WISTAX Study:  State Prevailing Wage Laws Cost Taxpayers $200 Million or More

A just-released study from the Wisconsin Taxpayers Alliance (WISTAX) says the state’s law mandating inflated pay and benefits on public projects cost taxpayers at least $200 million last year.

WISTAX looked at Wisconsin’s law on prevailing wages, which sets minimums for wages and benefits for larger public construction projects. The study, paid for by groups that support repeal of the existing state law, found state and local taxpayers would have saved anywhere from $200 to $300 million if  market-based rates were paid on such projects.

The study’s authors critique the law’s narrow methodology in calculating prevailing wages and the inability of prevailing wage rates to mirror industry wage trends or regional disparities. Prevailing wage rates are overestimated by 23 percent compared to federal Bureau of Labor Statistics (BLS) wage data for the same Wisconsin workers. When worker benefits are added in, taxpayers are paying for labor costs that are inflated by as much as 45 percent.

Bills to repeal Wisconsin’s prevailing wage law have been introduced in both houses (Assembly Bill 32 and Senate Bill 49) and currently await a public hearing.  The WASB is on record in support of these bills.

Read more:  Wisconsin State Journal; Appleton Post-Crescent; MacIver News Service