Study Says Prevailing-Wage Repeal Would Cost States More in Food Stamps

June 24, 2017 
By Steven Wishnia and Neal Tepel

Madison, WI – Repealing its prevailing-wage law would cost Wisconsin more money in public assistance and lost revenues than the state would save on construction contracts, a study released June 19 by the Midwest Economic Policy Institute says.

If the state could hire contractors who paid workers 44% less, as repeal supporters have argued, that would cut the average building-trades salary to less than $29,000 a year, it found—and that would cost the state more than $18 million a year in lost tax revenues, $6 million in earned-income tax-credit payments, and $38 million in food stamps. Once federal taxes and health-care costs were factored in, it said, “the worst-case potential social costs of repealing prevailing wage range from $224 million to $337 million every year.” “I’ve heard my colleagues across the aisle say repeatedly that they want to give people a hand up, not a handout,” Assembly Democratic Leader Peter Barca said at a news conference at the state capitol June 20. “Repealing prevailing wage does the exact opposite of that, as it actually assures more workers will need government assistance.” Read more