The Economic
Benefits of
Addressing the
Nursing Shortage on DC US
As state governments, colleges and universities, and others work to address the national nursing work force shortage and associated costs, it is critical to quantify the cost-benefits of reducing the shortage in Southern Regional Education Board (SREB) states and communities. The shortage of registered nurses is widespread in the 16 SREB states and the District of Columbia. It cuts across many urban, rural or socioeconomic areas. And its impact is enormous. No other professional group is in higher demand than nursing, and no other single group offers the economic benefits of the nursing profession. Alleviating the nursing work force shortage makes sound economic sense.
Sheer numbers tell the story. Business Week reported in a 2006 cover story that the primary engine fueling the U.S. economy is health care — not information technology, energy or other industries, including real estate. The demand for health care and skilled health care workers is expected to sky- rocket as the U.S. population ages. As the article points out, health care is highly personnel-intensive, and registered nurses are the largest personnel group in the industry. Therefore, state and community leaders who seek a larger, more viable economic base simply cannot afford to ignore the labor shortage in this predominant sector.
Growing communities need more registered nurses to serve their population, and registered nurses are among the most desirable and beneficial workers in a community. Currently, considerable efforts are made by many community and government leaders to recruit new industries to a specific locale, yet many of those industrial employees are relatively unskilled, minimum-wage earners. Their “return” in economic and tax benefits to the community and state ranks far below those of a high-demand, highly skilled nursing work force.
Research shows that the lesser economic benefit of these lower-wage workers trickles down only to the surrounding community.
In contrast, addressing the nursing shortage benefits the entire region since the shortage is so wide-spread and nurses earn higher wages. Registered nurses are highly educated and technically skilled professionals, many with annual salaries above $50,000. As higher-paid employees, registered nurses pay more local and state taxes, contributing to a larger degree to the economic well-being of their state.
With higher wages, they are also more likely to buy more food and clothing, professional services, gasoline and other goods, and engage in more travel and entertainment, thus contributing to the economic vitality of a great number of other businesses. The higher salaries paid to nurses trickle down to benefit many others inside and outside of their surrounding communities.
1
In sum, more registered nurses mean more revenue. Included in this report is a table highlighting the projected shortage of registered nurses in each SREB state and the District of Columbia. It shows the entry salary for those positions, the resulting state taxes that would be generated and the economic benefits if those positions were filled. If the shortage of registered nurses in the SREB region was resolved, the projected trickle-down economic benefit to local communities throughout the region would top $5 billion annually. Governments that collect state taxes would gain from $1 million to $12 million — or more — in new tax revenues.
For the past 40 years, through the SREB Council on Collegiate Education for Nursing, SREB has played an important leadership role in addressing the issues and needs facing nursing education. During this time, creating a larger nursing work force to care for state residents has grown into an urgent need. In particular, the Council calls attention to the serious nursing faculty shortage. The Council has monitored student enrollment and the characteristics of faculty in colleges and universities since 2001 and has repeatedly warned that the nursing shortage cannot be addressed without also addressing the nursing faculty shortage. Without additional faculty, a greater number of nursing students cannot be educated, and applicants will continue to be turned away. In fact, a 2006 Council survey found that 26,101 qualified applicants were denied admission to associate’s and bachelor’s degree nursing programs in SREB states and the District of Columbia that year, mainly due to lack of nursing faculty and facilities to teach them.
Since the late 1990s, the Council has called specifically for the nurse educator shortage to become a higher priority in each state. For the economic viability of our communities as well as the health of our people, it is essential — and increasingly critical — for SREB states and the District of Columbia to put reducing the shortage of the registered nurses and nurse educators at the top of the public agenda.
Sheer numbers tell the story. Business Week reported in a 2006 cover story that the primary engine fueling the U.S. economy is health care — not information technology, energy or other industries, including real estate. The demand for health care and skilled health care workers is expected to sky- rocket as the U.S. population ages. As the article points out, health care is highly personnel-intensive, and registered nurses are the largest personnel group in the industry. Therefore, state and community leaders who seek a larger, more viable economic base simply cannot afford to ignore the labor shortage in this predominant sector.
Growing communities need more registered nurses to serve their population, and registered nurses are among the most desirable and beneficial workers in a community. Currently, considerable efforts are made by many community and government leaders to recruit new industries to a specific locale, yet many of those industrial employees are relatively unskilled, minimum-wage earners. Their “return” in economic and tax benefits to the community and state ranks far below those of a high-demand, highly skilled nursing work force.
Research shows that the lesser economic benefit of these lower-wage workers trickles down only to the surrounding community.
In contrast, addressing the nursing shortage benefits the entire region since the shortage is so wide-spread and nurses earn higher wages. Registered nurses are highly educated and technically skilled professionals, many with annual salaries above $50,000. As higher-paid employees, registered nurses pay more local and state taxes, contributing to a larger degree to the economic well-being of their state.
With higher wages, they are also more likely to buy more food and clothing, professional services, gasoline and other goods, and engage in more travel and entertainment, thus contributing to the economic vitality of a great number of other businesses. The higher salaries paid to nurses trickle down to benefit many others inside and outside of their surrounding communities.
1
In sum, more registered nurses mean more revenue. Included in this report is a table highlighting the projected shortage of registered nurses in each SREB state and the District of Columbia. It shows the entry salary for those positions, the resulting state taxes that would be generated and the economic benefits if those positions were filled. If the shortage of registered nurses in the SREB region was resolved, the projected trickle-down economic benefit to local communities throughout the region would top $5 billion annually. Governments that collect state taxes would gain from $1 million to $12 million — or more — in new tax revenues.
For the past 40 years, through the SREB Council on Collegiate Education for Nursing, SREB has played an important leadership role in addressing the issues and needs facing nursing education. During this time, creating a larger nursing work force to care for state residents has grown into an urgent need. In particular, the Council calls attention to the serious nursing faculty shortage. The Council has monitored student enrollment and the characteristics of faculty in colleges and universities since 2001 and has repeatedly warned that the nursing shortage cannot be addressed without also addressing the nursing faculty shortage. Without additional faculty, a greater number of nursing students cannot be educated, and applicants will continue to be turned away. In fact, a 2006 Council survey found that 26,101 qualified applicants were denied admission to associate’s and bachelor’s degree nursing programs in SREB states and the District of Columbia that year, mainly due to lack of nursing faculty and facilities to teach them.
Since the late 1990s, the Council has called specifically for the nurse educator shortage to become a higher priority in each state. For the economic viability of our communities as well as the health of our people, it is essential — and increasingly critical — for SREB states and the District of Columbia to put reducing the shortage of the registered nurses and nurse educators at the top of the public agenda.
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