By Aleysha Czartoszewski and Michelle Wein
Executive Summary
The Michigan Legislature is considering a bill for Michigan to join the Nursing Licensure Compact (NLC), which would enable eligible out-of-state Registered Nurses (RNs) and Licensed Practical Nurses (LPNs) to practice in the state. Michigan is one of ten states that has not joined the NLC due to concerns over the inability to establish a state standard of care for nurses to meet. Presuming that the new NLC bill addresses sovereignty concerns, MHC Insight compared workforce variables in similar Midwest states to determine if joining the NLC would improve Michigan’s nursing shortages.
By comparing the median wages, number of out-of-state workers, and workforce growth of nurses in Midwest neighbors Minnesota (non-NLC), Illinois (non-NLC), Wisconsin (NLC member), Indiana (NLC member), and Ohio (NLC member), we were able to determine if the NLC provides a competitive advantage. While it is impossible to know whether any competitive effect is solely due to the NLC or a combination of other factors, MHC Insight reached the following findings:
Key Findings:
Participation in the NLC does not seem to positively or negatively affect the RN or LPN workforce in the Midwest states studied.
Illinois, a non-NLC state, is the best-ranked Midwest state for RNs and LPNs according to several workforce variables
Michigan, a non-NLC state, is the worst-ranked Midwest state for RNs and LPNs according to several workforce variables
Dissatisfaction with their workplace conditions may be leading young Michigan RNs to leave the nursing profession. This could potentially cause Michigan to fall short of projected nurse replacement rates, further compounding workforce shortages.
MHC Insight’s Recommendation:
For Michigan to achieve long-term nursing workforce sustainability, workplace conditions for nurses need to improve, and nurse workforce growth initiatives must continue and grow.
The State of Michigan’s Nursing Workforce
With 118,207 Registered Nurses (RNs) and Licensed Practical Nurses (LPNs) currently working in Michigan, nurses comprise the largest portion of Michigan’s healthcare workforce¹. Yet Michigan has a nursing shortage. Michigan Health Council’s 2024 Healthcare Workforce Index projects that by 2033, Michigan will have a shortage of 4,611 RNs and 520 LPNs to fill open positions. In response to the nursing shortage, postsecondary, employer, and government stakeholders have implemented and proposed several solutions, from expanding Michigan Reconnect’s postsecondary funds to grant-funded nurse training and stipend programs. However, these efforts have primarily focused on the current and future pipeline of nurses living in Michigan. State Representative Phil Green hopes to change that by introducing House Bill 4935, which would have Michigan join the Nursing Licensure Compact (NLC), a multistate license enabling eligible RNs and LPNs across the US to practice in-person or via telehealth in the state.
Multistate compacts, like the NLC, are touted as a solution to workforce shortages and have been adopted by many other healthcare professions to enhance practitioner mobility and patient access to care. Yet, it is unclear whether joining healthcare compacts helps reduce workforce shortages. As the Michigan Legislature decides whether to move forward with HB 4935, MHC Insight explored Michigan’s history with healthcare compacts, including the NLC, and analyzed regional workforce data to determine whether joining the NLC is a solution to the state's RN and LPN workforce shortage.
Healthcare Compacts and the Decision Whether to Join the NLC
Interest in and development of interstate compacts to address workforce needs has grown in recent years. Emergency Medical Services, Physician Assistants, Social Work, Dentistry and Dental Hygiene, and Counseling are several professions with currently existing compacts, and future compacts for Respiratory Therapists and Athletic Trainers are under development. Every state, excluding New York, has enacted at least one occupational licensure compact, and 18 states have enacted a Universal Licensure Recognition Law, eliminating as many barriers to licensure as possible. Of all the healthcare compacts, the NLC is the U.S.’s largest and oldest, having formed in 1999, with over 2.2 million nurses holding a multistate license through the compact.
As of the publication date of this article, Michigan is one of ten states that has not joined the NLC, including California, Nevada, Oregon, Hawaii, Alaska, New York, Massachusetts, and Midwest neighbors Minnesota and Illinois. In 2020, state representatives attempted to pass NLC legislation. However, Governor Whitmer vetoed the bill, stating that it violated Michigan’s state constitution by giving up the right to establish a state standard of care. Other states have not joined the NLC due to concerns over decreased nursing board revenues, lowered work standards, and a loss of disciplinary oversight and sovereignty. In addition to these concerns, some unions and nurse advocacy organizations worry that joining the NLC could lead to wage depression and diminished bargaining power due to an influx of commuting nurses.
Although Michigan has declined to join the NLC, it is involved in other interstate licensure compacts. In 2019, Michigan joined the Interstate Medical Licensure Compact (IMLC) for physicians, and in 2022, it joined the Psychology Interjurisdictional Compact (PSYPACT). The state is also considering joining other interstate compacts with bills for Physician Assistants, Occupational Therapists, and Physical Therapists making their way through the House. Legislation to join these compacts has or will likely pass because, unlike the NLC, which issues a separate multistate license, the IMLC, PSYPACT, and new proposed compacts do not issue licenses. Instead, they create a centralized process for eligible providers to apply for individual state licenses or authorizations-to-practice through one application form hosted by the Compact. This process allows states to maintain sovereignty over licensure and the requirements to practice.
Assuming the new NLC bill proposal addresses the previous points of contention around licensing oversight and concerns over state standards of care, Michigan will still ultimately need to determine whether joining the NLC will reduce RN and LPN shortages.
Would Joining the NLC Make a Difference?
To determine the effect, if any, the NLC has on the RN and LPN workforce, MHC Insight compared Michigan’s median wages, number of out-of-state workers, and nursing workforce growth from 2018 to 2023 with neighboring Midwest states Minnesota, Wisconsin, Illinois, Indiana, and Ohio to determine if the NLC provided any competitive effect in the states that joined the Compact.
Competitive effect indicates how much of the job change within a given region is the result of some unique competitive advantage of the region. This is because the competitive effect measures the job change that occurs within a regional industry that cannot be explained by broader trends (national occupational change and national economy change). By looking at this number between 2018 and 2023, we can see if the NLC had any effect on nurses within states that joined (or did not join) the compact. However, it is impossible to know if the unique competitive effect described here is solely the NLC or some other group of factors that are helping (or hurting) nurses regionally.
NLC Status by State
Each neighboring state’s NLC status and joining year varied:
Minnesota: pending NLC legislation
Wisconsin: joined NLC in 2000
Illinois: pending NLC legislation
Indiana: joined NLC in 2020
Ohio: joined NLC in 2023
The rest of the article will visually represent NLC member states in blue and non-NLC member states in grey.
Wages
Median wages for RNs and LPNs in 2023 varied across NLC and non-NLC states. Illinois and Minnesota, both non-NLC states, paid the highest wages for nurses, with Illinois LPNs earning $30.05/hr and Minnesota RNs earning $46.74/hr. Conversely, two NLC states, Indiana and Wisconsin, had the lowest compensation, with Wisconsin LPNs earning $27.46/hr and Indiana RNs earning $37.74/hr. Michigan nursing wages fell on the higher end for LPNs at $29.68/hr and on the lower end for RNs at $39.25/hr.
Commuting
Wages, however, did not correlate with whether a state had more workers who commuted to out-of-state employers (negative commuter rate) or had an influx of out-of-state workers employed in the state (positive commuter rate). Despite having the second-lowest RN and LPN wages, Ohio was the only state with a net positive commuting rate; all other neighboring states had more in-state nurses commuting out of the state than out-of-state nurses commuting to their home states. Wisconsin, the longest-standing Midwest NLC member, has the highest commuter loss, with 2,811 RNs and 344 LPNs working out-of-state. Michigan also has a large commuting workforce, with 1,447 RNs and 343 LPNs leaving for out-of-state jobs.
Growth Rate
Compounding the loss of commuting nurses is the slow growth of Michigan’s nursing workforce overall. Compared to the national RN workforce and economic growth trends, Michigan’s RN workforce grew by much less than expected. From 2018 to 2023, Michigan’s workforce should have grown by 8,254 RNs, but instead, it only grew by 1, 135 RNs². Illinois, Indiana, Ohio, and Wisconsin also had slower RN growth rates than expected. However, with the exception of Minnesota, which had a negative growth rate, Michigan’s RNs had the slowest growth in the region.
Nursing Growth Rate by State | ||||||
Illinois | Michigan | Minnesota | Indiana | Ohio | Wisconsin | |
RN Jobs (2018) | 132,344 | 104,469 | 69,332 | 68,183 | 129,174 | 62,064 |
RN Jobs (2023) | 144,024 | 105,604 | 68,339 | 70,722 | 137,601 | 64,157 |
RN Job Change | 11,680 | 1,135 | -993 | 2,539 | 8,427 | 2,093 |
RN Job Change (%) | 9% | 1% | -1% | 4% | 7% | 3% |
LPN Jobs (2018) | 20,992 | 14,687 | 16,638 | 15,196 | 42,107 | 8,234 |
LPN Jobs (2023) | 21,400 | 12,423 | 14,459 | 14,211 | 37,730 | 7,655 |
LPN Job Change | 408 | -2,264 | -2,179 | -985 | -4,377 | -579 |
LPN Job Change (%) | 2% | -15% | -13% | -6% | -10% | -7% |
In the same period, Michigan also experienced a larger decrease in the LPN workforce than expected. National trends projected a decline of 1,473 LPNs; however, Michigan’s workforce decreased by 2,265 LPNs. Except for Illinois, LPNs declined in all the Midwest states. However, Michigan experienced the most significant decrease. Notably, Michigan and Minnesota, both non-NLC states, had the slowest growth (decline for Minnesota) of RNs and the greatest decline of LPNs compared to all other neighboring states.
Competitive Effect
The NLC appeared to not impact the competitive effect (how much of the job change within a region is the result of a unique competitive advantage as calculated by the difference between a region’s expected and actual job change) of the analyzed states³.
Wisconsin and Indiana had competitive advantages or disadvantages depending on the
RN or LPN occupation, whereas the positive or negative direction of Illinois, Ohio, Minnesota, and Michigan’s competitiveness remained the same across both professions. Illinois, whose NLC membership is pending legislation, is the only state with an overall positive competitive effect, indicating a unique regional advantage causing LPNs and RNs to thrive in the state.
Interestingly, non-NLC states held both the largest competitive advantages and disadvantages in the region, with Illinois having the largest competitive advantage and Michigan and Minnesota having the largest competitive disadvantages.
Data Conclusions
For each workforce variable analyzed, MHC Insight ranked the Midwest states based on whether the variable’s absolute value would result in or encourage RN or LPN growth or retention in the state. The state with the most well-positioned value for a variable received a rank of one, and the state with the poorest-positioned value received a rank of six.
NLC Summary: State Ranking | ||||||
Illinois | Indiana | Michigan | Minnesota | Ohio | Wisconsin | |
Wages | ||||||
RNs | 3 | 6 | 4 | 1 | 5 | 2 |
LPNs | 1 | 3 | 2 | 4 | 5 | 6 |
Commuting | ||||||
RNs | 3 | 6 | 4 | 2 | 1 | 5 |
LPNs | 3 | 4 | 5 | 2 | 1 | 6 |
Workforce Growth | ||||||
RNs | 1 | 3 | 5 | 6 | 2 | 4 |
LPNs | 1 | 2 | 6 | 5 | 4 | 3 |
Competitive Effect | ||||||
RNs | 1 | 4 | 6 | 5 | 2 | 3 |
LPNs | 1 | 2 | 6 | 5 | 4 | 3 |
1= Best Ranking | ||||||
6 = Worst Ranking |
Illinois, a non-NLC member, received the most top rankings across the variables, making it the best state for RNs and LPNs in the Midwest. Illinois LPNs are paid the most and the state has the largest workforce growth and the highest overall competitive advantage for RNs and LPNs. Of all the NLC states, Ohio was the only state to receive a top ranking for its positive commuter rate for both RNs and LPNs. Indiana, Wisconsin, and Michigan did not rank the highest in any category. Instead, they were the states that received the worst ranking most frequently. Michigan fared the worst of all the neighboring states, receiving either the lowest or near lowest rankings in all but one category. It had the worst rankings for competitive advantage and LPN workforce growth and comparatively low rankings for RN and LPN commuters and RN wages. The only workforce factor that Michigan earned a high ranking for was LPN wages, which are the second highest in the Midwest.
While the data cannot conclusively determine that nonparticipation in the NLC is the driving influence on Michigan’s nursing workforce shortage, it nonetheless shows that Michigan is losing nurses. Since Michigan’s workforce data aligns with general Midwest workforce trends, albeit on the lower end, it begs the question: What is unique about Michigan nursing that is causing the workforce decline?
The Nursing Workforce Decline; The Impact of Environment.
A recent study by the University of Michigan analyzing RNs’ employment plans and workplace assessments may illuminate the issue. As the largest segment of the nursing population, RNs’ views on careers and the workplace represent the most significant portion of the nursing workforce. Alarmingly, the 2023 study found that, in the next year, one-third of Michigan RNs plan to leave their jobs, and 13 percent of those nurses plan to exit the nursing profession altogether. While RNs’ assessment of workplace conditions has improved since 2022, the reasons for their job dissatisfaction remain the same: high burnout rates, chronic understaffing, workplace abuse, and violence.
The study's most concerning finding is that RNs 34 years old and younger have the highest rates of planned departure and job dissatisfaction. The finding highlights a growing concern that there will not be enough new nurses– RNs or LPNs– to replace Michigan’s retiring baby boomers.
Between 2023 and 2033, Michigan’s RN and LPN nursing workforce is projected to grow by 6 percent. To meet Michigan's increasing nursing workforce needs, the state must achieve a replacement rate of 5.4 percent for RNs and 7.6 percent for LPNs, or 5,866 RN
jobs and 999 LPN jobs⁴. The majority of the replacements needed can be attributed to retiring nurses. Between 2023 and 2033, 20 percent of Michigan nurses will reach retirement age, with five percent already working past 65 in 2023. If insufficient numbers of younger-generation nurses remain in the workforce, the time needed for nurses to complete education and training to fill open positions will worsen staffing shortages across the state.
MHC Insight’s Take
Nursing shortages exist across the nation. However, Michigan's reported unsatisfactory workplace conditions, combined with unfavorable workforce variables, create a unique storm contributing to the state's nursing shortage. The result: we are losing retiring nurses and young RNs who are dissatisfied with their careers. To maintain care for Michigan’s aging population, the state must expand its nursing workforce initiatives. The proposed legislation for Michigan to join the NLC is only a potential short-term solution that would allow employers to tap a larger talent pool to fill current open positions. However, the state needs to figure out how to address the workplace issues that make Michigan nurses leave not only their employers or the state but the profession entirely. Inviting out-of-state nurses to practice in Michigan will not help shortages long-term if the call is coming from inside the house.
To learn more about the status of the Registered Nurse workforce, visit MHC’s Registered Nurse Occupation webpage at mhc.org/registered-nurses.
End Notes
¹ Job counts are based on the most recent four quarters of data available from Quarterly Census on Employment and Wages (QCEW), a Bureau of Labor Statistics program that publishes a quarterly count of employment and wages reported by employers covering more than 95 percent of U.S. jobs, available at the county, MSA, state and national levels by industry. This job count can be different from licensed RNs or LPNs - who may hold a license in the State of Michigan but are not currently employed.
² The expected change is a combination of how much the occupation is growing nationally and how much the economy is growing overall. The expected job change for RNs or LPNs in Michigan from 2018 to 2023 was calculated as the sum of the national economic performance rate applied to regional jobs, and the national occupational premium (the difference between how much the economy is growing and how much the occupation is growing) for 2018 to 2023 multiplied by the number of Michigan RN or LPN jobs in 2018.
³ The competitive effect is determined by subtracting a region's expected job change from the actual change in regional jobs.
Replacement jobs are estimated as the sum of the change in new jobs (the change in the total number of workers in an occupation as the difference between a base year and projected years) and the number of workers who are permanently leaving the workforce.
⁴ Replacement rate is calculated as a combination of Lightcast job counts and national-level, occupation-specific separation rates from the Bureau of Labor Statistics (BLS) Employment Projections program. The BLS separations’ methodology covers workers who are permanently leaving an occupation and does not consider a worker leaving a region but continuing in the same line of work. Similarly, BLS does not count separation as workers who remain in the same region and in their occupation but move to a new employer.
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