My column for the West Bend Daily News is online. Here you go:
Repealing Wisconsin’s prevailing wage laws would be one of the most beneficial and impactful actions that the legislature could possibly take this session, but it looks like it might not happen.
The prevailing wage laws were first enacted in Wisconsin during the Great Depression as a means of protecting local workers from losing work to migrant workers who might do the work for cheaper. It was one of many protectionist laws passed during that era. The law essentially requires any the businesses that work on any public project of a given size to pay the prevailing wages for the area in which the work will take place.
In practice, the prevailing wage laws mean that taxpayers must spend a lot more than necessary to get work done. The Wisconsin Department of Workforce Development sets the prevailing wage for an area by means of an annual survey. As the Wisconsin Taxpayers Alliance recently pointed out in a study, the survey is hopelessly flawed. Only about 10 percent of the surveys are completed and returned, and 87 percent of the respondents are union, as compared to only about 25 percent of the industry. In short, the “prevailing wage,” according to the DWD, is not representative of the actual wages being paid in that area. In fact, they are about 45 percent higher than the actual market rates.
While the same study says that the prevailing wage laws cost Wisconsin taxpayers as much as $300 million per year in unnecessary costs, let us see what that looks like in local terms. West Bend Mayor Kraig Sadownikow points out that West Bend does about $1 million per year in road maintenance. Most of that work is subject to the prevailing wage law. The end result is that West Bend can improve about 25 percent fewer road miles than it could if the taxpayers were allowed to pay the actual market labor price for those projects. Another way to look at the math is that with the same amount of money, West Bend could improve fully 33 percent more roads every year for the same money if the prevailing wage laws were not in effect. That’s a huge difference.
In another example cited by Sadownikow, the prevailing wage laws also apply to public projects that are not funded by taxpayers. In West Bend, private donations from local corporations and citizens were used to fund 100 percent of the improvements for the stage, pavilion and concession stand in Regner Park. Even though no taxpayer dollars were used, the prevailing wage laws meant that every dollar donated only purchased 75 percent of the products and services that they would have if the projects were on private property.
These two examples alone represent hundreds of thousands of wasted dollars for just one community. The prevailing wage laws are costing all Wisconsinites real money, and yet the Republicans in the legislature are seemingly unable to garner the votes to repeal them. Why? The excuse given for public consumption is that repealing the prevailing wage laws would harm the workers who are currently being paid the inflated wages, and that would harm Wisconsin’s economy. That is an incomplete picture. The money to pay for those inflated wages comes from somewhere — the wages of other Wisconsin workers. And the above-market wages being paid for public projects means that fewer projects are being done than could be. That means fewer people being employed to work on those projects.
But the real reason that some Republicans are opposing the repeal of the prevailing wage laws is the one that they won’t put in a press release. Many of the people who oppose the repeal are the owners and bigwigs of the large contractors that do most of those public projects. The large contractors love the prevailing wage laws because they artificially inflate the cost of labor and prevent newer, hungrier, companies from underbidding them. The law protects their business and their profits. And many of them are large political donors to Republicans.
In the end, we have the most basic of political calculations. The argument in favor of repealing the prevailing wage laws is a simple one of principle. The argument opposed is one of base political cronyism.
Sadownikow said it best. The laws of supply and demand work far better than the prevailing wage laws. Wisconsin’s legislative Republicans should remember that.
(Owen Robinson is a West Bend resident.)
Owen,
Congratulations on another great column. “Political cronyism” is as accurate as it could be described. Catering to certain unions while hanging others out to dry for political survival is wrong. Many of the large contractors you speak of utilize a mostly union work force. As a matter of principle this standard should be universally applied. The political fall out for Republicans, should the repeal be successful, will be significant but well worth it to the taxpayers.
There is an important line in Owen’s piece regarding why PW laws were first passed. To protect local workers from losing jobs to migrant workers. That’s the part most of the pundits going on this anti-PW rampage are missing. Virtually none of them have any experience with construction in the South where there are no PW laws.
When you dump PW, what is going to happen is that new contractors are then going to compete to find lower cost workers (a good thing). However, they are going do what their brethren in the South do, and that is hire illegals. As a result, the Wisconsin tradesmen are going to get underbid by a migrant work force resulting in a situation that in my opinion would not be good public policy for the State nor the US.
Now, I’m sure Jaded would tell me that the immigration laws would be followed here. Of course, 40-50 million illegals in the US right now being granted drivers licenses, in-state tuition and soon amnesty would tend to disprove that big business cares about enforcing immigration laws when there is profit to be made.
And if the State of Wisconsin decided to follow immigration laws, that would last only as long as the GOP controlled things at the State level. Further, as we saw with the State of Arizona and their 1070 law, the US Supreme Court generally strikes down any attempt by a State to enforce immigration issues.
PW is not perfect. There are people who benefit from PW right now. But I’m willing to deal with those imperfections, given that I know where things are headed the minute PW gets repealed. You’re going to be driving through Highway 33 construction, passing by a crew of 15 illegals supervised by one US citizen contractor. And yes, the State of Wisconsin will be “saving money” on the project, but at the cost of decent paying jobs now held by Wisconsin tradesmen.
Steve,
I think what you say is probably accurate. I did say that union operations typically are better at controlling the use of illegals. I haven’t actually come out in opposition or in support of PW. I have tried to point out the political motivation or lack there of. I would argue that the number of undocumented immigrants is far less then “40 -50 million”. You can check that fact with the Pew Research Center or the Migration Policy Institute. Thanks for including me and if there’s anything else I can help with please feel free to include me again.
I agree with Steve and Mark Belling’s column today . The sun also came up in the West .
i disagree with JA . This is a terrific short win for the part of the party that wants purity over votes .
It is also classic over reach on top of cutting aid to education .
Classic construction types are rarely liberals . When they are in a race to the bottom to find the cheapest laborers , the Wisconsin tradition of quality construction goes out the window with it . And with them goes the $, Walker and his cronies have thrived on.
So , please continue .
Over reach is super predictable and super fun to watch .
Interesting perspective Steve
I’ve been pretty anti-PV, but this might get me to reconsider and instead push for a compromise. I think the current “qualifying thresholds” of $48,000 and $100,000 are pretty absurd.
Maybe keep the same law but boost it to $250,000 for single trade projects and $500,000 for multi trade projects, and everything below those threshholds is exempt from PW?
This would help small towns/municipalities, while ensuring that the BIG projects (that would cause the problems Steve mentioned) still remain subjected to Prevailing Wage?
I’m anti-PV and believe there should be a vote on it to see who stands by principle. The migrant worker excuse is a red herring spewed by pro-union big money. I say be big, be bold, and be unintimidated.
M&M
The “terrific short win for the part of the party that wants purity over votes” could possibly cost the party control next election cycle. I think many considering that possibility.
Eh SA,
Yo no te acordar con su opinion de inmigrantes.
My problem with your argument, Steve, is twofold. First, as a matter of principle, I would rather let the laws of supply and demand sort that out. I do not think it is the purview of government to protect one class of citizens at the expense of another. While prevailing wage may protect the tradesmen (“may” because there would be more jobs to do without prevailing wage and thus more jobs), it comes at the expense of higher taxes, or less value for their taxes, for all Wisconsinites.
Second, the fear of immigrants doesn’t hold water. California, Texas, and New Mexico have a prevailing wage law (http://www.dol.gov/whd/state/dollar.htm). The only southern border state that does not is Arizona. So when you say, “However, they are going do what their brethren in the South do, and that is hire illegals,” it is true that contractors in border states hire more illegals, but clearly the prevailing wage laws doesn’t prevent that.
A friend recommended this site and said I would appreciate how “some” individuals take the time to post well thought out and researched opinions that consider the big picture. I’m starting to see some examples of that. I hope i can follow suit.
JA
Agreed
I have a dog in this fight but I think Steve will argue my case better than I will here
Owen, what the prevailing wage law does in Wisconsin is keep Wisconsin tradesmen in the field doing the work and thus always available as a workforce in place. If we significantly cut their pay by repealing PW, what happens is many of them are going to start looking for other job and career opportunities to support their families. Go to Southern States without PW and you’ll find thousands of stories of tradesmen and carpenters who had to get out of the business because they couldn’t support their families on the wages the contractors were paying due to illegals coming in the past 10-15 years. The same is going to happen here in Wisconsin.
PW does act as a barrier to economic competition and does artificially raise prices. Again, I totally agree with that thought. However, if/when PW is struck down, companies will compete on price like demons. Contractors will take about ten seconds to figure out that if they can sneak in a 20 man drywalling crew from Guatemala on a job, they can win the bidding.
As with other industries in the US, this process won’t take years but rather months to take place. We’ll soon see experienced Wisconsin tradesmen who do work hard for their paycheck displaced. I’m fine with those tradesmen being replaced by other Wisconsin citizens willing to work for less. I’m not fine with those tradesmen being replaced by illegals from the south.
Again, I’ve seen this throughout the South. I appreciate what people like Nass, Duey and Sykes do for the conservative movement. But I’d like them to tour construction jobs for a day in Denver, Raleigh or Dallas. The level of illegals doing the lower skilled jobs can run as high as 70-80%, even on government jobs. It is coming to Wisconsin if we repeal PW. In light of this, I don’t view PW as a conservative priority, but rather a necessary compromise to keep Wisconsin workers employed.