10:17 a.m. CT June 6, 2017
Out-of-state companies received $32 million in contracts for municipal projects in Wisconsin between January and April of this year, up from about $21 million during the same period in 2016. That represents a 53% increase.
Contracts that should be going to Wisconsin companies are now being given away to out-of-state companies from Florida, Kentucky and Missouri. The difference? No prevailing wage protection on municipal projects.
In 2015, the Wisconsin Legislature voted to end prevailing wage in local projects – a provision that took effect this January. Republicans in the Legislature are now considering a full repeal of the state’s prevailing wage law.
This law requires that construction workers on state construction projects be paid the wages and benefits prevailing for similar work in or near the locality in which the construction project is to be performed. The concept arises from the concern that unbridled competition among employers to pay low wages in low-bid public construction environment would lead to a less-skilled and less-productive workforce and to shoddy construction practices and unsafe public buildings and infrastructure.
While the Legislature was debating this issue in 2015, many of us had expressed concern that eliminating the law would cut wages and invite so-called “gypsy contractors” from out of state to bid on Wisconsin projects. Research conducted by Frank Manzo and his co-authors indicated that the amount of construction work that would be leaked to neighboring states would cost Wisconsin 6,700 jobs and $40 million in tax revenue, and reduce economic activity in the state by $1.1 billion. For every dollar of construction value that is completed by an out-of-state contractor, economic activity would decrease by $2.26 in Wisconsin.