MADISON — Republican state lawmakers say eliminating prevailing wage requirements for workers on public projects would save the state hundreds of millions of dollars, while Democrats and unions say it would send skilled workers out of state and further erode the middle class.
The Senate Committee on Labor and Regulatory reform held a public hearing Monday on a proposal to end minimum salary requirements on state construction projects. The Legislature in 2015 ended prevailing wage on local projects, which took effect earlier this year.
Sen. Leah Vukmir, the bill's sponsor, said removing the minimum salary requirements for workers on public projects would save the state hundreds of millions of dollars in construction costs. She also said it would increase competition by giving non-union firms the chance to bid on public projects.
But Democrats and union workers argue repealing prevailing wage on state projects would hurt middle-class workers.
"We have an income inequality issue in this country. Your bill makes it worse," said Democratic Sen. Robert Wirch.
Several union workers also testified against the measure, saying it will drive skilled workers and veterans elsewhere.
Dan Bukiewicz, president of the Milwaukee Building and Construction Trades Council, said removing the prevailing wages will open the door for firms from other states to win work and decrease local workers' wages.
Republican Rep. Rob Hutton, a cosponsor, said prevailing wage requirements increase the costs of building projects by 10 to 15 percent. A 2015 analysis by the Legislative Fiscal Bureau said research on the impact of prevailing wage laws on construction costs is "mixed and inconclusive," with findings ranging from small cost savings to insignificant differences.
Business interests, including the Associated Builders and Contractors of Wisconsin, Wisconsin Manufacturers and Commerce and Americans for Prosperity, support the measure.
Eric Bott, a lobbyist for Americans for Prosperity of Wisconsin, said repealing the law would make taxpayer money go farther.
"Repealing prevailing wage laws reduces construction costs directly by eliminating hyper-inflated super-wages and indirectly by injecting greater competition into bidding," he said.
Republican Gov. Scott Walker in his budget proposed eliminating it for state projects, but the budget committee stripped out that proposal along with others that the Legislative Fiscal Bureau deemed non-fiscal policy items earlier this month. That prompted Vukmir and Hutton to introduce a standalone bill.
Walker said Monday he didn't care that the measure was removed from his budget and introduced as a bill as long as it passed. Eliminating prevailing wage, he said, would be "one more tool to make sure taxpayers get a better bang for their buck."
Twenty states do not have prevailing wage laws. The federal government still requires prevailing wages on projects paid for with federal funds.