By: Dan Shaw
May 3, 2019 11:48 am
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.