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Time to be honest about prevailing wages

Robb Kahl is the executive director of the Construction Business Group. He was recently a lawmaker in the state Assembly representing the city of Monona and nearby areas.

Robb Kahl is the executive director of the Construction Business Group. He was recently a lawmaker in the state Assembly representing the city of Monona and nearby areas.

What troubles me the most about certain far-right-leaning legislators’ recent efforts to further erode prevailing-wage laws is the false propaganda used in an effort to justify their mission.

It’s time to be honest.

They are on a clear mission to lower the family incomes of middle-class construction workers.

Prevailing-wage laws ensure that public, taxpayer-funded bidding practices do not undercut local construction wages and benefits. Using local wage data from private construction, the government sets rates for public construction projects that allow contractors to pay wages, health care and retirement benefits that retain skilled workers.

This is good public policy. Why? The laws reduce the likelihood that construction workers will need to rely on public assistance by ensuring they are paid family sustaining wages. The laws also spur local economic development by increasing the likelihood that local contractors and employees are building local public-works projects. In other words, taxpayer money spent by state and local governments stays in Wisconsin rather than being exported.

Legislators in the anti-prevailing wage faction often propagate three general myths. If we take a closer look, it quickly becomes apparent the claims are untrue.

Myth No. 1 — Construction workers make too much money. One example consistently cited by the anti-prevailing wage faction is the money made by flaggers. One legislator claimed that prevailing wages can result in flaggers making nearly $100,000 a year.

The average flagger, whose job entails standing in live traffic directing vehicles to ensure the safety of everyone on a job site, works approximately 1,200 hours a year. In Ozaukee County, a flagger on a state highway project is to be paid $22.55 an hour and receives health and other benefits valued at $19.37 an hour. This brings the total annual compensation package to $50,304 a year. Here, it’s important to note that flaggers do not receive mileage for travel to and from work or per diem allowances for room and board.

Legislators, in comparison, make a salary of $50,950 in their part-time job, and they get free parking in Madison costing $957.96 a year and health and pension benefits valued at $19,732.94 a year. They are also entitled to receive thousands of dollars in per diem and mileage “reimbursements.” Legislators can make $75,000 a year or even more depending on the claimed reimbursements. And they do this while working fewer hours than the very flaggers they have repeatedly targeted as the prime example of all that is wrong with prevailing wages.

Maybe it is time we ask ourselves who is the greater strain on the taxpayer — the part-time legislators receiving full-time pay and benefits or the construction workers simply trying to build our communities and support their families?

Myth No. 2 — Prevailing-wage laws increase public construction costs by 25 percent or even more.  Labor costs generally represent only 20 to 25 percent of public construction costs. This means that construction workers would have to work for nothing in order for a repeal of prevailing-wage laws to result in cost savings of 25 percent or more.

The bulk of peer-reviewed studies conducted on prevailing wages conclude that the pay requirements have little to no effect on the overall construction cost of public-works projects. In fact, the nonpartisan Wisconsin Legislative Fiscal Bureau advised Wisconsin legislators in 2015 that repealing prevailing-wage laws would result in no cost savings to Wisconsin taxpayers and that no peer reviewed study backs the savings claims.

Additionally, we must factor into this equation the training costs that will be borne by state taxpayers once prevailing wages are eliminated. Cut wages and you cut trades workers’ current ability to take money out of their own paychecks to fund their apprenticeships and ongoing worker-training programs. The trade unions representing the operating engineers, carpenters, laborers and ironworkers, for instance, privately fund approximately 95 percent of all the training for their respective crafts in this state. Go to states with no prevailing wages and there is minimal privately funded training. They, conveniently, pass that responsibility on to taxpayers.

Myth No. 3 — Prevailing-wage laws hurt the Wisconsin economy. Numerous reliable, peer-reviewed studies prove that state and federal prevailing-wage laws help local contractors, keep money spent on public-works projects in the state, raise tax revenue, spur economic development and help retain a skilled workforce. Recent studies also prove that repealing prevailing-wage laws has a disproportionate, adverse effect on veterans because the percentage of veterans working in the construction industry is higher than in other industries.

So let’s be honest about the likely results of repealing prevailing-wage laws. Middle-class wages will be cut. Veterans will be disproportionately harmed. Wisconsin’s skilled workforce will erode. The tax dollars used for public construction projects will be more likely to leave the state, effectively exporting jobs in the one industry we thought was immune from outsourcing. Public construction costs will not be reduced.

Politics — not facts or good public policy — is driving the anti-prevailing wage faction.

Next time you drive by a construction project, ask yourself: Would you trade your job for that job? Do you think we will get higher quality and productivity by driving down those worker’s family incomes by 25 to 35 percent?

2 comments

  1. I’m a contractor in California we have prevailing wage laws here. However, they’ve been used and abused over recent years. Certain types of public Construction now require the workforce to be trained by the Union. Not all projects require this Workforce to be employed but many school projects do. The issue with prevailing wage is not how people are paid or the amount they are paid; it is the Camel’s Nose Under the Tent. It creates a self-propagating bureaucracy that is very difficult to stop once entrenched and it grows.

    Finally, a major issue with prevailing wage is the burden of reporting these wages to the state for small businesses. Large businesses can hire accountants and outside pay companies to file the multitude of paperwork required before during and after a project for prevailing wage. Small companies don’t have those sort of resources and thus the Public Works projects become the private domain of large companies and not the small companies who could most benefit from fair and open bidding.

  2. Those that say we make to much money don’t realize that we get no sick time, no personal time and no vacation pay. We do get holidays off, with no pay. When the weather does not permit us to work we do not get paid. If we do not work we do not get paid.

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