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Why Repealing Prevailing Wage Laws Costs States More Money

Wisconsin recently proposed repealing its prevailing wage law in hopes to save money. In reality this measure will cost the state nearly 9,000 jobs, $1.2 billion in revenue, $77 million in tax revenue, and will export around $500 million in construction investments out of state according to a study done by Smart Cities Prevail and Colorado State University. The data in this study shows that repealing the prevailing wage law will have no effect on the cost of these projects but will reduce productivity of workers and eliminate thousands of jobs in the state. Currently with the prevailing wage law in place, the state enjoys a 7% increase in worker productivity and a 2% decrease in material and fuel usage because the workers are highly skilled. These increases would easily offset any cost saving that the state might gain from repealing the prevailing wage especially since labor accounts for a mere 20% of any public works project.

Michigan also struggles with the same decision right now according to a study based on U.S. Census data the results could be catastrophic. Including the loss of 11,000 jobs, $1.7 billion in state GDP, and $700 million in new construction investment moving out of state. Research shows that workers in prevailing wage states are anywhere from 11-30% more productive than in states that do not have these laws. Governor Rick Snyder is apposed to this bill but a new petition could allow this decision to bypass him altogether by driving citizen initiated legislation. There is also a significant “ripple effect” from this repeal as non-prevailing wage states tend to use more out of state contractors. In conclusion prevailing wage is a good thing for everyone. By using highly skilled, drug-tested workers on construction sites jobs can be done correctly and efficiently with less waste.

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