By Graham Kilmer
Wisconsin State Representative Christine Sinicki drives over the Hoan Bridge in Milwaukee every day, and she says she is thankful that recent construction is being done by highly skilled local iron workers.
However, a recent bill aimed at repealing Wisconsin’s historic prevailing wage law, has become a source of concern for Sinicki, as she believes a repeal could mean a serious reduction in the quality of work for infrastructure like bridges in the state. The Wisconsin Assembly bill 32, which would eliminate Wisconsin’s historic prevailing wage law, has sparked a debate divided sharply along partisan lines.
Some Republicans in state legislature believe a repeal of the prevailing wage law would lower construction costs by reducing construction labor wages. Democrats are voicing their concern over a possible reduction in the quality of Wisconsin construction work if the 82-year-old law is struck down. Recent studies quoted by both factions agree that repealing the prevailing wage law will ultimately lower the wages of government construction workers. Rep. Sinicki, a member of the assembly committee on labor, believes the prevailing wage law has worked very well, and has protected blue-collar workers for many years. Repealing the law would open the door for out of state contractors and lower-paid less skilled workers, said Sinicki.
“This is just another drastic bill to get at Wisconsin workers,” said Sinicki. Every year the Department of Workforce Development (DWD) conducts a survey in each of Wisconsin’s 72 counties, wherein the average wages and benefits of the area are calculated. These averages then are used as the prescribed prevailing wage for the labor used in any government funded construction projects.
“There is no special wage in prevailing wage, it is simply the average wage,” said Senator John Erpenbach, of the Joint Committee on Finance.
Rep. Rob Hutton, the author of the assembly bill to repeal the prevailing wage, said in a press release that the law causes “artificially inflated wages”. Hutton believes that repealing the law will save the state millions of dollars annually.
Hutton quoted a study conducted in Michigan by the Anderson Economic Group which found that exemptions from prevailing wage laws would have saved a total of $224 million dollars by reducing the costs of construction labor.
Repealing the prevailing wage laws has the potential to reduce government construction wages in Wisconsin by 14 percent, according to the Department of Revenue’s fiscal estimate for a repeal of the law.
“Repealing existing prevailing wage laws will not improve our economy and it will not save taxpayers money; that action would simply lower wages for our friends and neighbors,” said Sen. Erpenbach. Wisconsin construction wages only account for 26 percent of total construction costs, according to the most recent data from the United States Census Bureau.
States with prevailing wage laws pay construction workers 18 percent more in wages than states without prevailing wage laws, according to a study of the economic impact of Wisconsin’s prevailing wage law conducted by Professor of Economics Peter Philips at the University of Utah.
The study conducted by Professor Philips also noted that this higher investment in labor also encourages more investment in skilled labor.
“In states like Wisconsin with prevailing-wage laws and better pay, it is easier to train construction workers and to know that this investment in apprenticeship training will not be lost to the industry and know that trained workers will continue to accumulate additional experience without leaving the industry,” said Philips.
When Kansas repealed its prevailing wage law apprenticeship training fell by 38 percent.
Currently, 95 percent of Wisconsin construction apprenticeship and training expenditures are paid for by union labor-management programs, according to the study.
Opportunities for construction employment are expected to rise 21 percent in the next decade; the majority of which will require a three to five year apprenticeship training, according to a study conducted by Frank Manzo of the Midwest Economic Policy Institute and Professor Robert Bruno of the University of Illinois at Urbana-Champaigne. Wisconsin’s productivity is between 21 and 33 percent higher than the 18 states without prevailing wage laws.
