2006, p. 2). An examination of 42 years of nursing supply subsidies and how they have affected the natural wage mechanism for nurses, pushing qualified nurses into other career fields and preventing any significant shift of the labor force toward nursing, is presented.


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