The potential imposition of wage controls on nurses: a threat to nurses, patients, and hospitals

When there are shortages of RNs, hospitals and health care organizations in competitive nurse labor markets respond by increasing wages: some hospitals will respond faster and some will offer higher wages than others. The wage increase brings about two important short and long-run outcomes that, together, will increase the supply of RNs in the labor market. Because wage controls prevent the flexibility of wages to adjust, they can cause a shortage to develop when the demand for RNs is increasing (as in the 1970s), and wage controls will lengthen the duration of a shortage once it has begun. The impacts of prolonged RN shortages are multifaceted and destructive to nurses, patients, and hospitals. Looking ahead over the next 15 years when the demand for RNs is expected to grow by roughly 3% per year and the supply of RNs by much less than that, a new nursing shortage is projected to develop and reach a deficit of 285,000 RNs by 2020. The worst thing that could happen to the nursing profession would be to impose wage controls on nurses as this would prevent the needed short and long-run labor supply responses from developing and thereby eliminate the shortage.