2003 Earnings Survey: The outlook is bright - - ModernMedicine

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The outlook is bright

JEFF BAUER, SENIOR EDITOR

KEY WORDS: nursing shortage, earnings, overtime, union membership, Nurse Reinvestment Act

Nurses' earnings continue to improve as employers use raises to retain staff and address the nursing shortage.

The nursing shortage may be continuing, but that's good news for nurses as far as earnings are concerned, according to the results of our latest biennial earnings survey. Most RNs saw a 10% hike in pay—a slightly smaller increase than the 14% gain reported in our last survey, two years ago. However, unlike then, this recent increase came without a corresponding increase in the number of hours worked.

Also encouraging is this: About half of the respondents say that, in light of the current nursing shortage, their employers have taken steps to retain nurses, mostly in the form of raises (66%) or improved benefits (31%).

How long the current nursing shortage will continue is unknown. Although enrollments in entry-level programs at nursing colleges were up 8% in the fall of 2002 compared to the previous year, it will take several years before this generation of RNs reaches the workforce. The American Association of Colleges of Nursing believes this increase won't be sufficient to meet the projected demand for nurses over the next decade.¹ In fact, the U.S. Bureau of Labor Statistics projects that by 2010 there will be more than 1 million job openings for RNs; more than 500,000 of these openings will be new ones.²

So begins the first installment of our two-part earnings report. (Part two focuses on benefits and will appear in next month's issue.) Findings are based on the results of our survey, which was mailed to 6,400 nurses; 2,450 nurses replied, yielding a response rate of 38%. Unless otherwise stated, the information reported here applies to both full- and part-time RNs who work in acute care hospitals.

Increases continue for salaried and hourly RNs

Since our last survey, annual earnings increased for both salaried nurses and those paid by the hour. The average annual income for nurses paid hourly is now $47,445, an increase of $4,490 (10%) since 2001; salaried nurses, who typically work in management and administration, now average $65,125, a gain of $5,745 (10%). When the incomes of both hourly and salaried nurses are considered together, their average yearly income is $49,835—a $4,075 increase.

Continuing a trend established over the last few years, a larger percentage of nurses are in the upper ranges of the earning scale. Three out of 10 nurses (29%) earn $60,000 or more, while only 18% earned that much two years ago, and a mere 11% did so in 1999.

The gap between the hourly pay rates of part-time and full-time RNs has widened again, after shrinking slightly two years ago. Part timers, who traditionally earn slightly more per hour but are less likely to receive health insurance and other benefits, earn an average of $27.25 per hour; that's $3.00 per hour more (12%) than in 2001. Full-time RNs earn about $25.85 per hour, or $2.30 per hour more (10%) than two years ago. The average hourly rate for part timers is now $1.40 more than that of full-timers; in 2001, the gap between part- and full-time rates was half that—70 cents.

It's no surprise that full-time RNs earn considerably more per year than part timers. This year's survey shows that difference has gotten even greater. Full-time RNs now earn an average of $55,510—$21,315 more than the $34,195 earned by part-timers. This difference is $2,650 greater than the $18,665 gap in annual income observed in 2001.

Two years ago, nurses' gains in income reflected the fact they had worked more hours—on average, two additional hours per week. In this survey, nurses report a slight decrease in the number of hours worked. Including overtime, full-time RNs work an average of one hour less per week—and part timers work two fewer hours per week—than they did in 2001.

Pay scale varies by setting, specialty

Nurses who work in acute care hospitals usually earn more than those who work in other settings, and nurses in physicians' offices typically earn the least. This year's survey shows that trend has held true.

The average income for acute care nurses is $49,835, up 9% ($4,075) since 2001, while nurses who work in physicians' offices make $36,255, or $3,565 (11%) more than two years ago. This $13,580 gap in annual income between the two groups is $510 more than the one reported in our 2001 survey.

Compared to nurses in other settings, RNs who work in acute care appear to be gaining greater ground salary-wise. Nurses in the second highest-paying setting, extended care/psychiatric, earn $45,330—only $1,965 (5%) more than two years ago. Nurses who work in acute care now earn $4,505 more than those in extended care/psychiatric; in our last survey, that difference was only $2,395.

When it comes to specialty, OR nurses still earn the most per hour: $27.05, an 11% increase since 2001. However, RNs in all other specialties except OBG/newborn saw greater increases in hourly pay. ICU/CCU and ambulatory surgery/outpatient nurses now earn an average of $26.60 per hour—up 16% and 14%, respectively, since our last survey. ED nurses now earn $26.10 (up 12%) and med/surg RNs earn $25.65 (up 13%). At $25.55 (up 7%), OBG/newborn nurses now earn the least.

The size and type of hospital affects pay as well. Hospitals with 300 – 499 beds still pay the most ($27.15 per hour), and those with 500 or more beds pay nearly as much ($27.10); two years ago, the difference between the two was 35 cents. Hospitals with fewer than 100 beds still pay the least: $24.10 per hour.

Nurses who work in suburban hospitals still make more per hour than those in urban hospitals—$27.55 vs. $27.05. Earning $23.50 per hour, nurses in rural hospitals make the least.

Age and experience affect earnings

The average age of the nurses who responded to our questionnaire is 45—the same as in our 2001 survey. As you would expect, older and more experienced nurses make more than their younger and less experienced colleagues. RNs 50 and older earn an average of $27.85 per hour and $53,525 per year, which is $5.20 per hour and $10,130 per year more than RNs who are younger than 30. RNs with more than 15 years' experience earn $28.05 per hour and $52,775 per year—$5.90 per hour and $10,660 per year more than those with fewer than three years' experience.

That said, younger and less experienced nurses did better than their older and more experienced counterparts when it came to the increase they saw to their income over the last two years. Compared to 2001, RNs who are younger than 30 earn 14% more per hour and 15% more per year, while nurses 50 and older earn 10% and 9% more, respectively.

This pattern held true for less experienced versus more experienced RNs. Those with fewer than three years' experience earn 19% more per hour and 24% more per year than they did two years ago. RNs with more than 15 years' experience earn only 10% and 8% more, respectively.

Having more education doesn't necessarily translate into higher pay. Nurses with diplomas earn the most ($26.85 per hour and $49,180 per year), followed by those with a BSN ($26.55 and $48,900) and those with an associate's degree ($24.80 and $47,200). In 2001, BSN nurses earned the most.

But taking on added responsibilities by working as a charge or head nurse still pays off. Head nurses earn an average salary of $61,285 per year, which is $9,190 (18%) more than in 2001; charge nurses earn $52,840 (up 12%) and staff nurses receive $45,650 (up 10%).

Amount of overtime hasn't changed much

Of the full-time RNs who responded to our survey, 72%—about the same percentage as two years ago—say they work at least some overtime. On average, full timers who are paid overtime work an additional seven hours per week—the same as in 2001. Part-time nurses who get overtime work an average of four additional hours per week, which is one hour less than they did two years ago. More than three-quarters of nurses (77%)—slightly more than two years ago—say they are paid time-and-a-half for overtime.

Overtime has long been a controversial subject for nurses. Technically, federal law exempts nurses from overtime pay; yet, as hourly workers, most RNs do receive overtime. The U.S. Department of Labor has proposed changes to the Fair Labor Standards Act that define who is and isn't entitled to receive overtime pay.³ The American Nurses Association opposes the proposed changes because it believes they could result in the loss of overtime pay for many RNs. The ANA also believes that the changes could lead to an increase in the use of mandatory overtime.⁴ The deadline for public comment on the proposed changes was June 30; a final ruling is not likely until 2004.

The effect of unions and geography

Sixteen percent of RNs belong to a union. This percentage hasn't changed much in more than a decade.

Union membership still means better pay. Union nurses' average annual income is $55,620, which is 13% more than that of nurses not represented by unions. That's up slightly from 2001, when union RNs earned an average of 11% more than their nonunion counterparts.

Likewise, where you live has an impact on how much you'll earn. RNs in the Far West no longer receive the highest mean hourly rate; they earn an average of $28.20 per hour, or 65 cents (2%) less per hour than in 2001. The highest rate goes to RNs in New England, who get $28.50 per hour, an increase of $4.45 (19%) since two years ago. At an average hourly rate of $24.30, nurses in the Plains States earn the least.

The difference in average hourly rate between the highest- and lowest-paying region is getting smaller. In the past two surveys, it was slightly less than $9.00; in this survey, it was only $4.20.

No matter where nurses live, though, salary is but one factor shaping the professional landscape during today's nursing shortage. Besides benefits (which we'll cover next month), government initiatives are also playing a role. Overall, RNs are earning more now than they did two years ago, without having to put in additional hours. But raising salaries is only one strategy being used to address the nursing shortage. In February, Congress approved $20 million in funding for nurse eduction programs. For example, the Nurse Reinvestment Act, which President Bush signed into law in August 2002, provides scholarships and loan repayments for nurses who agree to work in areas most affected by the nursing shortage.⁵ It also includes loan cancellations for nursing faculty, grants for geriatric nurse education, and the use of public service announcements to promote nursing as a career.

As we went to press, funding for these programs and others like them had not been allocated. If properly funded, these programs have the potential to not only improve nursing education and help alleviate the shortage by drawing more people to the profession, but to ultimately increase the quality of the care patients receive.

REFERENCES

1. American Association of Colleges of Nursing. "Though enrollments rise at U.S. nursing colleges and universities, increase is insufficient to meet the demand for new nurses." 2002. www.aacn.nche.edu/Media/NewsReleases/enrl02.htm (17 July 2003).

2. Steinbrook, R. (2002). Nursing in the crossfire. N Engl J Med, 346(22), 1757.

3. U.S. Department of Labor. "U.S. Department of Labor proposal will secure overtime for 1.3 million more low-wage earners." 2003. www.dol.govopa/media/press/esa/ESA2003146.htm (17 July 2003).

4. American Nurses Association. "ANA protests measures to undermine overtime protections." 2003. www.nursingworld.org/news/ananews.htm (17 July 2003).

5. U.S. Department of Health and Human Services, Bureau of Health Professionals. "Nurse reinvestment act of 2002." 2002. http://bhpr.hrsa.gov/nursing/reinvesttext.htm (17 July 2003).

Nurses' income continues to rise

Nurses who are paid an annual salary and those paid by the hour both saw their earnings increase by 10% since our 2001 survey. Salaried RNs now make an average of $5,745 more, and hourly wage earners $4,490 more, than they did two years ago. Twenty-nine percent of all nurses now earn $60,000 or more, compared to 18% in 2001.

Annual nursing income	All nurses	Salaried nurses	Nurses paid by the hour
$85,000 or more	4%	18%	2%
80,000 – 84,999	2	6	1
75,000 – 79,999	3	6	3
70,000 – 74,999	4	12	3
65,000 – 69,999	6	6	6
60,000 – 64,999	10	9	9
55,000 – 59,999	8	9	8
50,000 – 54,999	12	11	13
45,000 – 49,999	12	8	12
40,000 – 44,999	12	6	13
35,000 – 39,999	10	5	10
30,000 – 34,999	5	1	6
25,000 – 29,999	5	2	5
Less than $25,000	7	1	9
Mean	$49,835	$65,125	$47,445
Unless otherwise noted, the figures in this chart and those that follow have been rounded and apply to both full- and part-time RNs working in acute care hospitals. Source: 2003 RN Salary Survey, July 2003, conducted by Thomson Medical Economics Research Services, Montvale, N.J. Figures for earlier years are from prior RN surveys.

Part-time RNs earn more per hour

Part-time nurses typically make more than full timers. They now earn an average of $1.40 per hour more, which is double the difference reported in 2001.

Hourly pay rate	Full timers who earn it	Part timers who earn it
$35.00 or more	6%	8%
34.00 – 34.99	2	2
33.00 – 33.99	2	2
32.00 – 32.99	4	4
31.00 – 31.99	3	4
30.00 – 30.99	3	5
29.00 – 29.99	2	3
28.00 – 28.99	5	6
27.00 – 27.99	6	5
26.00 – 26.99	6	6
25.00 – 25.99	8	9
24.00 – 24.99	6	9
23.00 – 23.99	9	10
22.00 – 22.99	9	8
21.00 – 21.99	7	5
20.00 – 20.99	6	6
19.00 – 19.99	6	2
18.00 – 18.99	4	3
17.00 – 17.99	3	1
16.00 – 16.99	2	1
Less than 16.00	1	1
Mean	$25.85	$27.25

Which setting pays best?

Acute care nurses still earn more than those in other settings, and the difference between their annual income and that of their colleagues in extended care/psychiatric, the second highest-paying setting, has nearly doubled. Office RNs earn 11% more than they did in 2001, but they still make the least.

Setting	Average annual nursing income
Acute care	$49,835
Extended care/psych	45,330
Ambulatory care center/HMO	45,310
Health insurance company/school/other	44,215
Community/home health	43,645
Physician’s office	36,255

OR nurses earn the most

Once again, OR nurses report earning more per hour than any other specialty. Med/surg nurses no longer receive the lowest hourly rate. OBG/ newborn RNs do; they saw the smallest increase in hourly rate (only 7%) since our last survey.

Specialty	Average hourly pay
OR	$27.05
Ambulatory surgery outpatient	26.60
ICU/CCU	26.60
ED	26.10
Med/surg	25.65
OBG/newborn	25.55

Pay is affected by hospital profile

While medium-sized (300 – 499 beds) hospitals still pay slightly more than large facilities, the difference is only 5 cents per hour. The difference in hourly rates between suburban and urban hospitals is unchanged at 50 cents.

Bed size	Average hourly pay
500 or more	$27.10
300 – 499	27.15
100 – 299	26.65
Fewer than 100	24.10
Location
Suburban	27.55
Urban	27.05
Rural	23.50
Type of hospital*
Community nonprofit	26.40
Private, nonprofit	26.85
Private, for-profit	25.05
*RNs who work in university hospitals reported an average hourly wage of $28.45. Those who work in public hospitals reported an average hourly wage of $25.50. Due to insufficient sample sizes, these figures are not included in the above chart.

Bigger gains for younger, less experienced RNs

As expected, age and experience bring higher pay. However, since 2001, salaries for young and less experienced nurses have risen disproportionately, in comparison to the salaries of their older, more experienced counterparts. Perhaps, in response to the nursing shortage, hospitals are raising starting salaries to attract new nurses. Compared to two years ago, RNs under 30 earn 15% more per year, while those 50 and older earn 9% more. Nurses with fewer than three years' experience earn 24% more per year than they did in 2001, while those with more than 15 years' experience earn 8% more.

Age	Average hourly pay	Average annual nursing income
Under 30	$22.65	$43,395
30 – 39	24.85	45,140
40 – 49	26.50	50,090
50 and older	27.85	53,525
Years of experience
Fewer than 3	$22.15	$42,115
3 – 5	22.45	45,800
6 – 10	24.85	44,700
11 – 15	25.80	49,560
More than 15	28.05	52,775
Education
Diploma	$26.85	$49,180
Associate’s degree	24.80	47,200
BSN	26.55	48,900