WCC Responds to Misleading AFP Study
Jul 01, 2016
April 30, 2015
TO: Members of the Wisconsin State Legislature
FR: Steve Lyons, Wisconsin Contractor Coalition
RE: AFP Prevailing Wage "Case Study"
Yesterday, Americans for Prosperity (AFP) released a "case study" in which it claimed that the cost to property taxpayers of school construction projects approved by local voters in the spring 2015 elections would go down if the state's prevailing wage laws were repealed. After reviewing their report, we are reminded of the following quote from Ben Franklin: "half a truth is often a great lie."
The AFP case study is based on analysis conducted by the Wisconsin Taxpayers Alliance (WisTax) and paid for by the Associated Builders and Contractors of Wisconsin, Inc. (ABC). According to a nationally-respected economist, Dr. Peter Philips, the ABC report is deeply flawed and the conclusions drawn from it are erroneous.
Furthermore, the critics of the state's prevailing wage laws continue to rely on two extraordinarily flawed assumptions:
- 1.Reducing wages will not affect productivity. This assumption contradicts objective academic research and defies common sense. On public works projects, paying workers less means more time spent on the project. Any savings on hourly wages is offset by more hours spent completing the project.
- 2.Labor Costs are rising. Again, the facts say otherwise. From 1977 to 2007, blue-collar wages and benefits have fallen from 33% of the total costs contractors charge owners to 26%.
These points explain why the non-partisan Legislative Fiscal Bureau has concluded that the impact of repeal the state's prevailing wage laws would "generally range from relatively small effects to no statistically significant effects."
Property tax relief is an elusive goal.
We strongly advise lawmakers to be skeptical of any claim that repealing the state's prevailing wage will reduce the local property tax burden. A half a truth does not add up to more property tax relief.