As a long-time construction trade association executive, I’m accustomed to getting members’ strong reactions to legislation at every level of government. The reaction to the Milwaukee paid sick leave referendum mandate, however, has been different, both in terms of intensity and the response that it has provoked.
Most of our general contractor members are union employers whose employees hold some of the best paying jobs in Wisconsin – just ask anyone you know who works in construction. Wages and benefits are the product of a negotiating process, where contractor representatives sit down with building trade representatives every few years to arrive at a compensation package. (In that process, a benefit such as paid sick leave may be negotiated for another benefit, or for an hourly wage increase.) It’s called collective bargaining, and it has served our industry and many others very well.
As happened earlier this year in Milwaukee, along comes a group with a petition, and no respect for the collective bargaining process or any other understanding between employers and employees. The group’s stated intent is to mandate that "employers within the geographic boundaries of the City" provide up to nine days of paid sick leave per employee per year (five days where there are fewer than 10 employees).
What’s different here is that this group proceeded to legislate this new benefit via the seldom-used "direct legislation" statute. Take the requisite number of valid signatures to the city clerk, and the Common Council’s only option is to either pass the proposal intact or place it on the next ballot as a binding referendum.
In either case, the result is the same: employers and other interested parties have no rights or say in what’s happening and are expected only to pick up the tab (so much for the democratic process). The referendum was passed so it’s a "done deal," right?
Well, not so fast. It turns out there are legal grounds to challenge the ordinance. Thanks to the Milwaukee Metropolitan Association of Commerce (MMAC), employers who had no say in the legislative process will get their day in court.
When the referendum question was proposed, the city attorney was not even allowed under the law to address the threshold legal question of whether the sick leave mandate is the proper subject of a municipal ordinance. That legal authority will be looked at, as well as what appear to be other potential defects in the ordinance. (Contrary to its stated intent, the ordinance may also apply to employers outside of the City of Milwaukee who have employees working within the city. We don’t know; it’s ambiguous at best!)
Regardless of how the litigation plays out, what’s more important to Milwaukee residents and the future viability of their city, is the perception that has been created here. Mayor Tom Barrett and others warned that this community struggling to retain and attract jobs would be put at a competitive disadvantage by the paid sick leave mandate.
That is already happening: according to MMAC several firms looking at Milwaukee as a home for their businesses have taken the city out of consideration due to the sick leave mandate. Other employers in the city have announced they will relocate as soon as possible.
My own experience bears that out: a member whose business has been located in Milwaukee for many years just told me that he will be moving to Waukesha County and taking his 180 employees with him as soon as his current lease expires. I asked whether he would reconsider if the ordinance is overturned in court and his answer was: "No, enough is enough. If it wasn’t this mandate, it would be another”.
It’s becoming clear that the organizers of the referendum effort have done a real disservice to the people of Milwaukee by targeting this City, especially in these challenging times for not only construction but for most businesses. Minimum wage laws and the like are most fairly legislated at the federal or state level where there is a level playing field.
The moral of this story is that selective social engineering can have real-world economic consequences, as Milwaukee is sadly learning!
Mike Fabishak is the chief executive officer of the Association of General Contractors of Greater Milwaukee.
