For years we’ve read that the US faces a looming shortage of nurses. Shortfalls in the hundreds of thousands of nurses are routinely predicted. These predictions have been good for nursing schools, which have used the promise of ample employment opportunities to more than double the number of nursing students over the last 10 years, according to CNN.
Yet somehow 43 percent of newly-licensed RNs can’t find jobs within 18 months. Some hospitals and other employers openly discourage new RNs from applying for jobs. That doesn’t sound like a huge shortage, then does it?
But the purveyors of the nursing shortage message have an answer for that. Actually two answers: one for the short term and another for the long term. The near term explanation is that nurses come back into the workforce when the economy is down. Nurses are female and tend to be married to blue collar men who lose their jobs or see their hours reduced when the economy sours, we’re told. Nurses bolster the family finances by going back to work –or they stay working when they were planning on quitting. There’s something to that argument even if it’s a bit simplistic.
The longer term argument is that many nurses are old and will retire soon, just when the wave of baby boomers hits retirement age themselves and needs more nursing care. Don’t worry, the story goes, there will be tons of jobs for nurses in the not-too-distant future. This logic comes through again in CNN’s story:
Demand for health care services is expected to climb as more baby boomers retire and health care reform makes medical care accessible to more people. As older nurses start retiring, economists predict a massive nursing shortage [emphasis mine] will reemerge in the United States.
Not so long ago, the air was filled with dire warnings of an impending nursing shortage. By 2020, according to one widely-cited analysis, demand might exceed supply by as many as 800,000 nurses.
That analysis was made in good faith, and it was based on not-crazy extrapolations from thirty years’ worth of economic data.
But in many local labor markets in 2012, there’s no sign of a shortage. In fact, in some regions there’s evidence of a glut. A few months ago, the California Institute for Nursing & Health Care announced that 43 percent of people who received nursing degrees in California and 2010 and 2011 were not working as nurses.
I’m going to try to make some dimly-informed comments about the nursing labor market in the next few posts. But first, a few words about what it means to say that there is (or isn’t) a nursing shortage.
In this context, “nursing shortage” is used in an unsentimental labor-economics sense. A nursing shortage exists when employers are actively trying to hire additional nurses but are rubbing against supply constraints, as evidenced by:
rapidly rising wages
heavy use of temporary “agency” nurses to fill gaps on units
a greater-than-usual willingness to hire nurses with little experience or limited training
new investments in nurse-replacing technology
desperate 3 am phone calls from hospital administrators to college presidents, begging them to launch new nursing programs
To say that there is no nursing shortage today is not to say that all hospital units are adequately staffed for patient safety and decent quality of care. There is plenty of reason to believe that patients would be better off if hospitals invested in stronger nurse-patient ratios.
This month’s wretched jobs report tells a now-familiar tale: Employment has risen nicely in health care (a net gain of more than 340,000 jobs between May 2011 and May 2012). But almost every other sector has been flat or worse.
You might think that would mean that new-graduate nurses are having an easy time finding work. That’s still true in rural areas — but elsewhere, no.
In many U.S. cities, especially on the west coast, there’s real evidence of a nursing glut. The most recent survey conducted by the National Student Nurses’ Association found that more than 30 percent of recent graduates had failed to find jobs.
How is that possible?
While demand for nurses has been rising, it actually hasn’t risen as fast as most scholars had projected. Meanwhile, the supply of nurses has spiked unexpectedly, at both ends of the age scale: Older nurses have delayed retirement, often because the recession has thrown their spouses out of work. And people in their early twenties are earning nursing degrees at a rate not seen in decades. We’re now in the sixth year in which health-care employment has far outshone every other sector, and college students have read those tea leaves.
So what will happen next?
Here are crude sketches of two possible futures:
How many times have you read about the staggering shortage of nurses? It’s routine to see numbers in the hundreds of thousands tossed around – representing the seemingly insatiable demand for nurses from an aging population. I’ve always been suspicious of these estimates. First, it’s not how the economy works. We’re not really going to have 260,000 unfilled nursing positions in 2025. Either supply will rise, demand will fall or there will be a substitution of other kinds of labor or capital. Second, these numbers often come from interested parties, usually advocates for higher nurse pay and benefit or people who are running nursing schools and would like them to expand.
So I was struck by an article today that mentioned a glut of nurses, even in places like California that mandate minimum nurse staffing ratios. The situation is blamed on the recession, which depresses demand as hospitals and other nurse employers seek to control budgets, and also increases supply as nurses delay retirement, seek more hours, or return to work when a spouse is laid off. I’m sure there’a lot of truth to this, but if there is really such a big shortage it shouldn’t turn into a glut so quickly.
I don’t think employers of nurses are quaking in their boots due to the prospect of a gaping shortage of nurses. Although they might not say so openly (since everyone loves nurses) the forward thinking hospitals are planning for the day when nurses comprise a substantially smaller portion of their costs than they do now. They’ll do it with better decision support systems, workflow tools and robots that will take over many routine and high-skill nursing functions. Hospitals may seem capital intensive now, but I really believe there will be even more substitution of capital for labor in the future.
So if you’re betting on a giant nursing shortage in the year 2025 my guess is you’re going to lose.