Rising Wages for Nurses? Nanny State to the Rescue
The New York Times had an article today that could have badly used a bit of economic analysis. The article reports on a provision in the Senate immigration bill that removes the cap on the number of nurses who can enter the country each year.
The problem, as described in the article, is that the country faces a large and growing shortage of nurses. The decision to turn to immigrants is striking, since this is not what Congress did to meet the large shortages of doctors, lawyers, accountants, economists, CEOs and other occupations that draw very high wages. In other words, the Senate is making a decision to consciously try to depress the wages of nurses, in a way that it has not done for other professions that command high wages.
It would have been reasonable to ask why nurses are being singled out in this way. There certainly is no economic argument for holding down the wages of nurses but not the wages of workers in more highly paid occupations.
posted by Dean Baker @ 4:53 PM
13 Comments:
At 9:31 PM,
Anonymous said…
It would have been reasonable to ask why nurses are being singled out in this way.
I bet your neighborhood AMA representative has an answer....
At 10:06 PM,
James Schipper said…
Dear Mr Baker
Aren't many American doctors foreign-born? I know that Canada is busy stealing doctors from South Africa. Personnally, I think that it is immoral for developed countries to import highly trained professionals from less developed countries.
As to lawyers, they are a special case because laws are different from country to country. What a foreign doctor or engineer learns can't be much different from what an American doctor or engineer learns, but what foreign lawyers learn can be quite different from what their American counterparts learn.
Regards. James
At 12:53 AM,
Steve Sailer said…
I've been reading in the newspapers about "the nurse shortage" for as long as I've been reading newspapers.
At 8:56 AM,
Erik L said…
Actually Steve, my memory is more of a cycle. Hospitals try to save money by giving some nursing duties to lower level assistant types and fire lots of nurses. A few years later hospitals notice they have a shortage of nurses (because people stopped going into the profession while it was so abused) and then we start seeing commercials on TV urging young people to train as nurses. Then hospitals realize how expensive all these nurses are and they seek relief again.
Of course people like our host musty bear some of the blame. For years they have berated us for the high cost of healthcare in the US. Is it any wonder that hospitals and government officals seek to cut costs?
As for depressing the wages of doctors, I think you'll find that has already been done to a great extent by thrid party payers. Doctors are the only profession in America (I think) with (effectively) wage and price controls.
At 10:03 AM,
Anonymous said…
As I pointed out elsewhere, nursing salaries are hardly as low as many people think. Here in the New York metro area hospitals start registered nurses at more than $60K per year. Nursing homes pay even more as the work's less desirable. Considering that one can become qualified as a nurse in two years at the local community college, it's not bad at all. Most BA-holding cubicle drones don't make as much.
Peter
Iron Rails & Iron Weights
At 11:18 AM,
Todd said…
The Center for Global Development picked up on this article too, slightly different take: http://blogs.cgdev.org/globaldevelopment/2006/05/nurse_drain_a_problem_think_ag.php
At 1:54 PM,
Half Sigma said…
Nursing is truly a job that Americans with delusions of upper-classness don't want to do.
They'd rather work in a cubicle for $30K in hopes that they one day may be promoted rather than work as a nurse and get a guaranteed decent income.
It's hard to explain, but somehow I do buy into the theory that we if need to importat any job from overseas, it's nurses.
At least nurse immigrants have to pass tests so we know they understand English and aren't stupid.
At 2:51 PM,
knzn said…
Arguably, Congress is trying to correct a market failure. Doctors, lawyers, CEOs, etc. are well-paid because their labor markets function efficiently. (Actually, I suspect they don’t function very efficiently, but there are no shortages, because non-market forces happened to set their wages near – or above – equilibrium levels.) There is a shortage of nurses because their labor market is not functioning efficiently: wages have not risen enough to clear the market.
At 12:04 PM,
Nurse Ratchet said…
While nurses in the U.S. are underpaid for the work they do and the responsibilities they have, they definitely make more than enough to live comfortably. The reason there's a nursing shortage here is because the government would rather engage in the short-term solution of recruiting foreign nurses, instead of fixing the problem from within the country (giving more money to nursing schools to hire more qualified nursing instructors).
It's not that people do not want to become nurses. Last year over 150,000 qualified prospective nursing students were turned away from schools because there simply isn't room for them (I think the NYT article said that). Most two-year programs have long wait lists, and 4 year programs are expensive.
However, outsourcing nurses from developing countries is unethical in several ways. Many foreign nurses do not know English very well, do not know our culture, stick to their own cohorts in hospitals--distancing themselves from colleagues, and think of their job as merely a source of money. they don't think of it as a job that involves caring for patients. This hurts patients more than it hurts anyone else. The patients are not receiving the care that they deserve and are paying for when someone can't even speak their language and isn't able to interact with them effectively (because the nurse doesn't look at this foreign person as a "person," just a money-making device). I know this from working in hospitals that recruit foreign nurses.
While I completely support people's rights to immigrate to the U.S., the nursing profession is an ethical one--just like medicine. It's not like outsourcing computer engineers or telephone company workers. It involves people's lives. Recruiting companies and hospitals should not actively recruit people from foreign, developing countries who wouldn't otherwise want to come to the U.S. on their own.
At 1:56 PM,
knzn said…
“…students were turned away…4 year programs are expensive…” If nurses were paid enough, prospective students could afford to borrow money for the 4-year programs, and 2-year schools could also charge more and would find it profitable to hire more instructors (even at higher salaries). From the point of view of economic analysis, the source of the problem is the failure of nursing wages to rise sufficiently. The fact (assuming it is a fact) that there is a shortage means, by definition, that nurses are paid less than the market-clearing wage. Maybe subsidizing nursing education is a reasonable solution, but as an economist, I’m troubled by the existence of the problem in the first place. I guess wages are sluggish. And sexism may also be an issue, since nursing is a traditionally female occupation. (I’m guessing that, if most nurses were men, their employers would feel more comfortable paying six figures, and we’d be talking about health care costs rising too quickly rather than about a nursing shortage.)
At 10:02 AM,
Anonymous said…
just a comment......... as a critical care registered nurse, i think it's a disgrace that for my knowledge, responsibilties, empathy, and degree of physically demanding labor, i make far less than someone who runs numbers through a program and follows simple protocols to get someone a mortgage. they can make more than my entire months salary on one deal!! why is there a shortage? because people see this trend. good nurses leave the profession because you can do less and make more. face it money talks! oh, i wonder if business running medicine has anything to with it? hmmm.
At 1:59 AM,
Anonymous said…
Disgusting? A nursing union in San Francisco is proposing a salary increase of over $140000 (no mistake…SIX DIGITS) this month!! That's more than the doctors working there!
At 12:25 AM,
Anonymous said…
I'd like to see the people that think nurses do get paid enough or too much to work one day in my shoes. Then you can talk about nurses making a great salary. Nurses have huge responsibilities that goes further than you think, the job is physically, mentally, and emotionally draining but we love it that's why we do it. People that save lives deserve far more than we are paid, as opposed to someone making millions to play basketball or make a movie for instance. I know for a fact that managers of fast food places make just as much money as some nurses! Come on...
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