In a time when the state of Wisconsin should be doing everything it can to promote economic development and job creation, there has been action taken at the state level that would do just the opposite. The Department of Workforce Development (DWD), backed by a proposal in Governor Doyle's budget, has changed its interpretation of the state's laws regarding prevailing wage. Although prevailing wage situations are not a commonly discussed topic, the expansion of prevailing wage law will have the result of increasing construction costs and will slow future business development in our state.
Currently, state and local governments must pay the prevailing wage rates on highway construction and other public works projects. The prevailing wage is determined by the DWD for geographical areas, based on a small survey of the pay and benefits received by a majority of the workers in the respective trades in that locality. In general, the prevailing wage rate is the rate paid to union workers.
However, the DWD has recently issued retroactive rulings for 13 communities that would reverse the long-held assumption that projects where government is not the contracting party are not subject to prevailing wage. In addition, the language on page 727 of Governor Doyle's budget would echo this interpretation and change state law to subject private construction projects receiving any public assistance to the prevailing wage. This new requirement would apply even to projects privately constructed that would continue in private ownership after completion.
To illustrate the negative potential these policies will have on economic development, we can look a recent ruling by the DWD on a project in Monroe. In this case, the DWD issued a ruling that the City of Monroe is required to seek a prevailing wage rate for the Wal-Mart and Menards projects. Although they both are private projects, the new ruling would mean a higher wage would have to paid, thus increasing the project costs by thousands. It is possible that if these businesses would have known about the increased costs in the future, they would not have chosen to expand, construct and invest in our area.
In summary, the expansion of the prevailing wage laws would result in much higher construction costs and therefore make Wisconsin a less attractive place to do business. In fact, lower bids from area smaller, non-union contractors would not be allowed. The DWD rulings and Governor Doyle's proposal would force development companies to hire contractors that pay the high union-level wages to all of their employees. The result of this anti-competition measure will increase the cost of construction and development projects and deter economic development in our state. I will continue to push for the removal of this provision from the budget and will support the passage of legislation that would reverse this interpretation of the law.
I want to hear from you, so please feel welcome to express your thoughts or let me know if I can be helpful to you in any way by calling 888-534-0080, e-mailing me at Rep.Davis@legis.wi.gov or by writing or stopping by 11 West, State Capitol, Madison, WI 53708.
- Rep. Brett Davis, R-Oregon, serves the 80th Assembly District, which includes all of Green County and parts of Lafayette, Rock and Dane counties.
Currently, state and local governments must pay the prevailing wage rates on highway construction and other public works projects. The prevailing wage is determined by the DWD for geographical areas, based on a small survey of the pay and benefits received by a majority of the workers in the respective trades in that locality. In general, the prevailing wage rate is the rate paid to union workers.
However, the DWD has recently issued retroactive rulings for 13 communities that would reverse the long-held assumption that projects where government is not the contracting party are not subject to prevailing wage. In addition, the language on page 727 of Governor Doyle's budget would echo this interpretation and change state law to subject private construction projects receiving any public assistance to the prevailing wage. This new requirement would apply even to projects privately constructed that would continue in private ownership after completion.
To illustrate the negative potential these policies will have on economic development, we can look a recent ruling by the DWD on a project in Monroe. In this case, the DWD issued a ruling that the City of Monroe is required to seek a prevailing wage rate for the Wal-Mart and Menards projects. Although they both are private projects, the new ruling would mean a higher wage would have to paid, thus increasing the project costs by thousands. It is possible that if these businesses would have known about the increased costs in the future, they would not have chosen to expand, construct and invest in our area.
In summary, the expansion of the prevailing wage laws would result in much higher construction costs and therefore make Wisconsin a less attractive place to do business. In fact, lower bids from area smaller, non-union contractors would not be allowed. The DWD rulings and Governor Doyle's proposal would force development companies to hire contractors that pay the high union-level wages to all of their employees. The result of this anti-competition measure will increase the cost of construction and development projects and deter economic development in our state. I will continue to push for the removal of this provision from the budget and will support the passage of legislation that would reverse this interpretation of the law.
I want to hear from you, so please feel welcome to express your thoughts or let me know if I can be helpful to you in any way by calling 888-534-0080, e-mailing me at Rep.Davis@legis.wi.gov or by writing or stopping by 11 West, State Capitol, Madison, WI 53708.
- Rep. Brett Davis, R-Oregon, serves the 80th Assembly District, which includes all of Green County and parts of Lafayette, Rock and Dane counties.
