A federal prevailing-wage requirement for stimulus-backed weatherization projects is drawing fire from labor and management.
Labor wants the pay rate to go higher. Management wants the rate to go away. Both sides realize they have little chance of getting their way before the stimulus money is spent.
“You are dealing with the federal government here,” said Tom Fisher, president
and business manager of the Wisconsin Laborers’ District Council. “That’s all I’ll say.”
Wisconsin spends roughly $65 million per year in state and federal money on projects that improve insulation, windows and appliances in homes, but those projects never required prevailing wages.
But the American Recovery and Reinvestment Act requires the wages on everything using stimulus money.
That includes $5 billion in weatherization money, $144.5 million of which will go to Wisconsin.
So the federal government in July and August surveyed companies to set a prevailing wage for weatherization projects in every U.S. county. Survey responses established the wage based on benefits and hourly wages workers typically receive on such projects.
“It’s created a situation where builders have looked at it and said, ‘Nevermind, it’s too complicated,’” said Jenna Hamilton, assistant vice president of government affairs for the National Association of Home Builders.
That means contractors with no experience on prevailing-wage jobs are simply avoiding billions in stimulus weatherization projects, Hamilton said.
Furthermore, she said, the federal government has not clarified how the prevailing-wage requirements will work. For example, do builders pay prevailing wages for every aspect of a housing renovation that receives weatherization money for window replacements?
“Then what?” Hamilton said. “The local labor union is going to turn them in, and, all of a sudden, they’re involved in an investigation.”
But Wisconsin laborers’ unions also oppose the prevailing-wage requirement.
The federal prevailing wages are set at $14 an hour in Milwaukee and Dane counties, for example. Those rates are lower than the wages unions and residential contractors settled on earlier this year when signing agreements for weatherization jobs, Fisher said.
“This is work that we are training for, and we have a work force ready to go,” he said. “Our contractors will be at a competitive disadvantage when they go out to bid for this.”
Laborers Local 113 in Milwaukee has a basic rate of around $39 an hour, and the union bargained down to $22 an hour for weatherization workers, said Business Manager John Schmitt. He said he was surprised by the $14 federal rate for Milwaukee County.
“At $14 an hour, McDonald’s ain’t far away,” Schmitt said.
But the homebuilders and the laborers are worried there is not enough time to get their questions answered.
The National Association of Home Builders considered legal challenges or working administratively with federal departments to revise or remove the wage rules, but those approaches would take too long, Hamilton said.
“By the time you get any answer,” she said, “it’s all over anyway.”
The state has three years to spend its stimulus weatherization money.
Schmitt said in Milwaukee, Local 113 will try to get its contractors on weatherization jobs this year so they can fill out the prevailing-wage surveys next year.
“If we can get some of our contractors to get this work, we can get the prevailing rate turned around,” he said. “But that won’t do anything until next year.”