The 2022 Wage-Gap Spiral: State and Federal action to Cap Nurses’ Pay
Economic Policy Brief #135 | By: Alexandra Ellis | February 15, 202
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Policy Summary
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As the pandemic comes to its third year, state legislatures across the US are looking to cap nurses’ pay. States are calling for local and federal regulation of nursing agencies who employ nursing home nurses and travel nurses. Proponents of capping agency nurses pay suggest there has been a significant increase of hourly wage for agency nurses.
They claim the agencies are “price gouging.” However, they ignore the fact that (1) inflation plays a role and demand is created by (2) regular staff at hospitals being overworked and underpaid for their time. Yet, regular staff are expected to work overtime during surges in unsafe conditions. During the pandemic, regular nurses are subjected to a very high staff to patient ratio.
Policy Analysis
Currently two states cap nurses’ pay: Massachusetts and Minnesota. During the pandemic, both states addressed inflation and demands by increasing their caps by 35 percent. For example, in Minnesota, legislators increased the cap to a max of 58.08/hour per hour and 99.90/hour for holiday pay.
Other state legislatures are advocating for limiting travel nurses’ wages. Connecticut, New York, and Pennsylvania are among these states. During the pandemic, Connecticut forbid profiteering off the COVID-19 emergency. A joint conglomerate in New York state including, New York State Health Care Facilities Association (NYSHFA) and New York State Center for Assisted Living (NYSCAL), tried to introduce legislation to limit state budget expenses available to pay nurse staffing agencies but failed.
In November of 2021, Pennsylvania Representative Timothy R. Bonner wrote in an open letter to the public showing intent to introduce legislation that caps travel nurses pay. This legislation proposal has the support of Pennsylvania Health Care Association (PHCA). The memorandum cites concern that nursing homes are struggling to afford agency personnel, such as travel nurses.
Nursing homes have lost many of their regular staff due to the demand from the COVID-19 pandemic. Regular staff cite unsafe working conditions for both patients and nurses as their main concern. Nursing homes and hospitals have had to additionally rely on agency health personnel because of employee burnout.
Representative Boomer asserts that nursing homes and hospitals were charged substantially more for agency personnel during the pandemic, taking advantage of Medicaid and Medicare reimbursements.
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As wages mushroomed, Representative Boomer argues that staffing agencies have depleted the Medicaid budget. Instead of addressing unsafe conditions for both patients and nurses, Representative Boomer thinks the best way to solve the problem is to cap wages. This argument ignores public health needs and inflation.
On the federal level, many individuals and health care groups are soliciting White House intervention. One letter sent to the White House had over 200 individuals demanding regulation of health personnel staffing agencies. Another letter involved groups like the American Health Care Association (AHCA), National Center for Assisted Living, LeadingAge and a coalition of long-term care and senior living organizations. Their letter to White House officials seeking Congressional reform to cap travel nurses’ pay. Like Representative Boomer, they cite price gouging as their main concern. Most recently, the AHCA contacted the Federal Trade Commission to help regulate and cap travel nurses’ pay.
Engagement Resources
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A petition on Change.org has been circulating social media and nursing blogs. This petition was created by Nurse Jane and Impact in Healthcare. It currently has over half-a million signatures with the goal of a million. The petition calls for safe staffing for patients and healthcare workers. They plan to send this letter to the Joint Commission. See link:
Impact in Healthcare, a nonprofit group, also has a GoFund me to help support educating people about what patients and nurses are experiencing during COVID-19:
https://www.gofundme.com/f/donate-impact-in-healthcare-to-keep-up-the-fight.
To learn more about the current wage-gap spiral from the Wall Street Journal Podcast: