Task 3 · Application of Geographic Differentials
The same nurse, priced to her labor market.
A staff RN's market median runs roughly $84K in lower-cost markets and $187K in the Bay Area — a 122% spread that national averages erase. Under 38 U.S.C. §7451, each VAMC must survey its own local labor market every year. HSG anchors every facility to BLS OEWS metro wages, layers an ERI cost-of-labor model, and produces the per-facility locality factor that drives Nurse Locality Pay.
Cost-of-labor map
Each facility market plotted by location; bubble size and color scale with the cost-of-labor index (national = 100).
Why a national average fails VHA.
Highest-cost market
San Francisco Bay Area
Index 191 · RN median $186,610
Lowest-cost market
Nashville
Index 86 · RN median $84,040
Pay the national median everywhere and VHA over-pays in TN while losing nurses in California. The locality factor is what closes that gap — facility by facility, every year.
Cost-of-labor index by facility market
Indexed to the national baseline (100).
The reference line marks the national baseline. Bars to its right command a locality premium; bars to its left sit below market.
The §7451 facility survey workflow
From metro wage data to a director's signature.
- 1
Anchor to BLS OEWS
Pull the current metro-area wage estimate for each nurse SOC code in the facility's labor market — the statutory floor.
- 2
Survey local comparators
Collect primary wage data from 5–12 non-VA hospitals in the same market to validate and supplement the federal anchor.
- 3
Compute the locality factor
Blend the sources into a defensible cost-of-labor index and recommend the Nurse Locality Pay adjustment by grade.
- 4
Package for the director
Deliver the survey report — comparators, wage tables, recommendation, and the 30-day BLS-trigger review path — ready to sign.
Repeats annually for each of VHA's ~170 medical centers, with an off-cycle 30-day review whenever BLS publishes new OEWS metro data.
Cost-of-labor indices are shown against a national baseline of 100. RN market medians are real — BLS OEWS 2025 metropolitan annual wages (SOC 29-1141); each index is the metro's median ÷ the national RN median ($97,550). Per-facility locality factors are produced under the 38 U.S.C. §7451 annual local labor-market survey.