Those salaries can’t be real..can they?

What does the bureau of labor statistics (BLS) say about nursing salaries?

Within the profession, RN wages can depend on many factors, such as education level,  employment status as salaried or hourly, experience, specialization, labor laws affecting scope of practice, union status, practice position setting (ambulatory care, hospice, hospital, nursing homes/home health, insurance claims/benefits) and physical location (urban, suburban, exurban, and rural). However one common misconception seems to linger around the forum like a damp, cost-of-living, which has zero effect on RN salaries. More on that later.

RN Speciality	Salary ($)
Hospice	$68,000
Labor & Delivery	$69,000
Neonatal ICU	$71,000
Dialysis	$76,500
Oncology	$76,700
Operating Room	$77,600
Critical Care	$78,000

Why are nursing salaries so different across the country?

• Supply and demand. The demand for RN’s comes from several places such as (1) patient demand from an aging population expected to hit 80 million by 2050 ² – currently it stands closer to 40 million, (2) a RN shortage estimated by consulting firm McKinsey to reach between 200,000-450,000 by 2025 ³ (3) 10/10 of the top paying metro areas for RN are in California. The metro (urban and suburban) areas tend to have larger hospitals and more hospitals than the rural and exurban areas. Breakdown of hospital count by Centers for Medicare and Medicaid Services (CMS).

	State	# Hospitals
1.	Texas	395
2.	California	328
3.	Florida	179
4.	Illinois	174
5.	Ohio	163
6.	Pennsylvania	159
7.	New York	156
8.	Georgia	131
9.	Kansas	131
10.	Minnesota	127

• Unions – We won’t get into the positives and negatives of union membership, but one clear difference in union and non-union RN’s pay is about an extra $130 per week in earnings.⁴ The 2022 Medscape Nurses survey showed a difference of $7,000 between union and non-union RN’s ($93k versus $86k) and a $3,000 between union and non-union LPN’s ($55k versus $52k)⁵.

• State legislation affecting scope of practice and RN staffing ratios. For example, California passed Assembly Bill 394 in late 1999. It prohibited unlicensed nurses, aka licensed vocational nurse (LVN’s) from performing any of the following: ⁶
  1.   Administration of medication.
  2.    Venipuncture or intravenous therapy.
  3.    Parenteral or tube feedings.
  4.    Invasive procedures including inserting nasogastric tubes,
  5. inserting catheters, or tracheal suctioning.
  6.    Assessment of patient condition.
  7.    Educating patients and their families concerning the patient’s health care problems, including post discharge care.
  8. Moderate complexity laboratory tests
• The effect was two-fold; by limiting the functions LVN’s could perform, it increased the demand for RN’s in California. Furthermore, AB 394 set staffing ratios for RN’s ⁷. For example an intensive care unit (ICU) or neonatal intensive care unit (NICU) cannot be staffed at any RN to patient ratio lower than 1:2. At the other end a psychiatric unit can be staffed up to a RN to patient ratio of 1:6. By 2006, 10/10 of the highest paying metro areas for RN’s were located in, you guessed it, the sunshine state. California doesn’t seem to want to relinquish the crown. The image below is the list of the top 10 highest paying metro areas for RN’s in the most recent year available (2021).

Cost of living fallacy

Data from both the Medscape RN/LPN Compensation Report 2022, the 2020 National Nursing Workforce Survey surveys, as well as BLS data tell us that RN’s in urban and suburban areas earn higher wages (hourly and salaried). Economic theory suggests the hospitals which offer specialty care are more than likely located in urban or suburban areas. Many of those specialties pay higher than average salaries for RN’s. However, to test the hypothesis we will ask the following. If the cost-of-living were factored into an RN’s wages then we would expect to find every hospital located in an expensive (or above average), high-cost-of-living city offering higher than average salaries to attract RN’s. To gather the most expensive American metro areas, we got a list of the most expensive cities in North America from Expatistan.com. Comparing that list to a sampling from the 2021 BLS Occupational Employment and Wage Statistics (OEWS) data throws cold water on the cost-of-living hypothesis. Moreover, we’ve already established empirically that the 10 highest paying metro areas are in California, but they don’t all rank in the top for most expensive metro and suburban areas in the US. Above average and high cost-of-living cites like Miami, FL and Baton Rouge, LA. Below is a sample table of select cities in which RN’s earn below the median (50%) wage.

City	#RN’s	25%	50%	75%	90%
RN wage nationally	3.04 M	$61, 790	$77, 600	$97, 580	$120, 250
Miami-Ft Lauderdale-West Palm Beach, FL	53,110	$61, 420	$77, 030	$79, 700	$98, 780
Baton Rouge, LA	7, 180	$61, 260	$62, 680	$78, 070	$83, 140
Oklahoma City, OK	13, 670	$60, 740	$64, 420	$77, 840	$86, 220
Wichita, KS	6, 060	$58, 060	$61, 030	$75, 440	$78, 480
Nashville-Davidson-Murfreesboro-Franklin, TN	20,850	$61, 780	$63, 600	$79, 360	$100,900
Birmingham-Hoover, AL	17, 880	$49, 290	$61,650	$75,00	$79, 570

Conclusion

The verdict. While we can’t peek into how much overtime Ms. Rai works, what bonuses she’s paid, or other ways RN’s like her can earn additional income, it’s not uncommon for nurses in the Seattle-Tacoma-Bellevue, WA area to earn salaries in the high 90’s to low six figures. How do we know? We don’t. But the Bureau of Labor Statistics does. Here are the numbers. With over 35,000 RN’s, Seattle-Tacoma-Bellevue has more than half of the state’s total RN employment (62, 470), spread out over 89 hospitals. Below is a table comparing Seattle-Tacoma-Bellevue, WA with the US national averages across some different percentiles.

So what are your thoughts? Tomorrow will you storm into your manager’s office demanding a pay raise? Perhaps you’re furiously packing a suitcase as you list your home for sale because you’ve already decided on Seattle. Either way, send us a postcard. Growing up in the northeast, we’ve had enough polar vortex experiences to know full well that don’t do so well in the cold.

RN annual wage	10%	25%	50%	75%	90%
US national average	$59, 450	$61, 790	$77, 600	$97, 580	$120,250
Seattle-Tacoma-Bellevue, WA	$77, 500	$79, 230	$99, 030	$120, 160	$127, 620

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References:

1. Smiley, Richard A., et al. “The 2020 National Nursing Workforce Survey.” Journal of Nursing Regulation, vol. 12, no. 1 Supplement, 2021, p. 96. Journal of Nursing Regulation, https://www.journalofnursingregulation.com/action/showPdf?pii=S2155-8256%2821%2900027-2. Accessed 28 September 2022.
2. Ortman, Jennifer M., et al. “An Aging Nation: The Older Population in the United States.” U.S. Census Bureau, May 2014, https://www.census.gov/library/publications/2014/demo/p25-1140.html. Accessed 2 October 2022.
3. Berlin, Gretchen, et al. “Assessing the lingering impact of COVID-19 on the nursing workforce.” McKinsey, 11 May 2022, https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/assessing-the-lingering-impact-of-covid-19-on-the-nursing-workforce. Accessed 2 October 2022.
4. “Table 4. Median weekly earnings of full-time wage and salary workers by union affiliation, occupation, and industry – 2021 A01 Results.” Bureau of Labor Statistics, Bureau of Labor Statistics, 20 January 2022, https://www.bls.gov/news.release/union2.t04.htm. Accessed 28 September 2022.
5. Robbins, Roni. “Medscape RN/LPN Compensation Report 2022.” Medscape, 30 September 2022, https://www.medscape.com/slideshow/2022-rn-lpn-compensation-report-6015784#16. Accessed 3 October 2022.
6. “AB 394 Assembly Bill.” AB 394 Assembly Bill – CHAPTERED, http://www.leginfo.ca.gov/pub/99-00/bill/asm/ab_0351-0400/ab_394_bill_19991010_chaptered.html. Accessed 29 September 2022.
7. Kasprak, John. “CALIFORNIA RN STAFFING RATIO LAW.” California RN Staffing Ratio Law, 10 February 2004, https://www.cga.ct.gov/2004/rpt/2004-r-0212.htm. Accessed 29 September 2022..