You go to your local grocery store and discover that your favorite yogurt has just doubled in price. For a lot of reasons, this new price represents the sum of all the steps required in making it available to you at this grocery store on this day. Normally this might not concern you, but today it does so you put the yogurt back and go on shopping. You understand that others are willing to pay that price, which is fine, still for any host of reasons that price doesn’t work for you. Does the yogurt get upset that you don’t want it at that price? Would you care if it did?
Now there is a ton of economic complexity to this little parable. Is it a need or want, are there substitution effects at play, and more. The point isn’t as much about the potential purchaser, you, but in the yogurt. The yogurt has no opinion as to if you pick it up or not, nor does it get upset when you place it back on the shelf, the yogurt has no opinion at all. From the yogurt/store perspective, all that matters is should you want it badly enough, that you pay for it, no emotion anticipated or required.
There are about 3.2 million RNs in the US, 61% work in hospitals. Though hospitals have commanded a larger percent of RN employment in the past, the influence of hospitals on RN labor force dynamics remains important. Nurses tend to point to acute care experience as clinical validation, and often a source of pride, and herein lies the rub, hospitals know this.
Hospitals know if they manage their comparative clinical perception in a community, they can attract nurses at a lower marginal cost than other facilities deemed less prestigious, and these differences can be significant, as much as 25% less, and more. This discounted cost to the hospital is forgone income to the RN, all for the self-esteem benefit of saying that they’re a “name your facility” nurse.
What happens when wage differential becomes too much? An individual RN might ask to reduce that pay gap between what they are receiving, and what they could receive doing the same job elsewhere. One perspective is that the RN, like the yogurt, has become more expensive, and the hospital (RN purchaser) has to make a decision to pay the price or not. What then happens when the hospital pushes back and says it cannot meet the new wage request? A decision begs to be made.
It is easy to get upset over such things, but it’s not necessary. RNs are the yogurt and hospitals are the shopper, the hospital either puts you in their basket or they do not, you can make it more complicated than that, but it’s not.
