One of the anti-worker pieces of the budget Wisconsin Gov. Scott Walker signed over the weekend partially repeals the state's longstanding prevailing wage law. Prevailing wage laws set a floor on what construction workers on publicly funded projects can earn, according to typical local wage levels. But repealing them doesn't just hurt workers—it hurts the communities that end up with shoddy work and it hurts high-road business owners who value their skilled workers. Oh, and it
doesn't save money, Alan Pyke points out:
School construction costs in Kansas didn’t drop at all compared to nearby states after the 1987 repeal of the prevailing wage. A 2004 study in Missouri found that prevailing wage projects cost about $78 per square foot, compared to $75 in states without the safeguards – a statistically insignificant difference. And a followup study in 2011 found that costs were actually about $10 lower per square foot with prevailing wage laws than without them, thanks to the productivity gains and workmanship quality that higher wages produce. [...]
Repealing a prevailing wage doesn’t just fail to lower taxpayer spending for public works. It can actually harm public coffers. Less income for construction workers means lower tax collections for the state and reduced consumer spending in the private economy. The Missouri studies estimated that between lost income to workers, lost tax revenue to the state, and lost economic activity for everyone, repeal would have taken at least $324 million out of the Missouri economy every year – and maybe as much as half a billion dollars annually.
Under Wisconsin's new law, cities and towns are barred from passing their own prevailing wage laws (just as, under Walker, Wisconsin cities and towns have been barred from passing sick leave laws), though some state projects will continue to go by the prevailing wage. That's bad news for construction contractors who want to keep using the skilled labor their projects require:
If somebody wants to undercut Dairyland, there isn’t much Martinez can do to stop them. Both contractors might know that the work required on a given project needs a $65 an hour mechanic. But there will be plenty of competitors willing to tell the buyer it can be done for $30 an hour instead. [...]
Standards slip across the whole of a system as a result – and not always in the kinds of egregious ways that a school district will notice and raise a stink over. “Will my lights turn on? Well, yeah, but they didn’t wire it properly, so if you need to change something down the line it’s going to cost you a whole lot more,” Martinez said. “Because the person who’s going to do that change properly has to first figure out what the other guy did improperly.”
But the reality of the prevailing wage isn't enough to stand against Scott Walker's desire to brag about all the ways he screwed Wisconsin workers.