Unavoidable chaos in the NHS?

A BBC headline announces that

Migration rules ‘may cause NHS chaos’

The problem is, a rule introduced in 2011 requires that foreign workers must return home after 6 years if they are not earning over £35,000. This is presented a disaster that can only be averted by the government granting an exemption to the rules.

The union says that by 2017 more than 3,300 NHS nurses could be affected. And by the end of the decade the numbers could be double that – a potential waste of nearly £40m when all the costs of recruitment are taken into account, the RCN says.

RCN general secretary Peter Carter said: “The immigration rules will cause chaos for the NHS and other care services.

“At a time when demand is increasing, the UK is perversely making it harder to employ staff from overseas.”

He told BBC Radio 4’s Today programme the move was “totally illogical” as there is currently a “major shortage of nurses”, leading to many NHS trusts spending “tens of millions” to recruit from overseas.

Dr Carter also stressed that most nurses earn “nowhere near” £35,000, with most on salaries of between £21,000 and £28,000 a year.

I don’t mean to defend the Tory policies, which combine the Conservative view that the non-rich are inherently undesirable with the usual British political one-upmanship on bashing foreigners, but this doesn’t look to me like an inherently unsolvable problem. There is a method known for increasing the supply of labour: raise wages. If there is a “major shortage” of nurses when you pay between £21,000 and £28,000 a year, I’m willing to guess that there would be less of a shortage if they were paid between £25,000 and £32,000 a year. It probably wouldn’t solve the problem completely, in the short term, but it would bring in marginal resources — some part-time workers would work more hours, some would delay retirement, and so on — and it would pull more young people into the profession. And if they raised salaries to £35,000, that would solve their international recruitment problem.

The nurses would still be earning a lot less than physicians. But of course, that’s only right, one might say, since physicians require so much more training. Speaking as someone who has as more years of education and training than most physicians — to say nothing of bankers — I can assert confidently that there is little link between salaries and extent of training required for the job. The usual story is that it is a matter of supply and demand. Training requirements reduce the supply, but salaries go up only when there is an excess of demand. Sadly, there is not much of an excess of demand for university mathematicians, but the senior NHS managers who earn hundreds of thousands of pounds would presumably defend their hefty salaries and bonuses — if they even could be bothered to comment — by saying, that’s the market price for hiring people as wonderful as us. High demand, low supply.

That’s obviously the position that the NHS is in when hiring nurses. I understand that the NHS would struggle to raise nurse salaries. An extra £1000 a year for all 440,000 nurses would cost a lot more than the recruitment costs they are worried about. It is tempting to suck dry the pool of well-trained nurses in poorer countries, with lower wage expectations. (For whatever reason, the NHS does not seek to reduce costs by actively recruiting senior managers from the well-trained cadres of well-trained third-world health officials.) But that is only to say that there is a contradiction between the government’s reasonable wish to keep foreign recruitment from being used to push down local wages, and its wish to keep underfunding the NHS. It is an error to express this as inherently a fault of the government’s migration policy, as though it needed to be adapted to unchangeable nurse salaries.


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