The Wisconsin Wage

What Happened When Indiana Repealed Prevailing Wage

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Prevailing wage laws require that market-based wages and benefits are paid to employees on taxpayer funded public works projects. The prevailing rate is based on wage and benefit data from private sector construction projects; that’s why it is a true reflection of the local market.

Effective prevailing wage laws make certain that contractors compete for publicly funded projects based on skill, productivity, and efficiency – not on how little they can pay their workforce.

Sadly, despite Wisconsin’s tradition of skilled, well-trained, and family supporting construction industry, prevailing wage laws were repealed under the proven false pretense of cost savings.

Working For Wisconsin believes that prevailing wage laws that apply to both state and local government funded construction projects are of the utmost importance to protect taxpayers and workers alike, sustain the construction industry, and ensure the safest, efficient, and reliable work is performed on public construction projects.

WHY IS PREVAILING WAGE IMPORTANT TO YOU?

Wisconsin’s construction workers are among the most efficient in the country. In fact, a 2015 study named Wisconsin’s street, highway, and bridge construction workers the most productive in the Great Lakes region and the third best in the nation. [i]

Productivity in the construction industry is no fluke. Trained, skilled workers ensure that jobs are done safely and efficiently. Generations of prevailing wage law in Wisconsin helped make that possible.

Requiring a market-based, fair wage on public projects ensures that trained, skilled, and efficient contractors and workers compete on a level playing field against contractors that could underbid them with less qualified workers who are paid low wages.

Studies have shown that in states that have prevailing wage laws, workers on both public and private projects are more productive. Furthermore, they encourage workers to stay in a sometimes unpredictable construction industry preventing worker shortages when projects are most needed.  [ii]

PREVAILING WAGE = THE WISCONSIN WAGE

Protecting Wisconsin’s labor market from low-paid, out-of-state workers should be a priority for all elected officials. When Indiana weakened its prevailing wage law, it wasn’t long before its workers were losing out on jobs to workers from across the border.  [iii]

Wisconsin road construction workers are 43% more cost-effective than the national average. [iv] When workers are efficient it creates a win-win for everyone.  Better, faster work is good for the customer – the taxpayer.  Fair pay is good for the local worker, the local employer, the local economy, and economic development across the state.

It’s simple cause and effect: Wisconsin workers are better skilled and better trained, which in turn demands fair pay. That skill and training gets projects done sooner – saving taxpayer dollars and making sure that projects are done right the first time.

If a local rate, or a Wisconsin wage, isn’t enforced, it opens the door to cheap, less-skilled labor to take Wisconsin workers’ place on taxpayer-funded jobsites.

PREVAILING WAGE ELIMINATION ≠ SAVINGS

In Wisconsin, the well-respected, non-partisan Legislative Fiscal Bureau has concluded that “the evidence on prevailing wage effects generally range from relatively small effects to no statistically significant effects”. [v]

Prevailing wage simply reflects wages and benefits earned in the local private-sector construction market. Low-wage and high-wage employers compete against each other every day in the private sector. To suggest that prevailing wage drives up the cost of public construction ignores that dynamic and the fact that prevailing wage rates are determined by real wages paid for actual work on private sector construction projects like homes, businesses, hotels, and the like.

A 2013 Bowling Green University study concluded there was no evidence that a 1997 Ohio law exempting public school construction from prevailing wage regulations reduced projects costs.  While in Kentucky in 1996 when prevailing wage was applied to public school construction projects, the state saw no relative increase in costs.  [vi]

ELIMINATION OF PREVAILING WAGE HURTS WORKER TRAINING

There is a clear correlation between the level of worker training and development in the construction industry and the existence of prevailing wage laws. Wisconsin workers are well trained and standards are high. Research has found that repeal of prevailing wage has a devastating effect on worker training. In Kansas, registered apprenticeships plummeted by 38% after prevailing wage laws were repealed.  [vii]

FAIR PAY FOR HARD WORK 

Most people would agree that honest work deserves an honest wage. The construction industry houses some of the most dangerous jobs in the world.  Dangerous and difficult construction from welding, plumbing, pipe fitting, trench work, operating heavy machinery, rigging, and electrical wiring not only risk the safety of the worker, but risks our public safety when done by untrained low-skill workers.

A prevailing wage ensures fair pay for workers who work in dangerous professions. Elimination of prevailing wage laws drives down pay [viii] for these hardworking folks in states like Wisconsin that have made a safe, well-trained, self-sustaining construction industry a priority.  Repealing the prevailing wage opens the door to out-of-state day-laborers manning our job sites.

MYTHS

Proponents of repealing prevailing wage claim that it’s the “union scale” and that it’s higher than the market.  In fact, the rate is based on actual wages being paid to workers on private sector projects in the given market (usually a county).  The rate could be more, less, or relatively equal to the union rates in the given area – it all depends upon the local labor market.

The reality is that so-called free market, open border proponents make outlandish claims of savings to justify bad policy that drives Wisconsin wages down and opens the door to cut rate workers from other states who lack the skills and training possessed by many Wisconsin workers.


  • [i] Road and Bridge Construction Workers in the Midwest: Productive, High-Skilled, and Well-Paid. Frank Manzo and Dr. Robert Bruno.  March 2015
  • [ii] Wisconsin’s Prevailing Wage Law: An Economic Impact Analysis.   Dr. Peter Philips.  April 2015.
  • [iii]  Weakening Prevailing Wage Hurts Local Contractors and Workers: A Case Study from Southern Indiana.   Midwest Economic Policy Institute.  April 2016.
  • [iv] Road and Bridge Construction Workers in the Midwest: Productive, High-Skilled, and Well-Paid. Frank Manzo and Dr. Robert Bruno.  March 2015
  • [v] WI Legislative Fiscal Bureau Memo. March 27, 2015
  • [vi] Wisconsin’s Prevailing Wage Law: An Economic Impact Analysis.   Dr. Peter Philips.  April 2015.
  • [vii] Kentucky Prevailing Wage Law.   Dr. Peter Philips.  January 2014.
  • [viii] Kentucky Prevailing Wage Law.   Dr. Peter Philips.  January 2014.
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