Report: Wage repeal would cost taxpayers more than $300 million a year (UPDATE)

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Repealing what remains of Wisconsin’s prevailing-wage laws would cost taxpayers more than $300 million a year, according to a new study.

The study, from the the nonprofit research group Midwest Economic Policy Institute, analyzed two previously published reports that looked at how construction workers’ wages would be affected by a total repeal of Wisconsin’s prevailing-wage laws.

Those studies, which came from the Wisconsin Taxpayers Alliance and the state’s Department of Revenue, concluded that the wages of construction workers on public-construction projects would be cut anywhere between 14 percent and 44 percent.

As a result, “it would mean thousands more Wisconsin workers would be on government assistance, and Wisconsin’s state government would have significantly less tax revenue to pay for these benefits,” Frank Manzo, policy director at the Midwest Economic Policy Institute, said in a news release.

The current wage for skilled construction workers, for instance, is now $51,600 per year. A 44 percent decrease in pay would mean workers who are employed on public-works projects would earn less than $29,000 a year.

This would make families of four in which the parents are employed in construction able to receive more than $16,000 a year in government-subsidized health, food and heating assistance, plus another $5,000 each year from the Earned Income Tax Credit, according to the report. The wage reduction would also cause construction workers to pay about $4,800 less in state and federal income taxes a year on average.

The release of the Midwest Policy Institute’s report prompted Democrats in the Wisconsin Legislature to hold a news conference on Tuesday once again expressing opposition to their Republican colleagues’ plans to repeal the remaining prevailing-wage laws for state-commissioned projects. State Assembly Minority Leader Peter Barca, a Democrat from Kenosha, noted that Republicans are often the first ones to push for policies meant to reduce people’s reliance on public assistance.

“I’ve heard my colleagues across the aisle say repeatedly that they want to give people a hand up not a handout,” Barca said in new release Tuesday. “Repealing prevailing wage does the exact opposite of that as it actually assures more workers will need government assistance.”

The Midwest Economic Policy Institute is an Illinois-based nonprofit group whose research is regularly cited by organizations that oppose repealing the state’s prevailing-wage requirements. One such group is the Wisconsin chapter of the American Legion, which argues that repealing the requirements would disproportionately harm veterans employed in the construction industry.

Wisconsin lawmakers, having recently repealed prevailing-wage requirements on locally funded projects, are considering doing the same for those commissioned by the state.