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BUILD OUT EXCLUSIVE:  Are the Conclusions of a New Prevailing Wage Study Accurate

October 6th, 2020 | by NEWCA

Wisconsin Public Radio reports on a recent study by the Midwest Economic Policy Institute (MEPI) that claims the repeal of Wisconsin’s prevailing wage laws resulted in lower wages for construction workers in the Badger State.

According to the article: “Using data from the U.S. Census Bureau, the study shows that before the laws were repealed, the average annual income for full-time construction and extraction workers was close to $49,000. After the laws were repealed, average annual income was a little over $46,000, a drop of more than 5 percent. When the study removed factors such as education and age, the average annual income for workers was 6 percent less than income pre-repeal.”

But according to a legislative source familiar with the study and the repeal effort, who spoke to The Build Out on the condition of anonymity, the study is not using accurate data points to measure the repeal’s true outcome. It appears some of the data may have been manipulated to create an inaccurate picture of economic stress.

For example, the article references that the repeal vote took place in 2015, but the first stage—a partial repeal—did not occur until January 2017. The full repeal occurred in August 2017. Yet the study indicates that the bulk of the income numbers analyzed were from a period prior to the partial and full repeal.

By way of comparison, the median annual wage for a construction laborer in May 2017 was $38,890 according to the U.S. Bureau of Labor Statistics. 

Further, the study was largely composed of projects subject to prevailing wage, such as transportation. This means these projects would therefore be covered by the Davis-Bacon Act. The Federal prevailing wage law.

Therefore, the state repealing of prevailing wage would have had little if any impact on the outcome of these projects and related wages.

The article also states: “Two of Wisconsin's neighboring states with prevailing wage laws in place showed a smaller drop in annual average income between 2015 and 2018.” While Illinois and Minnesota’s drops were smaller than Wisconsin’s decrease, it offers another logical explanation that the variation was dictated by the ebbs and flow of our country’s economy at that time.

You can read the entire article here.

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