Studies of the nursing market forecast that the shortage will get worse in the coming years. But the real question is this: has something happened to the price mechanism in the market for nurses? To assert that the United States is suffering from a nursing shortage that will not only persist but grow worse for years to come is to assert that the nursing market is malfunctioning. Is the price mechanism in the nursing market broken?
Contrary to the many articles and studies, the price mechanism in the nursing market is not malfunctioning. It is working in textbook-like fashion. The increasing demand for nurses is driving nursing compensation up, which in turn is bringing more nurses into the market. Such is not the stuff of shortages but of market prices coordinating the allocation of scarce resources exceptionally well — and in reality, not just theory. FULL ARTICLE