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Prevailing Wage Faces Uncertain Fate in Wisconsin

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Some employees on public works projects are paid a “prevailing wage,” based on the industry standard.";s:

State lawmakers are considering whether to scrap the prevailing wage law. It requires government to hire workers for certain public projects at a wage that reflects the industry standard.

Lawmakers wrapped up a lengthy Senate committee debate on Tuesday, without acting on the divisive proposal.

Wauwatosa Republican state Sen. Leah Vukmir tried to convince colleagues to repeal the law.

She calls the prevailing wage “anti-competitive” and “anti-free market,” and says after some 80 years on the books, it’s time for change.

“If you look at what we are trying to achieve here and the goal of what we’re trying to do here is to provide relief to our local units of government who are seeing a significant inflation in the cost of their projects for no other reason than the fact that there is a law – an arbitrary law – on the books,” Vukmir says.

A number of people lined up to echo Vukmir’s words. Many were local government or school district officials, such as Mary D’Amour, president of the Mukwonago Area School District. She says the prevailing wage law hampers her ability to pinch pennies.

“You wouldn’t hire a contractor to build a home, and then pay an additional $15-24 more per hour for the same work. Prevailing wage is forcing our taxpayers to do that very thing with multimillion dollar projects,” D’Amour says.

Joshua Schoemann is another leader who’d like Wisconsin to repeal its prevailing wage. The county administrator for Washington County says local governments are already dealing with tight budgets.

“We’re supposed to take tax levy freezes and state aid cuts on an annual basis and continue to provide services to our citizens, and then at the same time pay for additional costs that we see in prevailing wage, and you’ve got us both coming and going,” Schoemann says.

The argument did not sway Democratic state Sen. Chris Larson of Milwaukee. He pointed to a study conducted by the non-partisan Legislative Fiscal Bureau. Larson says it casts doubt on likely savings if the prevailing wage law ends.

“Their concluding paragraph starts by saying ‘existing research on the impact of prevailing wage laws on construction costs is mixed and inconclusive,’” Larson says.

Larson says without the prevailing wage, contractors seeking public work might try to underbid each other. He fears they would cut wages and training resulting in lower-quality work.

A steady stream of people in the construction trades expressed similar concerns. Paul Christensen owns H&H Industries in Madison. He says he maintains a good work force because he pays well.

“What does motivate people is sincere appreciation and money. That’s how people get through life is being appreciated, recognized, and then also money is a driver in this world of where people go,” Christensen says.

Christensen says the state already has a shortage of applicants for thousands of skilled positions. He predicts fewer would enter the trades if wages drop due to a repeal of the prevailing wage.

“You honestly (thinking that) driving wages down is going to improve on how we can attract and then retain workers is foolish,” Christensen says.

Wisconsin is one of about 30 states with prevailing wage laws. Like Wisconsin, some are considering repeal.

The fate of the measure here is up in the air. It does not appear there are enough votes in the Senate or Assembly to scrap the law. Some legislative leaders say they’ll try to revamp the measure.

Ann-Elise is WUWM's news director.
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