GREAT LAKES REGION — As the cost of living rises, what are we doing to make sure working people have reliable paychecks that can keep up?
An answer is hiding in plain sight: prevailing wage.
Prevailing wage laws are not new. They are not radical. And they are not simply a benefit for organized labor. For roughly 90 years, prevailing-wage policies have had bipartisan support at various levels of government because the basic idea is straightforward: when taxpayers are paying for public construction, workers should be paid wages and benefits that reflect the going rate for their trade and community.
The policy also does something else that is increasingly important in the Midwest: it creates an incentive to train workers, rewards legitimate employers, promotes safer jobsites and makes it harder for contractors to compete by simply cutting workers’ pay.
What is Prevailing Wage?
In simple terms, prevailing wage establishes a wage and benefit standard for workers on covered public construction projects. The exact rate depends on the trade, location and type of construction. It can include both wages and fringe benefits.
The principle is that taxpayers shouldn’t finance a race to the bottom. If a community is spending millions of dollars to build a school, bridge, water system or public building, the goal shouldn’t be to find the contractor who can pay the workers the least.
The goal should be to find qualified contractors who can complete the project safely, efficiently and at a fair price, while allowing the people doing the work to earn a living wage.
Apprenticeships are part of the equation
One of the less-discussed benefits of prevailing wage is its connection to apprenticeship programs. A strong construction industry needs a pipeline of skilled workers. Electricians, plumbers, carpenters, ironworkers, operating engineers and other skilled trades cannot simply be produced overnight.
Prevailing-wage projects can help support an industry in which employers have an incentive to invest in training rather than simply looking for the cheapest possible labor. For a young person who doesn’t want to take on four years of college debt, that can mean a very different path into the middle class: earn while you learn, develop a skilled trade and eventually earn a family-supporting wage.
It is also about safety and stopping fraud
There is another argument that deserves more attention: jobsite safety.
Construction is dangerous work and when contractors compete primarily by cutting labor costs, there can be pressure to squeeze training, staffing and other investments that make jobsites safer. A system that rewards skilled, trained workers and responsible contractors can help establish a different standard.
Prevailing wage also creates clearer wage and benefit standards for public projects. That matters because construction has long struggled with misclassification and payroll abuses.
When workers are improperly classified as independent contractors, paid off the books or otherwise denied the wages and benefits they are legally entitled to, legitimate contractors can be placed at a competitive disadvantage and workers are put at risk or forced to rely on public programs just to get by.
A contractor that follows the rules shouldn’t have to compete against one that wins bids by cheating its workers.
State By State Deep Dives
Michigan: Prevailing Wage Restored
Michigan provides one of the clearest examples of the political fight over prevailing wage. After Michigan’s prevailing-wage law was repealed by the Republican legislature, Gov. Gretchen Whitmer signed legislation restoring it in 2023. The Democratic-controlled Legislature subsequently expanded prevailing-wage requirements to additional public projects.
It is likely to become a major issue in Michigan’s next political battles because Republicans have continued to push policies aimed at weakening organized labor and workplace protections.
Former Congressman John James is running for governor and has made restoring Michigan’s right-to-work law part of his political agenda. That means Michigan voters are going to have to decide what kind of construction industry they want.
Do they want public construction to create a race to the bottom? Or do they want projects to create opportunities for Michigan workers to earn middle-class incomes?
Minnesota: Don’t give up ground
In Minnesota, prevailing wage has been expanded. In 2024, Minnesota became the first state in the nation to require prevailing wages on affordable-housing projects financed through Low-Income Housing Tax Credits. That is significant because it connects two issues that are too often treated separately: affordable housing and good jobs.
Minnesota’s approach essentially says that building affordable housing shouldn’t require creating unaffordable jobs. If public policy is going to subsidize housing construction, the people constructing that housing should be able to afford to live in the communities they are helping build. That is a powerful idea in a region where housing costs are rising and skilled construction workers are desperately needed.
The challenge for prevailing wage supporters now is protecting those gains.
Wisconsin: A Warning for Workers
Wisconsin provides stark examples of what happens when prevailing wage disappears. The state repealed its prevailing-wage requirements for state and local public works projects in 2017.
So, what happened to the workers?
According to research cited by the Wisconsin Examiner in 2023, construction wages fell at an attention-grabbing 6 percent after repeal while executive compensation increased.
If the argument for repeal was that lower labor costs would make the construction industry more efficient and prosperous, workers should have been among the beneficiaries. Instead, the available evidence points toward workers receiving a smaller share of the economic gains.
Another warning sign comes from research by the Midwest Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois has found that apprenticeship growth in Wisconsin lagged following the repeal.
That matters because the construction workforce isn’t getting younger. The Midwest cannot build its next generation of factories, housing, roads, bridges and energy infrastructure without training the workers who will actually do the work.
Wisconsin’s prevailing-wage debate is also a reminder that these policies aren’t just abstract economic questions.
Tom Tiffany, the Republican candidate for governor, was a major advocate for repealing prevailing wage during his time in the state Senate. That record matters because the fight over prevailing wage is part of a larger question about the future of organized labor and the middle class in Wisconsin.
In contrast, Wisconsin Democrats have introduced legislation aimed at restoring prevailing wage and repealing right-to-work.
The political choice could not be clearer. One side is arguing that Wisconsin should continue down the road it started in 2017 that hurt construction workers. The other is arguing that the state should restore the wage standards that once helped make construction a path into the middle class.
A Midwest standard worth fighting for
Michigan has restored prevailing wage.
Minnesota has expanded it.
Wisconsin repealed it and is now confronting the consequences.
Those three states offer three different visions for the future of Midwest construction.
