The Wisconsin Senate Committee on Labor and Regulatory Reform approved a bill to remove restrictions on how state government agencies may partner with private businesses on capital infrastructure projects, allowing the bill to proceed to a hearing by the full state Senate.
The Wisconsin Senate Committee on Labor and Regulatory Reform recommended Senate Bill 216 for passage on May 3. The bill would repeal the state’s laws requiring the use of artificially inflated pay scales for taxpayer-funded projects, known as prevailing-wage policies.
Instead of allowing government contractors to determine their employees’ pay rates, prevailing-wage laws require government agencies to mandate the pay and benefits given to workers on projects such as construction and repair, often using inaccurate or skewed surveys sponsored by labor unions to determine the rates.
In 2016, Wisconsin repealed its prevailing-wage requirements on local government projects but retained the mandates for state projects.
SB 216’s sponsor, state Sen. Leah Vukmir (R-Brookfield), says the government should get out of the business of telling construction companies how to run their operations.
“Wages shouldn’t be artificially inflated on the back of taxpayers,” Vukmir said. “The free market, not government, should be in control of setting wages. The dollars used to prop up wages could be better allocated toward investments in education, sustaining critical community services, infrastructure, and needed tax relief that will help all Wisconsinites.”
Allowing market forces to set wages will enable the state to do more construction work with less taxpayer money, Vukmir says.
“Wisconsin is in the middle of a large transportation budget debate right now, and the savings from repealing the state’s prevailing wage would help lower costs and ultimately save taxpayers money in that arena,” Vukmir said. “As lawmakers, we have a responsibility to manage our state budget effectively so taxpayers are not overburdened and Wisconsin can afford needed infrastructure improvements, making our quality of life better for the next generation.”
Calling for New Ideas
Chris Rochester, director of communications for the John K. MacIver Institute for Public Policy, says prevailing-wage laws are outdated policies held over from previous centuries.
“The first prevailing wages date back to just after the Civil War and really became commonplace during the Great Depression,” Rochester said. “The intentions might have been good, but the real-world effect of these anti-free-market laws has been to prop up union labor, wall off the construction industry from lower-cost competitors, and increase the cost of public-works projects.
“A Depression-era law has no place in the 21st century, especially with taxpayers already drowning in government debt,” Rochester said.