Hospitals rely upon a large pool of
workers from a highly
diverse group of occupations. Naturally, with the wide variety of occupations
found within any
hospital, wages will vary considerably from worker to worker. To keep things
simple, we will examine
the average annual wage for all hospital workers within groups of counties
during 2008.
The distinction between rural and
urban counties can sometimes be fuzzy. A county may have
a relatively large city
in one area while the rest of the county is very sparsely populated. A good
example is Vernal in
Uintah County. Instead of using the traditional rural/urban distinction, the wages of
hospital workers were
calculated for groups of counties on the basis of population density or population per
square mile.
Not all counties in Utah have
hospitals. Daggett, Emery, Morgan, Piute, Summit, and Wayne
counties were not included because they did not have
hospitals in 2008. The
23 counties with hospitals were separated into four groups according to population per
square mile, where the
most rural counties have the lowest population density and the most urban counties
have the highest population density. As the chart
reveals, hospital wages progressively increase as the
population per square mile increases. The average annual
hospital wage is $34,096 in the most rural counties, while
hospital workers in the
most urban counties receive an average wage of $45,589.
Why are hospital wages lower in rural
areas? Part of the
explanation may lie with the size of hospitals. Labor economists have long recognized
that workers in larger
establishments tend to receive higher wages than workers in smaller establishments.
Only the largest hospitals are able to acquire and
efficiently use the most
advanced medical technologies. Moreover, large hospitals are in a better position to
effectively utilize a wide array of specialists. Both of
these facts can help account for the differences in wages
between large and small
hospitals. It shouldn’t be surprising that hospitals in rural counties tend to be smaller
than those in urban counties. Measuring the size of
hospitals as the average number of workers per establishment,
a look at the data shows
that the average size of hospitals increases as we move from the most rural to most
urban counties. The two
upward trends in wages and establishment size are statistically related and suggest
that the employer size/wage relationship holds for hospitals
in Utah.
While it may be unwelcome news to rural hospital workers that their wages are lower on average as compared with urban hospital workers, the rural/urban wage gap may not persist indefinitely. Utah is currently the fastest growing state in the nation, with many rural counties exhibiting high population growth rates. As the population increases in these rural counties, the rising demand for hospital services should translate into the expansion of existing hospitals or the construction of new, larger facilities. If the employer size/wage relationship holds true, the rural/urban wage gap can be expected to narrow in the future.
