By Ulrike Muench, RN, PhD, FAAN, Faculty, Healthforce Center at UCSF

Patterns of pay disparities based on gender continue to be a high-priority concern for the health care workforce. Recent legislation and policies at all levels of government have been passed with the goal to end gender inequity in pay, recognizing the right to equal pay for doing equal work or work of the same value.

Persistent nursing pay gaps exemplify gender inequities

Compelling evidence shows that pay disparities for women persist not only in domains like law, academia, and medicine, but also in female-dominated fields such as nursing. Our research (here and here) has uncovered a persistent pay gap for female registered nurses in hospitals and ambulatory settings, across most specialties, and across job positions, including for staff nurses, nurses working in management, and advanced practice nurses. This gap is evident even among newly graduated nurses and those without children.

Depending on the data source and analytical approach, the difference ranges from 5% to 8%, translating to approximately $4,500 to $7,000 in annual earnings. Unpublished research tracking the impact of COVID-19 on nurses’ earnings revealed a significant widening of the pay gap during the pandemic. While we have observed some reduction in this difference over the most recent 12 months, it still remains notably larger than pre-pandemic levels.

Research conducted by others shows that the pay gap in nursing is smaller than in professions such as medicine, which typically have fewer women in the workforce. Some argue this to be positive for the nursing profession, and thus somewhat less of a concern for those involved in hiring and leadership. However, considering that nurses represent the largest health care occupation with roughly 4 million women, the gender pay gap in nursing affects a significant portion of the female US labor force. In fact, approximately 5% of the roughly 76 million women in the US labor force today are nurses.

Hence, a wage disparity in nursing contributes substantially to overall gender inequity in society. Over a 40-year career, a seemingly small gap of $5,000 can accumulate to $200,000, thereby generating disparities in overall wealth, living standards, and retirement security for women. Workforce policies aimed at improving this imbalance in nursing will thus have a significant collective impact on gender inequities broadly.

Policy solutions matter, but are not straightforward

Policies at the national and state level have been introduced with the goal of ending gender discrimination in pay and recognize the right to equal pay for doing equal work or work of the same value. The Lilly Ledbetter Fair Pay Act of 2009, for example, removed the statute of limitation for pay discrimination lawsuits. In January 2023, several states, including California, implemented wage transparency laws following the example of the European Union pay transparency directive adopted in April 2022.

For California, Senate Bill 1162, signed into law in September 2022, expands pay data reporting requirements and pay scale transparency. California employers with 100 or more employees are now obligated to provide a pay scale with each job posting, maintain wage history records for each employee, and submit data detailing the average hourly wage by job category for each combination of race, ethnicity, and gender. Similar laws are in place in Colorado, Washington, and New York City, showing the nation’s growing commitment to achieving pay equity.

Evidence suggests that these laws do – in general – work toward narrowing the difference in wages for women. This is because when more information on salaries is available to applicants or employees, more equitable negotiations follow. There are likely also other positive effects on the workforce, such as lower turnover, increased motivation, and increased job satisfaction, all of which could be especially impactful for the nursing profession, which continues to experience high rates of burnout and turnover.

However, new research shows that pay transparency laws may not be without unintended consequences. Once pay data are public, salary negotiations are more competitive. From the organization’s perspective, saving a dollar with one worker will also affect future negotiations with other workers. The overall effect is indeed a narrowing of the pay gap, but also more compressed wages generally.

The impact of wage transparency laws may depend on the share of women within a specific occupation. Compressed wages for the many women at the lower end of nursing pay scales, who often work part-time and have childcare responsibilities, could be detrimental for these families. With pay transparency laws only recently gaining momentum, we do not yet have a good understanding of the more nuanced effects these laws may have on the labor force. It will be important to track new data and examine how these laws impact nursing occupations.

Organizational actions to boost pay equity for female nurses

Ending the pay gap for nurses is a significant step toward improving equity for the largest workforce in health care. As existing wage transparency laws are being revised and new ones are being considered, health systems leaders can be proactive in organizational policies that narrow the gender pay gap. Organizational actions could include defining compensation strategies with equity as a lens; developing robust systems for wage setting, promotions, and wage reporting; and developing a compensation philosophy. Training managers and human resource staff about how to communicate about pay transparency will be crucial for addressing employee questions and requests for pay adjustments. Finally, performance assessment metrics would enable employees to understand how their work contributes to specific outcomes and how it affects their pay.

Wage disparities based on gender continue to be a high-priority concern for the health care workforce given staff shortages and burnout. Solutions to these issues benefit from research that provides evidence for how health workers are affected and exemplifies the ways in which Healthforce Center contributes to understanding and defining workforce issues. This knowledge is intended to be used by health care leaders, champions, and nurses to create a collective force for health, equity, and action.