My column for the West Bend Daily News is online. Here you go:
Another battle in the long war to repeal Wisconsin’s Prevailing Wage Laws was launched this month when Sen. Leah Vukmir (RBrookfield) and Rep. Rob Hutton (RBrookfield) reintroduced a bill in the state Legislature to repeal the prevailing wage law for state projects. The bill faces an uncertain future in the face of massive opposition from powerful special interests.
Wisconsin’s prevailing wage “law” is actually a series of laws that were passed during the Great Depression with the goal of protecting local workers from losing their jobs to migrant workers who were willing to work for lower wages. The law essentially requires that any businesses that work on a public project of any size must pay the prevailing wages for the area in which the work takes place.
The prevailing wage is determined by a flawed process by the Wisconsin Department of Workforce Development that heavily favors inflated union wages. The result is Wisconsin’s prevailing wage law protects large, unionized contractors at the expense of inflated prices for taxpayers and non-union contractors.
Intrepid conservative Wisconsin lawmakers fought hard to fully repeal the prevailing wage law in the 20152017 state budget. The result was a compromise that repealed the prevailing wage law for local governments and school districts, but left it in place for state projects. The bill from Vukmir and Hutton would finish the job by repealing it for state projects too.
The reason the fight to repeal the prevailing wage law is so heated is quite simple: money. As it stands, Wisconsin’s prevailing wage law props up the profits for some of Wisconsin’s largest private contractors. Those contractors donate an extraordinary amount of money and support to politicians on both sides of the aisle who like to spend taxpayer dollars on big, expensive projects.
In the 2015 battle over prevailing wage, Assembly Speaker Robin Vos and other members of the Assembly leadership actively worked to thwart the repeal of prevailing wage. They could not resist the overwhelming public pressure and were forced into the compromise repeal. Last legislative session, Representative Andre Jacque had the temerity to hold a hearing on prevailing wage reform in his role as the Chairman of the Assembly Labor Committee. Jacque’s fellow Republican,
Vos, punished Jacque by stripping him of his chairmanship for the current session.
The reason to repeal the prevailing wage law is one of conservative principle – or of laissez-faire economics, if you prefer. The government should not enforce artificial labor prices or meddle in the free market. Wisconsin’s prevailing wage law does just that and it results in the government distorting the market and encouraging crony capitalism.
While one would like to think that our state lawmakers would consistently act on principle, repealing the prevailing wage law would also be in their self-interest.
There is another war waging in the Legislature over transportation spending. The prevailing wage law aggravates that issue by inflating spending on state transportation projects. A 2015 study by the Wisconsin Taxpayers Alliance showed the state’s prevailing wage law was responsible for up to $300 million per year in unnecessary costs. In terms of Wisconsin’s biennial budget, that is potentially $600 million that could be used for additional transportation spending without borrowing or raising taxes. Such a windfall would release a lot of the political steam that is heating up the debate over transportation spending.
While it was disappointing that Wisconsin’s prevailing wage law as not fully repealed in 2015, state lawmakers now have the opportunity to finish the job for the benefit of state taxpayers. They should quickly pass Vukmir and Hutton’s bill and put it on Governor Walker’s desk – preferably before the state budget so that lawmakers can include the potential windfall savings into their budget calculations.