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Home / Commentary / OPINION: Prevailing-wage repeal, not as benign as some would have you believe

OPINION: Prevailing-wage repeal, not as benign as some would have you believe

Dave Branson

Dave Branson is president of the Wisconsin Building Trades Council.

Prevailing-wage laws require that construction workers on public construction projects be paid the wages and benefits offered on similar jobs performed by local Wisconsin workers.

This is by no means an extreme idea. In fact, in a recent poll, 83% of the respondents who identified themselves as likely Wisconsin voters said they believe that bid prices for public works should take into account wages and benefits that are comparable to those paid in the same trades elsewhere in the state. Sixty-one percent specifically said they support prevailing-wage laws.

In other words, the public understands that public-works projects should stimulate the local and state economy by properly paying Wisconsin workers. John Mielke and the organization he runs, the Associated Builders and Contractors of Wisconsin, clearly disagree.

After the repeal of state prevailing-wage laws for municipal projects, we saw a nearly 40% increase from 2015 to 2018 in the number of out-of-state contractors winning municipal public works projects in Wisconsin. In 2018 alone, more than $160 million worth of municipal public-works projects were awarded to out-of-state contractors.

For every dollar of construction value that is completed by an out-of-state contractor, economic activity decreases by $2.26 in Wisconsin. In 2018, Wisconsin lost more than $361 million worth of economic activity by having out-of-state contractors perform these local taxpayer-funded projects. It is too soon to measure the effects of losing prevailing-wage protections on state-funded projects, but we can all assume the outcomes will be similar.

I agree with Mr. Mielke that the U.S. economy is growing and that contractors in Wisconsin are scrambling to find skilled workers. Simple principles of supply and demand require the wages of these workers to increase.

We disagree, however, with the idea that the elimination of prevailing-wage protections is sound public policy. The elimination of prevailing wages was intended to lower blue-collar wages, which is bad for our economy. When this building boom comes to an end and the wages of construction workers follow that decline without the floor of prevailing-wage protections, these workers will leave the industry. The number of new workers who will be there to fill the void will be insufficient, since recruitment is not easy when you have to tell potential applicants their wages are on a downward trajectory.

The Wisconsin Building Trades Council represents more than 40,000 construction workers in Wisconsin. These building-trades members and their contractor employers pay for 95% of all construction apprenticeship training in Wisconsin, spending approximately $30 million a year. In states that eliminate prevailing-wage laws, apprenticeship programs eventually decline by as much as 42% because the workers who are subjected to huge wage cuts are unable to allocate part of their pay towards training programs. The ABC’s answer in those states is twofold: ask state taxpayers to pay for apprenticeship programs and promote public policies that allow “guest workers” from other countries to supplant local workers.

In Wisconsin, the ABC has already requested millions in taxpayer subsidies to pay for training its workforce. Will it now join the call of its fellow ABC affiliates in southern states and request the importation of guest workers to take our construction jobs? Is that the future we want for Wisconsin? It appears for the ABC, the answer is yes.

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