Compensation of staff nurses employed in United States hospitals from 1960 to 1990

Abstract

<p>Compensation for registered nurses employed as staff nurses in nonfederal hospitals from 1960 to 1990 was studied. Significant events of hospital financing, professional efforts to improve wages and working conditions, and the changing demand for nurses were also examined. Historical method was used to gather and interpret data, construct a salary time series, and describe events affecting the interaction of supply, demand, and wages in the nurse labor market. Over thirty years, staff nurses experienced a 606% increase in actual salaries; however, when adjusted for inflation, real earnings grew only 82%. The range between minimum and maximum salaries increased from 20% to 50%, alleviating some wage compression. The cost of employer-offered benefits rose, although the hospital industry lagged behind the averages for both manufacturing and nonmanufacturing industries. Gains in nonwork compensation, such as vacation, holiday, and sick benefits, were negligible. The registered nurse labor pool grew more than threefold. Consistently two-thirds of all nurses worked in hospitals. The activity rate peaked at 80% in 1988 and continued to exceed the labor force participation for all U.S. women. Part-time work was the greatest factor affecting supply. Demand for hospital nurses also continued to rise. Expressed as vacancy rate, demand was an unreliable and probably inaccurate measure. Three-quarters of reported rates exceeded 10%, indicating shortage conditions. The hospital industry experienced frequent growth and retrenchment. Funding from the Hill Burton Act and Medicare and Medicaid created new demands for care and nurses. Federal government regulation was imposed through cost containment in the seventies and prospective payment in the eighties. Health care expenses continued to climb, and registered nurses were widely substituted for nonprofessional workers. The American Nurses Association steadfastly advocated for nurses' economic security. Salaries grew only slightly, however, and earnings never rose to a level that reduced demand for more expensive workers. Thus, the nursing profession missed opportunities to push for increases during shortages. Findings support the need for a standardized national minimum data set. The nursing profession must take bold steps to control the supply, redefine demand, and increase wages to correct the market for the nation's largest group of health care workers.</p>