Earlier this year Wisconsin completed its repeal of its prevailing wage laws. Wisconsin began its prevailing wage assault by previously repealing prevailing wage requirements for local governments. Data collected by the Wisconsin Coalition of Contractors showed that from January through April of 2017 out-of-state contractors received $32 million in contracts for municipal projects in Wisconsin. This represented a 53% increase over the same time period for 2016, when municipal projects were subject to prevailing wage requirements. This jump in work being awarded to out of state contractors obviously harms Wisconsin construction businesses, but is also likely to have a negative impact on other Wisconsin businesses as money is taken home by these contractors instead of being spent and invested in Wisconsin. Likewise, Wisconsin’s tax revenues dwindle as less money is spent in the state.
Of course Wisconsin construction workers also stand to lose with the repeal of Prevailing Wage requirements. In repealing its prevailing wage laws Governor Walker and the Wisconsin Legislature are sending a message: that they believe construction workers in Wisconsin are overpaid, and should work for less. At the same time that Wisconsin is trying to cut Wisconsin construction worker wages one of its Senators, Ron Johnson, is proposing an overhaul of the visa system in the United States. Senator Johnson’s proposal would shift visa decisions from the federal government to the states, and would also result in a significant increase in the amount of visas issued. In discussion of this proposal, construction is often mentioned as an industry where there is a shortage of labor, both in Wisconsin and nationally.
If there truly is a shortage of construction labor in Wisconsin, it seems odd that Governor Walker and the state legislature are seeking to cut their wages. In fact, if there is a shortage of construction workers in Wisconsin, necessitating an increase in the amount of visas for Wisconsin construction workers, construction wages should be increased, not decreased by the state legislature. As construction wages are decreased in Wisconsin, any shortage of construction workers in Wisconsin will very likely worsen; an industry requiring demanding physical labor from its workers, which already needs more workers than it has, is unlikely to attract more workers with lower wages. Going forward it looks like Wisconsin will be making up for any shortages of construction labor with construction workers from out of state and maybe even out of the country.