There is a great deal of information swirling around the repeal of prevailing wage, but not all of it is true. Here are five falsehoods that I hear almost every day and that we can help put to rest.
Inaccuracy #1: Prevailing wage is an average of all wage rates paid.
Wisconsin’s prevailing wage is either the union package or the weighted average of only the top half of wages reported from a survey of contractors. Right around 75 percent of Wisconsin’s construction workforce is not unionized, so it is difficult to argue that union wages and benefits prevail.
Inaccuracy #2: Prevailing wage protects local small businesses.
Prevailing wage provides an unfair advantage for big city and out-of-state contractors at the expense of local employers. When prevailing wage mandates a wage far above a community’s market value, larger, non-local shops gain an advantage because it makes more sense for them to bid and work on projects when wage rates are inflated to their levels. Also, the prevailing-wage paperwork burden discourages small businesses from bidding on projects.
Inaccuracy #3: Repealing prevailing wage will result in dangerous work sites, and unsafe construction.
Virtually every private-sector construction project is built without prevailing wage regulations, including the following Daily Reporter 2014 Top Projects: Schreiber Foods Home Office in Green Bay, the SentryWorld Renovation in Stevens Point, and the Pfister Hotel Tower room renovations in Milwaukee. There is absolutely no difference – in construction standards, or health and workplace safety requirements, or enforcement – between prevailing wage and non-prevailing wage projects.
Inaccuracy #4: Without prevailing wage, contractors will make more money at the expense of the construction unions.
Contractors who are required by law to pay prevailing wage simply build that cost into their bid. Nothing gained and nothing lost for the contractor that pays prevailing wage, and the same would be true without prevailing wage. Union construction workers will continue to receive their collectively-bargained rate independent of prevailing wage.
Inaccuracy #5: Prevailing wage repeal does not have meaningful support and is never going to happen.
Prevailing wage repeal has been cosponsored by nearly half of current Republican legislators, and many more have indicated their support. Senate Majority Leader Fitzgerald has been quoted in the Daily Reporter saying that repealing prevailing wage will save money on road projects and vertical construction.
The Wisconsin Association of School Boards, the Wisconsin Counties Association, the Municipal Electric Utilities of Wisconsin, the Outagamie County Board of Supervisors, and the Wisconsin Rural Water Association are supporting the repeal of prevailing wage because they know that it will allow both state and local units of government to stretch their construction tax dollars farther. If Wisconsin repealed prevailing wage, it would join 18 other states — Iowa, Colorado, New Hampshire, Kansas, Virginia, North Dakota, South Dakota, Utah, Idaho, North Carolina, Oklahoma, Arizona, Louisiana, Alabama, Mississippi, Georgia, South Carolina, and Florida.
Currently, West Virginia, Nevada, Indiana, and Michigan legislators are considering either reforming or repealing their state’s prevailing wage laws, and Illinois Gov. Rauner called for ending prevailing wage in his Feb. 2 State of the State address.