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GAO Finds Benefits and Pay Factors in Nursing Shortage

Wed, 05/23/2001 - 12:00am — Karen Stevenson
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The General Accounting Office (GAO) has prepared a report on the national nursing shortage. They point out in their report that the shortage is very real, and is not likely to improve anytime soon. For instance, the average age of a registered nurse (RN) increased from 37 in 1983 to 42 in 1998. At the same time, the population as a whole is aging, so demand for nurse aides is expected to grow dramatically. The availability of nurses in the future is not likely to get any better. Between 1995 and 1998, enrollment in baccalaureate programs declined 19%, and enrollment in master's programs decreased 4%.

Hiring and retention of nurse aides is a also a significant problem for many providers, with some studies reporting 100% turnover rates for aides working in nursing homes. The nurse aide shortage is so severe that in 1999, 30 states indicated that they were addressing nurse aide recruitment and retention through task forces, initiatives, and research. This shortage is also going to get worse. By 2008, the overall number of nurse aide jobs is projected to grow an additional 36%, compared to the 14% projected growth in all jobs, and jobs for nurse aides working in home health care are projected to by 58%.

Part of the problem is the poor wages and benefits that most aides receive. In 1999, the national average hourly wage for aides working in nursing homes was $8.29, compared to $9.22 for service workers and $15.29 for all workers. For aides working in home health care agencies, the average hourly wage was $8.67, and for aides working in hospitals, $8.94. GAO analysis of CPS data indicates that many nurse aides have such low earnings and family incomes that they qualify for public benefits such as food stamps and Medicaid. They found that one in three aides working in nursing homes earned less than $10,000 per year, and 36 percent reported family incomes below $20,000.

As one way to address the wage differential, as of 2000, 26 states had established some form of a wage pass-through, wage supplement, or related program for nurse aides and other direct care staff, but the GAO raised concerns that funds may not be used as intended, and point out that few states have addressed the issue of benefits for nurse aides. According to a 1999 study, only three states had considered or taken action to require any form of benefits for nurse aides and other workers.

Nursing Home Nurse Aides Home Health Nurse Aides All Service Workers All Workers
Number Employed 695,570 344,200 -- --
Income Below Poverty Level 18% 19% 16% 11%
Lack Employer Health Insurance 42% 53% 48% 38%
Lack Employer Pension 75% 79% 79% 56%
On Medicaid 10% 11% 7% 4%
Using Food Stamps 14% 15% 9% 6%

Source: General Accounting Office (GAO) analysis of data from the Bureau of Labor Statistics (BLS) Current Population Survey (CPS) and Occupational Employment Statistics (OES), May 2001.

The General Accounting Office (GAO) has prepared a report on the national nursing shortage. They point out in their report that the shortage is very real, and is not likely to improve anytime soon. For instance, the average age of a registered nurse (RN) increased from 37 in 1983 to 42 in 1998. At the same time, the population as a whole is aging, so demand for nurse aides is expected to grow dramatically. The availability of nurses in the future is not likely to get any better. Between 1995 and 1998, enrollment in baccalaureate programs declined 19%, and enrollment in master's programs decreased 4%.

Hiring and retention of nurse aides is a also a significant problem for many providers, with some studies reporting 100% turnover rates for aides working in nursing homes. The nurse aide shortage is so severe that in 1999, 30 states indicated that they were addressing nurse aide recruitment and retention through task forces, initiatives, and research. This shortage is also going to get worse. By 2008, the overall number of nurse aide jobs is projected to grow an additional 36%, compared to the 14% projected growth in all jobs, and jobs for nurse aides working in home health care are projected to by 58%.

Part of the problem is the poor wages and benefits that most aides receive. In 1999, the national average hourly wage for aides working in nursing homes was $8.29, compared to $9.22 for service workers and $15.29 for all workers. For aides working in home health care agencies, the average hourly wage was $8.67, and for aides working in hospitals, $8.94. GAO analysis of CPS data indicates that many nurse aides have such low earnings and family incomes that they qualify for public benefits such as food stamps and Medicaid. They found that one in three aides working in nursing homes earned less than $10,000 per year, and 36 percent reported family incomes below $20,000.

As one way to address the wage differential, as of 2000, 26 states had established some form of a wage pass-through, wage supplement, or related program for nurse aides and other direct care staff, but the GAO raised concerns that funds may not be used as intended, and point out that few states have addressed the issue of benefits for nurse aides. According to a 1999 study, only three states had considered or taken action to require any form of benefits for nurse aides and other workers.

Nursing Home Nurse Aides Home Health Nurse Aides All Service Workers All Workers
Number Employed 695,570 344,200 -- --
Income Below Poverty Level 18% 19% 16% 11%
Lack Employer Health Insurance 42% 53% 48% 38%
Lack Employer Pension 75% 79% 79% 56%
On Medicaid 10% 11% 7% 4%
Using Food Stamps 14% 15% 9% 6%

Source: General Accounting Office (GAO) analysis of data from the Bureau of Labor Statistics (BLS) Current Population Survey (CPS) and Occupational Employment Statistics (OES), May 2001.