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Average staff nurse wages increase but below the rate of inflation.

When the Bureau of Labor Statistics released statistics on the final calendar year 2012 average wages for hospital staff nurses, there were some reasons to be optimistic. Although the post-recession quarters exhibited some losses in inflation-adjusted average wages, the recession quarters were above the trend going back to 2002. If those inflation-adjusted wages were only stable, it was clear that the value of fringe benefits for staff nurses seemed to continue to increase. Inflation-adjusted wages beat inflation by half of one percent. Not fantastic, but solid.

The first and second quarter data from 2013 doused cold water on those hopes. Using 2012 as a baseline for inflation-adjusted dollars, average annual staff RN wages in private hospitals have dropped from $73,580 in the last quarter of 2008 to $70,765 in the second quarter of 2013. Inflation-adjusted annual fringe benefits also declined over that time frame, dropping from $33,485 to $32,662. Further, while the ratio of fringes to wages had increased from 29 percent to 31 percent from March 2002 to December 2008, that ratio peaked in September 2012 and appears headed downward as real wages also head downward.

On average, paychecks continue to rise in money wages. However, the trend line in nominal wages flattened just before the official recession ended in June 2009. The graph below brings all of those trends onto a single image. The light blue line represents nominal wages, the money that shows up in paychecks (before taxes). With only a few hesitations those money wages have continued to climb from March 2002 through June 2013. However, the curve heels over right around December 2008. Up to that quarter, the trend of average money wages was increasing at 3.6 percent per year. As the economy moved into 2009 and beyond, the trend dropped to a 1.5 percent annual increase.

The dark blue curve in the graph represents inflation-adjusted annual wages. Tracking from 2012 onward, one can observe a positive slope (much assisted during late 2008 when the Consumer Price Index actually fell during the last quarter of the year). Inflation-adjusted wages last exceeded the trend in December 2011. Incorporating data from the 2013 quarters to date just makes the inflation-adjusted wage picture darker. Through 2012, the trend slope was 0.51 percent; through June 2013 that trend drops to 0.38 percent. In fact, a new trend in inflation-adjusted wages emerged in December 2008 when the increase in nominal wages slowed. This is depicted with the red line on the wage graph. The new trend is an average annual decrease in real wages of 0.77 percent.

2013 has also seen a slowdown in national hospital hiring aggregated across all job categories. At the end of 2012 and in the initial months of 2013, hospitals increased employment (compared to the same month in the prior year) by more than one percent each month. However, this year's growth in hospital jobs decelerated almost every month dropping and remaining below one percent beginning in July.

We can only hope that hospitals steer carefully through this period. The recovery from the recession has been anemic, but there remains a slowly increasing pulse in the economy at large. Baby Boomers will continue to age into Medicare (at the rate of 2-3 million new eligibles every year through the rest of the century), a population that requires hospitalization at twice the rate of the non-elderly. The Affordable Care Act subsidized and newly insured will likely seek primary care more so than hospital care, but they will also tend to augment hospital demand. However, as the economy recovers, many mature RNs who have deferred their retirements will finally retire. Hospitals should be continuing to hire some new grad RNs to maintain stability into the next few years. It is possible that average RN wages--both nominal and inflation-adjusted --will appear to decline as the mix of RN vintages changes to a new, younger equilibrium. As the retirements become effective for the one million RNs who entered the profession during the late 1970s and early 1980s, hospitals will have to become more aggressive in hiring new RNs.

This article appeared on ANA NurseSpace (www. in September 2013.

By Peter McMenamin, Senior Policy Fellow American Nurses Association
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Title Annotation:Nursing Practice
Author:McMenamin, Peter
Publication:Georgia Nursing
Date:Nov 1, 2013
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