Republican lawmakers on Wednesday argued for a repeal of Wisconsin's prevailing wage requirements.
Under current law, workers on local and state construction projects must be paid what's called a prevailing wage set by the state.
Rep. Rob Hutton, R-Brookfield, said discussions are occurring with leadership in both chambers of the Legislature about how to best address the issue.
Hutton, the legislation's Assembly sponsor, and other critics of the prevailing wage say the requirement over-inflates the costs of publicly funded projects at the expense of taxpayers.
Opponents of the bill argue that repealing the prevailing wage would result in lower wages, ultimately harming the middle class and driving skilled workers away from Wisconsin.
Hutton cited a Wisconsin Taxpayers Alliance study that found flaws in the way the state's prevailing wages are calculated. According to the study, the prevailing wage added as much as $299 million to the cost of state and local projects last year.
The goal of the study was not to evaluate the merits of prevailing wage laws, but to evaluate the state's method for such calculations, wrote WisTax president Todd Berry.
The WisTax study was funded by Associated Builders and Contractors (ABC), a trade association representing 800 non-union construction companies within the state. ABC is one of nine groups lobbying in favor of the bill. Others include Americans for Prosperity, the Wisconsin Counties Association, the Wisconsin Association of School Boards and the National Federation of Independent Business.
ABC president John Mielke said Wednesday that complying with prevailing wage laws can place too much of a burden on small contractors, saddling them with additional expenses or discouraging them altogether from bidding on contracts.
But opponents of the repeal argue that the WisTax study itself is flawed. The Wisconsin Contractor Coalition, an organization representing about 450 union and non-union businesses, commissioned a critique of the study from University of Utah economics professor Peter Philips.
Philips argued that the WisTax study underestimated the level of union representation in the nonresidential construction labor force, rendering its findings of one flaw in the calculations inaccurate.
The $229 million savings projected in the WisTax study is "a mirage," according to Philips.
Groups lobbying against the proposal include several unions, construction companies, the City of Madison, Dane County and the Wisconsin Transportation Builders Association.
They say the bill is another attack on Wisconsin workers, following closely after the fast-tracked passage of right-to-work legislation last month.
Assembly Minority Leader Peter Barca, D-Kenosha, accused the Republican lawmakers supporting the bill of ignoring the opinion of more than 400 businesses in passing right-to-work and in pushing for the repeal of prevailing wage requirements.
"Repealing prevailing wage would be another huge hit against the middle class and small businesses in Wisconsin. Over the last decade, Wisconsin has been the worst state in the nation for the middle class," Barca said in a statement. "Wisconsin’s road and bridge construction workers are some of the most productive in the nation – with low costs per mile and excellent training. The bottom line is that Wisconsin has a system that works and Republicans want to dismantle it knowing that it will drive down wages."
Hutton said the proposal could go through the Legislature as an individual bill or could also be incorporated into the biennial budget. As part of the budget, it would not be voted on separately.
Asked why the proposal calls for a full repeal rather than reforming the formula by which the prevailing wage is calculated, Hutton said much as changed in the 80 years since prevailing wage requirements became part of Wisconsin law.
"I think you can make the strong argument that this law is irrelevant in general," Hutton said. "So to go about tweaking it, I think you have to make the argument for why you want to tweak a law and provision that really has no real merit and real benefit to a state or even on a national basis."
However, Hutton added, there are some "tweaks and reforms" that could be considered down the road.
Hutton argued that the bill has "no relation to lowering wages."
"When you're talking about union workers in this case, those union wages are really contracted with their employers," Hutton said. "Those are arbitrary wages that this bill doesn't affect whatsoever.
With a repeal of the prevailing wage, Hutton said, more contractors will bid on public projects.
"Expanding participation amongst bidders on public projects will alone drive down the cost for those projects," he said.