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Best way to go about wage repeal? Look no further than defenders’ arguments

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In one way, it makes sense that contractors would be particularly eager to keep the state’s prevailing wage laws intact for school projects.

Every year, voters go to the polls in referenda to approve millions upon millions of dollars’ worth of construction, addition and renovation work to schools throughout Wisconsin. The projects become more or less common as the economy’s strength ebbs and flows, but never go away entirely.

This mainstay of the construction industry was behind comments made by the majority leader of the Wisconsin Senate, Scott Fitzgerald, during an interview Wednesday with the conservative radio host Charlie Sykes. Fitzgerald, a Republican from Juneau, said that school construction seems to be at the heart of much of the resistance to changing the state’s prevailing wage laws. His remarks implied that contractors rely on school projects to tide them over in tough economic times, which also happen to be when having a minimum prevailing wage is most helpful in retaining workers who have the most skill and experience.

But examined more closely, schools become the obvious places to try out repeal. To see why, the first step is to first clear away the piles of studies that purport to answer whether repeal would actually make public projects cheaper.

Predictably, many of these conclude that eliminating prevailing wages will save taxpayers money. Just as predictably, other studies foresee the exact opposite result, largely because cheap work is often shoddy work requiring frequent repairs.

Put these differing conclusions aside, and what’s left? A basic argument that prevailing wages are needed as a check on governments’ common obligation to award public-works contracts to the lowest, responsible bidder.

Without prevailing wages, defenders argue, contractors would find that they would be constantly outbid on government projects unless they reduced what they paid their workers. Construction workers who suffer the pay cuts – especially those with the most years and skill – would in turn reach a point where they had had enough. Many would simply pick up stakes and try their fortunes in another industry.

The strength of this argument is often lost on worshipers at the shrine of free markets. For most of them, the goal is to replicate as much as possible for public projects the conditions that exist for private projects.

But a government that is obliged to award contracts to low bidders is decidedly not the same thing as a private company operating in the free market. A private owner is largely free to contract with any company he wants. Sometimes a deal is made because a contractor put in the low bid, or — at times when the bid selected was not the lowest — because the contractor has a history of doing quality work.

But nothing dictates that a private owner has to even have his own best interests at heart. He could choose to contract with a company for no better reason than that it’s owned by his brother-in-law.

The circumstances are completely different — at least ideally — for public projects. Hence the misstep critics make when they argue that repealing prevailing wages would allow governments to act like private companies.

All this said, there is one type of local government in Wisconsin that is largely free from the obligation to award contracts to low bidders. Because of a convoluted series of court decisions, most schools in the state — the one exception being Milwaukee Public Schools — have never been subjected by state statute to low-bid requirements.

What better place, then, to test out a partial repeal of prevailing wages? Even with the compensation requirements eliminated, nothing would prevent school officials from disregarding the relatively high wages a particular company might pay its employees and contracting with it simply because of its history of delivering quality work.

Lawmakers who are trying to learn the benefits of repealing prevailing wages, all the while doing as little harm as possible to the construction industry, should take heed. The wage defenders’ own arguments have pointed the way.

About Dan Shaw, dan.shaw@dailyreporter.com

Dan Shaw is the associate editor at The Daily Reporter. He can be reached at dan.shaw@dailyreporter.com or at 414-225-1807.

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