Wisconsin Reforms Prevailing Wage Law

Published October 14, 2015

Language in the final version of Wisconsin’s state budget approved by lawmakers and signed into law significantly reforms the state’s prevailing wage laws and reduces construction costs borne by taxpayers.

The budget item, inserted by state Sen. Frank Lasee (R-De Pere), repeals prevailing wage requirements for all local government and government school construction projects funded with local taxpayers’ money.

Taxpayers, Governments Both Win

Lasee says local governments will be able to do more for taxpayers while allowing them to keep more of their money.

“Schools, local governments, and public utilities who may have been saving funds, waiting for more capital, or just waiting for the right market or bid before starting a project will now have great incentive to build, improve, or renovate,” Lasee said. “Taxpayers, both at the state and local level, will win. This will either be in the form of lower taxes or by stretching the dollars spent on public projects further, … getting more roads or buildings for the money.”

Middlemen Lose

Cutting out middlemen such as lawyers and organized labor is a win for everyone else, Lasee says.

“Previously, trial attorneys, on behalf of unions, would sue local governments after the project was completed to dispute the wage determinations for the workers on the project,” Lasee said. “This court action was usually frivolous, but would often cause settlements well above the project’s costs planned for. This did great harm to taxpayers and government budgets. 

“This detrimental third-party practice will be ended as a result of our reform,” Lasee said.

Supply and Demand

David Denholm, president of the Public Service Research Foundation, says the reform to the state’s prevailing wage laws should increase infrastructure improvements.

“There is no doubt that this bill would provide an incentive for more construction,” Denholm said. “It is an economic axiom that the more something costs, the less you buy of it.”

‘The Public Benefits’

“If there are any losers in prevailing wage reform it is … building trade union officials,” Denholm said. “The public benefits in many ways, from lower costs to better infrastructure maintenance.

“There are frequent reports that the infrastructure is in poor repair,” Denholm said. “This legislation would permit governments in Wisconsin to do more to correct that.”

Matt Hurley ([email protected]) writes from Cincinnati, Ohio.

Internet Info:

Sarah Dunn, et al., “The Effects of Prevailing Wage Requirements on the Cost of Low-Income Housing,” Industrial and Labor Relations Review: https://heartland.org/policy-documents/effects-prevailing-wage-requirements-cost-low-income-housing/