Wisconsin Lawmaker Proposes Prevailing-Wage Repeal

Published January 26, 2017

A Wisconsin lawmaker has announced he plans to introduce a bill that would remove restrictions on how state government agencies may partner with private businesses on capital infrastructure projects.

In 2016, Wisconsin lawmakers repealed prevailing-wage requirements on local government agencies’ projects but retained the restriction on state projects.

In December 2016, state Rep. Rob Hutton (R-Brookfield) announced his plans to introduce a bill that would repeal the state’s prevailing-wage laws, which require the use of artificially inflated pay scales for taxpayer-funded projects.

Instead of allowing government contractors to determine their employee pay rates, prevailing-wage laws require government agencies to mandate the pay and benefits given to workers on projects such as construction or repair, often using inaccurate or skewed surveys from labor unions to determine the rates.

Competing for Construction Jobs

Hutton says his bill will benefit workers by making the market for government contracts more competitive.

“It will allow many workers to participate in labor projects they otherwise wouldn’t be able to, and it will expand the competition to many firms around the state that now can compete for those construction projects,” Hutton said. “This will allow their employees to certainly improve their wage scales, because they’ll now be able to provide their services for those projects.”

Hutton says his bill is about making government more responsive to the laws of economics.

“Supply and demand is really the driver for wage rates, in all capacities, including our skilled workforce,” Hutton said. “So, you have this scenario where there is a shortage of skilled workers, which continues to not only stabilize but increase the hourly wage for those workers, regardless of whether there’s a prevailing-wage law in place.”

Compliance Costs

Chris Rochester, director of communications for the John K. MacIver Institute for Public Policy, says prevailing-wage laws unnecessary add costs.

“Prevailing wage adds layers of bureaucracy and unnecessary costs to state projects in Wisconsin,” said Rochester. “It also shuts smaller companies out of the opportunity to bid on state projects, protecting the biggest entrenched interests, who can afford to pay the artificially inflated wage rates.”

Fair Fight for Funds

Rochester says taxpayers and business owners win when small businesses can compete on equal footing with bigger companies.

“A full repeal would give contractors who currently can’t compete with the big, established construction companies the opportunity to bid on more state projects, a tremendous opportunity for the people these companies employ,” Rochester said. “Taxpayers would also benefit because the state would be able to do more work with less money.”