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Prevailing wage repeal: Hurting blue-collar wages or saving tax dollars?

April 26, 2017 GMT

Critics of a proposal to fully repeal the state’s prevailing wage laws decried it Monday as an assault on the wages of blue-collar workers, while proponents framed the move as frugal stewardship of public funds.

A state Senate panel gave the proposal its first legislative hearing Monday.

If enacted, it would mark another crushing defeat for Wisconsin labor unions. They, along with legislative Democrats, are among the staunchest backers of a prevailing wage, a minimum wage requirement for workers on public construction projects.

The bill would eliminate all state-imposed prevailing wage requirements for projects funded by the state. That includes state office buildings, University of Wisconsin System buildings and state highway projects.

The bill’s Senate sponsor, Sen. Leah Vukmir, R-Brookfield, said it would save taxpayers “hundreds of millions of dollars” over time.

A recently released memo by the nonpartisan Legislative Fiscal Bureau found “existing research on the impact of prevailing wage laws on construction costs is mixed and inconclusive.”

As of the start of Monday’s hearing, two key state agencies that would be affected by the bill, the Department of Transportation and the Department of Administration, had not submitted estimates detailing its fiscal implications. A third, the UW System, concluded it “does not have adequate information to create a meaningful fiscal estimate for this bill.”

Sen. Bob Wirch, D-Kenosha, called the bill “terrible.” He and other critics questioned how it would affect the quality of workmanship on public projects and said it could open the door to out-of-state contractors to underbid local ones.

“We have an income inequality issue in this country. Your bill makes it worse,” Wirch told the proposal’s sponsors in the hearing.

Gov. Scott Walker, speaking to reporters at a separate event Monday, said he doesn’t care if prevailing wage repeal is accomplished through his budget or by a standalone measure such as the one heard by the Senate committee. Walker included the measure in his plan for the state’s next budget. But Republican leaders of the Legislature’s budget-writing committee removed it from the budget along with other non-fiscal provisions, meaning it may have to pass on its own.

“Either way, as long as it happens,” Walker said. “That’s one more tool to make sure taxpayers get better bang for their buck.”

Prevailing wage rates are calculated on a county-by-county basis for individual building trades. In Dane County in 2016, the prevailing wage rate for a plumber was $38.82 an hour. For a siding installer, it was $17 an hour. For a painter, it was $26.70 an hour.

Latest repeal effort

A complete repeal of prevailing wage laws would realize a long-sought goal of fiscal conservatives and business groups to abolish the Great Depression-era requirement.

Two years ago, Republican lawmakers and Walker moved to lift the prevailing wage requirement from projects funded by local units of government, such as cities, counties and school districts. That law took effect in January.

One key prevailing wage requirement would remain in place regardless of what state lawmakers do. Projects that use $2,000 or more in federal funds, including many state highway projects, would not be affected because they would remain subject to federal prevailing wage laws.

Eric Bott, state director for Americans for Prosperity Wisconsin, said other states that have repealed prevailing wage, such as West Virginia, have seen savings. Others, such as Ohio, have not reported poorer workmanship, he added.

Two who testified against the bill were Leroy Miller, a heavy equipment operator from New Berlin, and Luke Burnaman, a crane operator from Portage. Both are union members and U.S. military veterans.

Both men said they’re concerned about how prevailing wage repeal could affect veterans, who they and others who spoke Monday said are disproportionately represented in the building trades.

Burnaman said he and his family moved to Wisconsin from his native Louisiana last year, lured by the prospect of higher wages and better schools for his children.

He questioned why senators would mull prevailing wage changes after recently having increased their own expense reimbursements. State Senate leaders earlier this year approved a 31 percent increase in their daily per diem amount — up to $115 per day, compared to $88 per day last year, the Appleton Post-Crescent reported.

Both Burnaman and Miller are supporters of President Donald Trump, a Republican. Miller said he backed Trump in part because he pledged a $1 trillion plan to rebuild the nation’s infrastructure.

Miller said he sees a disconnect between that message and the prevailing wage bill, all of the sponsors of which are Republicans.

“If it wasn’t a problem, then we wouldn’t be here,” Miller said. “It’s going to hurt us.”

Reporter Matthew DeFour contributed to this report.