It appears the plan the state Senate will consider on Tuesday would scrap prevailing wages in local communities but maintain them for state projects.
Wisconsin's prevailing wage law has been on the books since the early 1930s. It requires companies that contract with the state or local governments to pay their employees the prevailing wage for that community. Every year, the Dept. of Workforce Development sets the wage by surveying companies about how much they're paying their workers.
GOP Representative Rob Hutton says the original goal of the law was to ensure that low skilled labor from outside wasn’t awarded public projects.
“It was looking to protect local communities and the skilled labor in those communities from being really kept out of jobs that really were directed toward public works projects,” Hutton says.
Hutton says a prevailing wage was necessary in the 1930s but these days, does more harm than good. He’s behind a bill that would do away with the requirement in Wisconsin. Hutton says the prevailing wage prices out too many companies and drives up the cost of projects.
“And so as taxpayers, we are seeing the net effect and paying for the net effect of a smaller number of participants that aren’t providing a competitive bid in many, many cases,” Hutton says.
Hutton estimates that public projects could cost 20 to 40 percent less if Wisconsin did away with its prevailing wage. A recent study by the Wisconsin Taxpayers Alliance indicates Wisconsin spent between $200 million and $300 million more on projects in 2014 because of prevailing wage laws. Hutton says school districts and local municipalities have been asking for the repeal.
Ross Eisenbrey warns that communities would get what they pay for. He’s vice president of the Economic Policy Institute, a think tank.
“The union labor that often is the higher cost labor is much better quality. The people who do the work are journeymen who’ve been through apprenticeship programs, and they’re just more skilled and more productive and more efficient. So at the end of the day, what is saved in an hourly rate calculation is lost. It takes more hours for the less skilled person to do the work,” Eisenbrey says.
Eisenbrey adds that lower wages don’t mean taxpayers would see savings. He says it’s not unfathomable to think that a company might just collect a bigger profit.
At least three other states are considering the elimination of their prevailing wage laws, and two states recently changed theirs. But Scott Bartz says this this isn’t about what’s happening elsewhere, it’s about workers and family-supporting jobs.
“It’ll definitely lower wages for everyone, union and nonunion,” Bartz says.
Bartz has worked in construction for 28 years and is president of the Southern Wisconsin Building and Construction Trades Council. He says he’s not surprised by what he’s seeing in Wisconsin, in light of new laws here that weaken public and private unions. Yet he hopes for the best.
