Nursing wages across states: comparative analysis

Nursing Wages in Indiana

According to the principles of economics "Recognizing that people face tradeoffs does not by itself tell us what decisions they will or should make" (Mankiw, p. 4). In the labor market, nurses may trade-off more relaxed atmospheres in smaller hospitals, where they are not paid as well, for higher-paying positions in big-city hospitals where they are always busy and under pressure. Such is the case in Indiana, where, compared to the California annual mean wage of $65,100 and the Maryland mean wage ($63,070), only 31-34% of nurses earn this much. Licensed Practical Nurses in Indiana earn $32,428 to $38,890.

You'd think that with the unemployment rate near 5% and productivity growth so strong, employers would be anxious to raise payrolls and would have plenty of headroom to raise wages," he said. "But they're not," said Bradford DeLong, an economist at UC Berkeley (Greenhouse, p. 1). Nursing positions have always been filled by a captive labor market: women. Women in the post-war years had few choices for jobs besides teaching or nursing. But today women make up 48.5% of medical students, and earn 47.5%of the law degrees. World-wide, a nurses' role has changed from doing simple domestic jobs for patients to therapeutic and holistic care. Society has changed and with population growth, social welfare and the changing scene in the healthcare industry has influenced nursing and the role of women. During the next generation women will fill new occupations, while nursing has remained behind the times. There are shortages in rural areas and numerous states have implemented programs such as loan forgiveness to lure nurses to less desirable areas (Statistico, para. 4).

Since the turn of the century, higher wages, unemployment, and private-sector pushes to increase numbers of nurses resulted in strong employment growth of registered nurses. Older women and foreign-born nurses make up a large share of the growth. But younger people, especially women in their early thirties, and men make up a large part of the employment growth in the industry. "Yet, despite the increase in employment of nearly 185,000 hospital RNs since 2001, the evidence suggests that the current nurse shortage has not been eliminated" (Buerhaus, p. 1).

Total nursing employment increased from 2001 to 2002 5.1%, adding 100,000 RNs, with all of this growth occurring in hospitals. Contributing to this growth in employment of registered nurses were a 4.9% increase in nurses' earnings in 2002, developing private-sector initiatives which threw a positive light on nursing, and rising unemployment rates, affecting earnings and the job security of nurses' spouses. (Buerhaus, p. 2).

By 1980, women in Indiana held most of the jobs seen as traditional "women's jobs," 40% in professional and managerial positions, with 7,100 nurses among them. Today, in Indiana, health care is still a major employer. In 2006, in most counties, health services made up 12.6% of all industry employment and paid 13.6% of the payroll. In this industry are half of the biggest employers. In northwest Indiana, only 16 employers hire more than 1,000 employees each, and nine hospitals provide the highest-paying positions with benefits.

The Indiana State Nurses Association was founded for Indiana's registered nurses. "The Association was organized in 1903 to secure a nurse practice act to protect the citizens of Indiana." Nurses in Indiana are also represented by the American Nurses Association, headquartered in Washington, D.C. And the International Council of Nurses, based in Geneva, Switzerland. These organizations now investigate health facilities and help control the wages of nurses.

Governments can sometimes improve market outcomes, according to the 7th principle of economics. The state government is busy helping improve the shortage situation in the state of Indiana. The Indiana Department of Workforce Development has recently developed something called the Strategic Skills Initiative (SSI), which has identified three occupations which may develop shortages. The three occupations include registered nurses; the other two are pharmacists and pharmacist technicians. If it follows national trends, the largest shortage is expected to be in nursing, where there is a desperate need for 250 more workers in the state. Because of this, SSI is giving funds for adding faculty to the schools of nursing at Purdue University and other Indiana University regional campuses. Indiana tries to be on the cutting edge of improvement for nursing. "Indiana was the seventh state to have registration for nurses. It was the first law of its kind passed west of the Appalachian Mountains; it was the first law for women put through by women" (Allen p. 54).