Midwest Economic Policy Institute

A Higher Road for a Better Tomorrow

Lowering Worker Wages is NOT the Answer

Lowering the wages of construction workers is NOT the way to prosperity.

There has been a national push to repeal or weaken state prevailing wage laws. Today, 21 states do not have prevailing wage laws and a few states are considering repealing their laws, including Missouri and Wisconsin – which recently weakened prevailing wage. Many other states have considered weakening their laws over he past few years. In addition, the national prevailing wage law, called the Davis-Bacon Act, has recently come under attack.

A prevailing wage law supports blue-collar workers employed in public construction. Prevailing wage is essentially a minimum wage for construction workers on publicly-funded projects. The law guarantees that workers employed on infrastructure projects funded by taxpayer dollars are compensated according to local market rates. By ascertaining the local market rate, a prevailing wage law prevents units of government from undercutting wage standards in a community.

Repealing of state prevailing wage laws only hurt construction workers.  Continue reading “Lowering Worker Wages is NOT the Answer”

Gas Taxes are Unsustainable for Transportation Infrastructure Needs

Transportation infrastructure is essential for economic growth.  In order to maintain quality transportation infrastructure, sustainable funding is imperative.  An Economic Commentary [PDF] by the Midwest Economic Policy Institute explores the role of the motor fuel tax both nationally and internationally.  The United States currently suffers from insufficient funding due to a broken system. Without changes, more and more roads, bridges, and public transit systems will fall into disrepair.

The primary source of transportation funding in the United States is the motor fuel tax – also known as the gas tax or fuel tax.  The federal gasoline and diesel taxes currently stand at 18.4 cents and 24.4-cents per gallon, respectively.

The revenue collected from federal fuel taxes is deposited into the Highway Trust Fund (HTF).  While fuel taxes previously served as the primary source of funding for the HTF, comprising over 80 percent of its funding between 1995 and 2007, they have proven to be an unsustainable revenue source in recent years.  Between 2008 and 2014, the HTF received $65 billion from the U.S. Treasury’s general fund to meet the fund’s obligations, since annual spending for highways and transit began to exceed the revenues generated. Continue reading “Gas Taxes are Unsustainable for Transportation Infrastructure Needs”

Prevailing Wage Repeal Would Hurt Kentucky’s Economy

Repealing Kentucky’s prevailing wage law would weaken the state’s economy, according to a new study.

Eliminating prevailing wage would cause a pay cut for middle-class workers, qualify more workers for public assistance, slash apprenticeship training, and result in more of Kentucky’s tax dollars going to out-of-state or foreign contractors. Veterans, who populate construction trades at a higher rate than non-veterans, would be particularly impacted if Kentucky were to repeal its prevailing wage standards.

Continue reading “Prevailing Wage Repeal Would Hurt Kentucky’s Economy”

Minneapolis: An Upward Mobility City

“The fading of the American Dream is not immutable. There are cities throughout America — such as Salt Lake City and Minneapolis — where children’s chances of moving up out of poverty remain high. Cities with high levels of upward mobility tend to have five characteristics: lower levels of residential segregation, a larger middle class, stronger families, greater social capital, and higher quality public schools.” – The Equality of Opportunity Project

How Should Wisconsin Improve Its Road and Bridge Quality?

A new Midwest Economic Policy Institute (MEPI) Economic Commentary [PDF] compares the quality of roads and bridges in three Midwest states: Wisconsin, Illinois, and Iowa.

The data show that Illinois has the best overall road and bridge quality of the three states. Wisconsin comes in second, while Iowa has the worst road and bridge quality.

Wisconsin’s roads are in need of improvement, and the state must decide which neighbor it wants to be resemble more. Currently, about 21 percent of public, major roads throughout Wisconsin are in poor condition and 14 percent of bridges are in need of repair. Furthermore, a Wisconsin driver in the Madison area loses 36 hours a year in congestion and Wisconsin motorists spend a total of $6 billion in vehicle costs every year due to congestion and traffic crashes. Traffic fatalities increased also by 13 percent from 2014 to 2015. Continue reading “How Should Wisconsin Improve Its Road and Bridge Quality?”

Waukesha County Expected to Lose 600 Jobs Due to Prevailing Wage Changes

A new Economic Commentary by the Midwest Economic Policy Institute details how the repeal of prevailing wage in Wisconsin will negatively affect Waukesha County.

Report [PDF]Weakening Waukesha County: Prevailing Wage Changes Will Hurt the County

In July 2015, Governor Walker signed the 2015-17 State Budget into law, making significant changes to the state’s prevailing wage laws. Prevailing wage is the minimum hourly wage employers must pay construction workers on projects funded by state dollars. Act 55 of the bill repeals the state prevailing wage law for local governmental units and municipalities. Local municipalities – such as villages, towns, cities, school districts, and sewerage districts – are not obligated to pay a minimum hourly wage to construction workers. These changes will take effect on January 1, 2017.  After the change, state agency and state highway public work projects are the only projects in Wisconsin where prevailing wage rates will apply.

This change will have significant impacts on Wisconsin and Waukesha County’s workforce and economy. Analysis from the report finds: Continue reading “Waukesha County Expected to Lose 600 Jobs Due to Prevailing Wage Changes”

Apprenticeships are Beneficial to the Economy

The following is an excerpt from the guest commentary originally published in The News-GazetteFor the full op-ed and guest appearance, please visit this link.

“Ultimately, the facts make it clear that not everyone is going to go to college. And for those who don’t, our research shows that apprenticeship programs can make a huge difference in their lifetime earnings potential, and the pool of skilled talent that is needed to make our businesses competitive. But it takes a village to prepare the next generation for the jobs of tomorrow.

We need more outreach to encourage businesses to invest in these programs, or offer tax credits to those who do. This is something that South Carolina recently tried, boosting apprenticeships by 570 percent.

We need to address the crisis of child care that is a barrier for many mothers who might otherwise be able to participate in these programs.

We can invest in pre-apprenticeship programs in high schools — particularly disadvantaged schools — to provide more skill-training opportunities for our young people. Dunbar Vocational High School in Chicago is already piloting one such program.

And finally, we need to reject counterproductive policy initiatives — such as efforts to repeal prevailing wage laws — which have proven to decimate these vital workforce training programs across the country.

Ultimately, education lies at the heart of so many of the challenges we face as a state and a country. We need to invest in providing more options that work. And it’s clear that apprenticeships more than meet that standard.”

– Frank Manzo IV, Policy Director of the Illinois Economic Policy Institute

Some Opponents of Prevailing Wage Are Really Bad at Math

A new report by the Midwest Economic Policy Institute finds that prevailing wage repeal cannot result in “44 percent savings” in Wisconsin.

Full Report PDF: Prevailing Wage Repeal Cannot Result in “44 Percent Savings:” Evidence from Southwestern Wisconsin

Prevailing wage supports blue-collar workers employed on public construction projects. By preventing government from using its massive purchasing power to undercut local standards, prevailing wage laws ensure that workers are paid a competitive, up-to-date wage and benefits package determined by private actors. Continue reading “Some Opponents of Prevailing Wage Are Really Bad at Math”

Prevailing Wage and Military Veterans in Minnesota

REPORT: Prevailing Wage and Military Veterans in Minnesota: Applied Policy Brief

A new study released today finds that prevailing wage greatly improves economic outcomes for veterans. As many as 2,300 blue-collar veterans in Minnesota would be expected to separate from their construction jobs if Minnesota were to weaken or repeal its prevailing wage law.

Veterans are more likely to work in construction than non-veterans. Nationally, veterans account for 5.8% of the overall workforce but comprise 6.9% of all blue-collar construction workers. In Minnesota, veterans make up an even larger share of the construction workforce. Approximately 9.6% of all blue-collar construction workers in Minnesota are military veterans, above neighboring states and well above the 6.9% U.S. average. Continue reading “Prevailing Wage and Military Veterans in Minnesota”

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