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Apr
2015
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Prevailing Wage Repeal Will Crush Training Programs, Bring Foreign, Out-of-State Workers to WI

Peter Philips Wisconsin Prevailing Wage Training chart

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The Wisconsin GOP is waiting impatiently to repeal the state’s prevailing wage law, meaning workers rights organizations and their affiliates are scrambling to convince the public just how devastating such a change would be. A new study from University of Utah professor Dr. Peter Philips could help, as it provides fresh analysis that reveals the divide between union and non-union contractors in terms of workforce training, for example.  Repealing the prevailing wage will ultimately hurt the quality of the state’s construction workforce, Philips explains, while lowering wages and inviting out-of-state contractors to underbid those who would hire locally.

Apprenticeship programs will be severely impacted by repeal according to Philips, because unions have a commanding edge in the training space.  When Kansas repealed its prevailing wage law in 1987, Philips writes, apprenticeship training fell by 38%. After Colorado repealed its prevailing wage law in 1985, apprenticeship training fell by 42%.  

Philips’ study shows that the union commitment to training young workers stands in stark contrast to the Associated Builders and Contractors’ (ABC) commitment to paying the lowest wages possible. The ABC is the chief ally of right-wing interests in the state from a construction standpoint.  From the study:

Just 5% of the annual, privately financed, training investment spent on Wisconsin’s youth entering the construction trades comes from the nonunion side of the industry. The remaining 95% comes from contributions required by collectively bargained contracts. While accounting for only 5% of the total investment in Wisconsin construction skills and human capital, the nonunion Associated Builders and Contractors (ABC) nonetheless graduates 18% of all Wisconsin apprentices reflecting the lower per-apprentice expenditures in the ABC programs. The Joint Labor-Management Programs in Wisconsin lead both in terms of the number of apprentices graduated and in the quality of their apprenticeship training.

While opponents of the prevailing wage demonize unions, it is important to note the significant amount that unions invest in training workforces, especially when compared to the amount spent by non-union contractors.  From the study:

It is not uncommon for contractors to invest as much as $10,000 per year in an apprentice’s classroom and on-the-job education. Who has the money and the courage to invest in a young person when the demand for that person’s skills may not be there four or five years down the road? The loss of skilled workers during the downturn and the demands of subsequent business upturns, along with demographic trends, can create both spot shortages and chronic shortages in safe, skilled, professional, blue-collar construction workers in almost all of the construction crafts. Yet for the most part, the nonunion side of Wisconsin construction does not invest in construction worker training. Using Form 990s that all private, nonprofit apprenticeship and construction training programs must submit, over the last three years for which their forms are available, the Wisconsin ABC spent a total of $3,972,393 on apprenticeship and other forms of training. (Figure 1) This compares to a three-year total for the set of Joint Labor-Management Programs in Wisconsin of $82,543,432.  In percentage terms, the ABC programs accounts for 5% of all apprenticeship and other forms of privately financed construction training in Wisconsin.

If the ability to train new workers disappears, there is no way around a less skilled workforce. If wages and training are cut, where will Wisconsin find the workers willing to work for peanuts without safety guarantees? The ABC has answered this question before, in Georgia, resorting to importing foreign workers through guest worker programs:

For example, in Georgia-a state that has never had a state prevailing-wage law, the ABC established the Construction Education Foundation of Georgia “years ago to address the craft training needs of Georgia’s construction industry.” The Georgia ABC states:

“The number one issue facing the construction industry today is a shortage of skilled craft workers.” It asserts that “240,000 new skilled craft workers are needed every year in the U.S. 6,000-8000 new skilled craft workers are needed every year in Georgia.” Scott Shelar, the executive director of the Construction Education Foundation of Georgia, argues that the looming skills shortage in construction requires both more training and more immigration. He argues:

“Construction executives, superintendents and HR managers realize they have a problem: Half of their workforce (according to the Bureau of Labor Statistics) are Baby Boomers-those born between 1946 and 1964. They’ve already started retiring at a rapid pace, which will continue for the next 15 years. This, combined with tighter immigration laws (especially here in Georgia) and implementation of programs like E-Verify on most large projects are making it difficult, even in this slow-recovering economy, for many construction companies to find skilled workers. So what to do? There seem [to] be two schools of thought. One says we need to address immigration laws and make it easier for people to move to the United States from other countries and work in the construction industry. The other says we need to invest in our schools and young adults here in the United States and convince them that there are good careers in construction, and specifically the skilled trades. The answer, most likely, is that we need to do both.”

Rather than addressing the issue of a skilled labor shortage in construction through industry-sponsored apprenticeship programs for local workers, the national ABC advocates a guest-worker program tied to the business cycle.

What is more confounding about the ABC’s support of prevailing wage repeal in Wisconsin is that they support prevailing wages for guest workers.  It is difficult not to process this, then, as a pure anti-union campaign. Refuse Wisconsinites the prevailing wage, and instead give that money to foreigners. From the study:

While the ABC opposes prevailing-wage regulations in Wisconsin, it promotes prevailing-wage regulations for its proposed construction foreign guest-worker program:

“A successful future guestworker program must include….A program that requires employers to treat these legal foreign workers in the same manner as U.S. workers—with all the same benefits, workforce protections and wage rates as similarly situated workers at the same location.”

Bewildered? Read Philips’ economic impact analysis in its entirety.

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