The pharmacist surplus is an ongoing struggle for our industry.
The surplus has existed for more than a decade, and it shows no sign of resolving itself.
Everyone says, “There are too many pharmacists,” but I find this isn’t based on facts but subjective feelings based on feelings about the growth of pharmacy schools and in turn the growing number of new graduates.
In 2000, the Department of Health and Human Services submitted a study to Congress titled The Pharmacist Workforce: A Study of the Supply and Demand for Pharmacists. The report referred to “an unprecedented demand for pharmacists,” and an “increased use of prescription medications” as causes of the predicted pharmacist shortage.
While researching the topic, I connected with labor studies experts and discovered a book called Occupational Labor Shortages: Concept, Causes, Consequences, and Cures.
Now, why would I review a book about shortages when the pharmacist job market is in a surplus?
The book, published in 2013, reviews the study of labor shortages and the difficulty of determining whether shortages actually exist. To my surprise, As part of their research, the authors specifically addressed the pharmacist job market.
Throughout the process of studying the topic, I learned three important lessons about shortages that indirectly reflects on our current surplus market.
1. There’s no accepted definition in economics for a labor shortage or surplus.
I accepted the notion of a “pharmacist shortage” as truth, but the authors of the book ask two important questions:
- How would you measure a shortage?
- How would you determine the market’s need for an occupation?
They argue that there isn’t a way to measure these things.
They do, however, define a labor shortage as the equilibrium between supply and demand in which the number of workers demanded exceeds the supply available who are willing to work at a particular wage, in a particular place and a particular point in time.
The existence of a working definition does not, however, address all the questions related to the topic, because we don’t have the means to measure labor supply.
We can measure the number of new pharmacists who graduate each year, as the American Association of Colleges of Pharmacy does each year.
The truth is, though, that we cannot precisely know the number of vacancies, the number of new jobs each year, or the length of the vacancies.
We can barely claim whether there is a shortage or surplus of pharmacists because of the lack of a measurement.
2. The Pharmacist Labor “shortages” result from a variety of causes.
The first difficulty is that it’s hard to verify that a shortage exists if you can’t measure it. The HHS report to Congress pointed to increased vacancy rates and difficulty hiring as evidence of a shortage.
The same report listed the causes of the shortage as an increase in the number of prescribed medications, increases in the number of pharmacy positions, and changes in the pharmacist workforce like an increase in the number of female pharmacists who worked shorter hours.
The pharmacy industry faces the same challenges other industries do.
As a career coach, I’ve seen evidence that geographic job shortages exist in certain regions in the U.S. It doesn’t mean that these jobs pay better or offer better benefits; simply that they are harder to fill.
Pharmacy is also like other industries in that as the demand increases, the wages increase. We saw the effects of this 30 years ago. The pharmacist average salary significantly rose over a short period of time when compared other healthcare professions average salary.
Currently, though, the increasing number of pharmacy students that continue to graduate suggests that the shortage may not truly exist.
3. Certain key indicators emerge when a shortage exists in the job market.
When demand outruns supply in any job market, certain signs emerge. You can think of these like symptoms of “a job shortage.”
- Companies offer bonuses for referring new employees.
- Companies offer fringe benefits for new hires, like cars and bonuses.
- Companies use multiple media outlets to promote new jobs.
- Worst case, companies decline work because they lack the workforce to complete it.
The 2018 pharmacy job market generally doesn’t show those signs of a shortage, though there are exceptions to every rule. One of my career clients transitioned from CVS to a hospital job in Los Angeles, and his friend who worked at the hospital earned a referral bonus.
Those situations truly are the exception in 2018. Anecdotally, we see the opposite happening, as pharmacists report multiple wage decreases and smaller income offers than in years prior.
Basic laws of supply and demand suggest that if wages are declining, a surplus of pharmacists exists. I observed this, but also Kevin Mero at Pharmacy Week noticed a slight decrease occurring in certain sectors.
The state of the pharmacy job market
I’ve written numerous articles about the outlook for pharmacists, including the growing number of pharmacy schools, the questionable facts behind the claims of a pharmacist shortage, and the decreasing salaries for pharmacists.
This article will be the first of a two-part series on the topic of the perceived surplus of pharmacists. I use the word perceived because there’s no objective way to measure it.
The Happy PharmD wants to help you find fulfilling work in the midst of this challenging job market. We want to help you find better jobs, discover work you love, and negotiate the best salaries, even in a job market that has pharmacists clawing for positions.
Alex is the Founder of The Happy PharmD. He loves anime, his family, and video games, but not in that order.