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

The Nursing Workforce: Shortage Or Surplus?

The long-term effects of nursing supply subsidies are demonstrated by current data compiled by the DHSS Bureau of Health Pro fessions within the Health Re sources and Services Administra tion in eight National Sample Surveys of the Registered Nurse (NSSRN) population between 1977 and 2004 (DHSS, 2004). According to the 2004 survey, there were an estimated 2,909,467 RNs in the United States as of March 2004. Of these, 16.8% or 489,790 were not employed in nursing. Of those RNs who were not employed in nursing, many were retired and others had left for family reasons. However, an estimated 209,140 to 241,563 RNs left "for personal career reasons..." or "...reasons connected to the workplace" (DHSS, 2004).

Measurements and statistical analysis of any workforce are difficult to perform because workforces are constantly in motion. The total number of nurses licensed in the United States and their demographics such as age can be obtained from state board of nursing databases, but nurses may work across state boundaries and may be licensed in more than one state. Also, the workforce itself constantly fluctuates in response to large economic factors (macroeconomics) such as government policies or small economic factors (microeconomics) such as the behavior of individual nurses in response to what employer is paying what compensation for what services (Hall & Taylor, 1993).

Therefore, those who compile and analyze workforce data rely on a variety of scientific sampling methods, surveys, and estimates. Unfortunately, exact data to answer exact questions are not always available and we have to interpret what we have. For example, it is not yet known exactly how many nurses were needed in 2004 to fill all the vacant positions. However, from the 2004 NSSRN we do know that by March 2004 well over 200,000 nurses had left nursing and were working in other career fields due to their dissatisfaction with the nursing career field or because some other career field offered more competitive compensation such as better wages, benefits, working conditions, or a combination of all three (DHSS, 2004).

Even though the exact shortage of nurses for 2004 is not yet known, based on other recent data over 200,000 nurses working in other career fields almost certainly ex ceeded the supply shortage in 2004. In 2000, nurses working in other career fields did in fact exceed supply shortages. In that year, the demand for nurses was estimated to ex ceed supply by 110,000 (Buerhaus, Donelan, Ulrich, Norman, & Dittus, 2006). Yet from the 2000 NSSRN, we know that approximately 136,000 nurses had left nursing for other occupations — a surplus of 26,000 nurses (DHSS, 2006). Simi larly, in 2002 demand was estimated to exceed supply by 135,000 (Buerhaus et al., 2006) as nurses continued to leave for other occupations so that somewhere be tween 136,000 and 200,000 nurses worked in other career fields that year (DHSS, 2006).

Whatever the exact numbers, it is evident that there is actually a surplus of nurses when all men and women who are currently licensed nurses but working in other occupations are included in the count. The significance of this point merits emphasis because it contradicts the prevailing notion that the best solution to the nursing shortage is to increase nurse supply subsidies. The significance becomes even more poignant if policymakers have the nurse workforce chasing its own supply tail with subsidies that provide new, inexperienced nurses to take the place of those who have left because the subsidies lowered compensation in the first place and will eventually chase away many of the new nurses as well.

Probably the most insidious of all supply subsidies is called the voucher, and it illustrates how good intentions can tamper with labor market forces to make the shortage worse. A voucher is typically a contractual agreement that provides for the expenses of much or all of the nurse's education in exchange for a specific period of employment in a known nurse shortage area (Senate of the United States, 2002). Politic ally, this makes sense because it pleases constituents, and it seems like a logical way to force a shift of nursing labor to known nurse shortage areas. Economically, however, such vouchers allow employers in nurse shortage areas to continue to provide compensation at below fair market value in ex change for a trickle of nurses who will tolerate a couple of years of marginal compensation in ex change for free education. This is what Teitelbaum refers to as the effects of tampering with the natural wage mechanism (Weinstein, 2006).

In a separate analysis, Sochalski (2002) evaluated comprehensive data from the 1992, 1996, and 2000 NSSRN surveys and adds the observation that increasing numbers of nurses never work as nurses after graduation, choosing other career fields instead. The most common reasons given by nurses for working in other fields according to Sochalski were better hours, better pay, and more rewarding work. Sochalski also notes that nurse wages remain flat in real terms, despite periods of shortage that would lead to increased compensation in a labor market that is free of tampering.


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