MacIver News Service | June 22, 2017
By M.D. Kittle[Madison, Wis…] There are two things you need to know upfront about the state of prevailing wage reform in Wisconsin:
1. A bill that would end the requirement that an artificially set prevailing wage be applied to state-funded projects is at the moment trapped inside the GOP-controlled Legislature’s snarled transportation debate.
2. Democrats this week held a sparsely covered press conference on their deeply flawed study that suggests taxpayers stand to lose hundreds of millions of dollars on a government reform measure that could save local and state governments hundreds of millions of dollars.
State Rep. Rob Hutton, R-Brookfield, co-sponsor of the prevailing wage bill, said Wisconsin has made significant progress on repealing the anti-free market law in place since the Great Depression.
In January, a law that gives local governments the right to discontinue prevailing wages went into effect. While it’s too early to tabulate the full cost savings, a study by the nonpartisan Wisconsin Taxpayers Alliance found state and local governments could have saved as much as $300 million on vertical projects alone in 2014 had they possessed the freedom to bid on projects not bound by artificially high wages.
“The potential savings that would be achieved by repealing Wisconsin’s prevailing wage laws are staggering,” state Sen. Leah Vukmir, R-Brookfield, said in a statement. Vukmir is co-sponsor of the full prevailing wage reform bill.
But the bill is mired in a contentious transportation funding squabble in which Assembly and Senate Republicans seem miles apart on a revenue- and spending-plan for the troubled state Department of Transportation.
Statewide prevailing wage reform is tied to the transportation budget because of the potential savings it could bring.
“Right now it’s wrapped into the overall transportation discussion and a few proposals that are out there,” Hutton told MacIver News Service Wednesday on the Dan O’Donnell Show, on NewsTalk 1130 WISN in Milwaukee. “While I support that, I am deeply concerned about the fact that there is just really common sense conservative reform that needs to be passed regardless of what happens in the transportation budget.”
Hutton said he has had discussions with his colleagues about pulling prevailing wage from transportation as a standalone. Those discussions are ongoing.
Meanwhile, Democratic Party leadership this week “reacted to” a suspect study claiming the detrimental effects of fully repealing the prevailing wage.
At a Capitol press conference Tuesday, Assembly Minority Leader Peter Barca (D-Kenosha) and Senate Minority Leader Jennifer Shilling joined members of big labor and contractors – who have benefited from the competition-killing prevailing wage laws – to unveil the report.
The “Social Costs of Repealing Wisconsin’s Prevailing Wage Law’ was constructed by the liberal Midwest Economic Policy Institute, an assumed name for Illinois Economic Policy Institute, an organization that has been described as a union front group.
The study, according to the Dems’ press release, found that full repeal of prevailing wage could cost Wisconsin taxpayers more than $336 million annually.
How? Apparently the failure to pay artificially high wages would correspondingly draw down income tax revenue and force some workers on public jobs into public assistance.
“The worst case potential social costs of repealing prevailing wage” the report concludes, “range from $224 million to $337 million every year.”
“When worker wages are cut, they contribute less in state and federal income taxes. At the same time, more workers qualify for and rely on government assistance,” the study states.
The report includes many omissions, not the least of which is a labor shortage in Wisconsin, particularly in the construction trade, that has helped drive wages up – without the help of unions and government-mandated wages.
But there’s a bigger issue with the Dems’ drive to protect the prevailing wage.
“Apparently they are concerned about the middle class. Oddly enough, they pick and choose winners,” Hutton said. The winners are the companies who play ball with prevailing wage; the losers, beyond taxpayers, are the companies, often smaller firms, that can’t compete on artificially high wages and lose out. And so do their workers.
“They’re not as concerned about that person or their family that doesn’t have the opportunity to make the same wages,” Hutton added. “I find it disingenuous that the Democrats are one-sided on this issue, versus let the market decide and let those two neighbors and the firms they work for compete for those public construction jobs and whatever firm is best qualified and provides the best proposal, that firm wins, and the workers associated with that firm do as well.”
Perhaps such disparate treatment has something to do with the hefty amounts of big labor cash still coming into Democrats’ campaign coffers. Shilling took in $50,225 in union money between 2013 and 2016, according to the left-leaning Wisconsin Democracy Campaign.
Barca, who raised significantly less than Shilling, received $12,500 from organized labor – his biggest special-interest contributor by far – over the same period.
The nonprofit Illinois Economic Policy Institute pocketed a $25,000 donation in 2016 from AFL-CIO Local 49, according to information obtained by the Center for Union Facts. And the national left-leaning Economic Policy Institute often cites the Illinois think tank in its pro-union reports, according to the center.
Hutton points to the irony of one of the left’s key talking points on prevailing wage. Big labor backers insist Wisconsin will be swamped with outside contractors if it fully repeals the law, and yet opponents of reform have contracted with an Illinois research firm to help make their case.
“So while they are calling the kettle black, they themselves are doing the exact same thing,” the lawmaker said.
A call to Barca’s office seeking payment information regarding the study was not returned Thursday.