NEWS AND TRENDSCAREER CENTEREDUCATION
 

 

Frozen assets
For nurses, a solid financial future remains elusive as salaries fail to keep up with inflation

By Heather Stringer
June 4, 2001
Photo: Artville

 
   
 

Whether nurses have spouses who add to the family income, almost all the RNs interviewed for this article agreed on one thing: They are not adequately compensated for
what they do.

 
 

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Brad Warden, RN, still is trying to understand why he earns only a little more than half as much as his wife.

Warden spent five years in college obtaining his degrees while his wife, Amy, went to college for a couple of years. He works as a critical care nurse in the cardiac ICU at University Hospital in Oklahoma City. Amy runs a dog grooming business. Warden earns about $37,500 per year—before taxes—and he’d lose about $5,200 a year if he didn’t work night shifts. His wife earns about $60,000 annually.

Thanks to his wife’s business, Warden, 29, said his family of four has enough money to live comfortably.

Paul Shaffer, RN, and his wife, Nancy, who live in Fort Worth, Texas, don’t enjoy the same financial cushion. They chose to live on Paul’s salary to allow Nancy to stay home with their two children. This decision has demanded a lifestyle of careful budgeting and occasional seasons without vacations or dinners at restaurants when unexpected expenses gobble up the monthly "fun" allotment.

Whether nurses have spouses who add to the family income, almost all the RNs interviewed for this article agree on one thing: They are not adequately compensated for what they do. Average hospital nurse salaries in 2000 ranged from $38,456 to $49,088, depending on the region of the country, according to a survey conducted by Nursing2001 magazine.

"The salaries are disappointing for how much work nurses do and the level of responsibility on the job," Warden said. "I’m totally frustrated."

Hospital administrators couldn’t agree more, said Rick Wade, senior vice president of the American Hospital Association. "I do not know a hospital executive who would not like to raise nurse salaries."

Although hospitals administrators and nurses may concur that RNs deserve higher incomes, the two camps don’t align on how to generate money for these salary increases.

Wade said that unions shouldn’t spend their time picketing hospitals that are losing money—which included more than one-third of the facilities in the country in 1999, according to MedPAC, the Medicare Advisory and Payment Commission. He favors uniting the two sides to lobby Congress for more reimbursement from programs such as Medicare.

But nurse union leaders challenge the idea that hospitals have no money to spare. They argue that facilities could find money for nurse salary increases by cutting steep administrative salaries and stepping up hospital efficiency.

These salary tensions are reminiscent of union battles in another service-oriented profession: teaching. Teachers and nurses earn remarkably similar salaries, according to www.salary.com.

The site reports that in Houston, for example, half the teachers can expect to earn between $38,647 and $56,211, and half the registered nurses can expect to earn between $39,765 and $55,782.

Although the salary range is comparable for the two professions, nurses have at least one disadvantage when it comes to fighting for higher wages: Only 10 percent nationwide are in unions, according to the California Nurses Association. By comparison, 75 percent of teachers are unionized, the National Education Association reports.

Fewer nurses are in unions largely because many work for private hospitals, which more often are opposed to unionization than the public institutions that employ teachers, said Charles Idelson, a spokesman for the California Nurses Association.

But nurse unions garner more clout as the shortage increases demand for RNs, said Diane Sosne, president of Service Employees International Union 1199NW, a nurse union in Washington state. The most recent National Sample Survey of Registered Nurses also provides fodder for union bargaining power. It reveals that RN salaries stopped keeping up with inflation beginning in the mid-1990s—the first time that has happened since the survey was started in 1980.

When RN salary increases sank below the inflation rate, more and more nurses considered leaving their jobs, said Peter Buerhaus, Ph.D., RN, FAAN, associate dean for research at Vanderbilt University. At the same time, working conditions worsened when managed care systems forced hospitals to cut spending.

As a result, nurses began to leave their jobs. Many could afford to resign because more than 70 percent were married, often to spouses who had high-paying jobs in the booming economy of the late 1990s, Buerhaus said. "When RN wages fell below the market rate of inflation, this led nurses to feel that their time was more valuable spent at home," Buerhaus said.

But Shaffer is one RN who didn’t have that option.

His income supported his wife and two children. He made $28,000 a year as a staff nurse in the early 1980s at Cook Children’s Medical Center in Fort Worth. To stretch his income, Shaffer learned how to fix his own cars, and his family usually watched movies on video instead of shelling out money at the theater. If they had to pay a deductible to repair damage from a fender bender, the Shaffers wouldn’t eat out or go on a vacation for a period of time.

Yet Shaffer, 47, doesn’t complain about his salary. "I’ve never been without," he said. "I’ve always been comfortable."

At one point, he took a managerial job as a director of transport and his salary jumped to the $70,000 range. But the position demanded 12-hour workdays, and he wanted more time with his family. He decided to return to staff nursing despite the pay cut to $52,000 a year.

He not only took a salary dive, but also has topped out on the salary scale because he has completed all the requirements that earn bonuses, such as continuing education, teaching and research.

"Raises would be nice," Shaffer said. "I don’t think anybody likes to hear that they are maxed out in an area."

Lelynne Waltman-Knight, RN, works at Cook Children’s in the pediatric intensive care unit. Like Shaffer, she’s hesitant to complain about her salary of $28 per hour, but still this leaves her with little extra. Waltman-Knight earns more than her husband and the couple is raising a 6-year-old son.

Five years ago, when there was damage to the foundation of their home, she learned it would cost more than $6,000 to repair. She cried for days and had to borrow from her retirement account to afford the repairs.

Some nurses are turning to per diem work to save money for these kinds of expenses. Per diem jobs pay more by not offering benefits. An increasing number of RNs are starting to juggle permanent jobs—where they can receive benefits—and per diem jobs at other facilities, said Sue Driscoll, MS, RN, vice president for hospital operations and patient services at Exempla St. Joseph Hospital in Denver.

This option is particularly attractive to new nurses, who start at $16 to $17 per hour at St. Joseph, but can earn $24 per hour working per diem.

But this trend creates more frenzy when hospitals have to find substitutes for nurses who call in sick, Driscoll said. RNs are using their free time to work per diem at other facilities and aren’t available to fill in at their permanent jobs. RNs also are more exhausted at their permanent jobs.

"The per diem trend makes for a tired workforce," Driscoll said. "Everyone is running like crazy."

Nurses drawn to higher salaries also stress rural hospitals, which are scrambling to compete with wages earned at nearby metropolitan facilities, said Brandon Melton, vice president for human resources at Catholic Health Initiatives. Nurses at Mercy Medical Center in Nampa, Idaho, were disgruntled because they could earn $2 more per hour at hospitals in Boise, a large city 20 minutes away.

Mercy’s administrators decided to cut programs that were not in high demand—such as an inpatient drug and alcohol recovery program—and direct the money to RN increases.

"It’s been difficult, but we decided to compete head to head with the bigger hospitals," said Audra Sinigiani, director of human resources at Mercy.

Union leader Sosne points to additional ideas for saving money in hospitals.

"We feel that hospitals aren’t superefficient and have too many layers of management," she said. "Salaries for administrators are outrageous."

Salary figures for the last two years suggest that the efforts of Sosne and other nurse union leaders are paying off. Nurse salary increases were higher in 2000 than 1999, according to the Nursing2001 survey.

About 20 percent received raises of 4 percent to 5 percent in 2000, compared to only 16 percent in 1999. Fewer had raises of only 2 percent to 3 percent. In the Southwest, average yearly salaries for hospital nurses increased from $37,406 in 1999 to $41,024 in 2000, Nursing2001 reported.

But Wade of the AHA argues that RNs should direct their efforts toward lobbying the government for more reimbursements instead of battling with hospitals. He challenges that nurses aren’t fighting the government "because it’s easier for unions to deal with hospitals instead of doing the hard work of working with the government. They get more headlines by picketing in front of hospitals, but what good does it do to ram against hospital administrators if they have no money?"

Whether hospitals have money for salary increases, many facilities are finding ways to pay nurses extra. At Warden’s hospital in Oklahoma, nurses can earn up to $2,200 more per year by earning certification in their specialty and working as a preceptor or in-service teacher, said Pauli Marr, MS, RN, senior nursing officer at University Health Partners in Oklahoma City.

The hospital also plans to start a referral bonus program that will reward nurses $2,000 for referring another nurse to the hospital. They’ll receive half the money up front and half after the new employee has stayed for six months. The newly recruited nurse also would receive $2,000.

Swedish Medical Center in Seattle has experimented with a program that pays an employee a bonus of $5,000 for referring another RN to the hospital. The new hires do not receive a bonus, and the recruiting nurse is left to decide whether to share the bonus. The hospital ran the program from February through April and hired more than 25 RNs—twice the number the hospital usually hired in a three-month period when the bonus was only $1,000.

For Waltman-Knight, a similar incentive led her to refer her husband for a radiology technologist position at her hospital. She received a $5,000 bonus, and her husband received a $5,000 sign-on bonus.

But Warden hasn’t cashed in on any such bonuses, and frustration is mounting. He’s working harder than ever to train new hires as nurses continue leaving his unit.

"When I’m not overwhelmed, nursing is enjoyable," he said. "But the longer I work in health care, the more I want to get out." He’s considering a career in computer science, which could pay $80,000 a year working on computer systems for hospitals.

Although many nurses echo Warden’s discontent, Shaffer offers a different tack on nurse salaries. "I never entered the profession thinking I’d be rich," he said. "I feel like nursing is my calling and I enjoy helping people."

 

 

 

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