Sources & Citations
This page provides the sources and citations for statistics and factual claims made on the Wisconsin Responsible Contracting Coalition website. We are committed to accuracy and transparency in all of our content.
Problem Statement Section
"Right here in Wisconsin, approximately 15,000 construction workers — one in every ten — face systematic exploitation through misclassification, wage theft, and unsafe conditions."
Source:
Midwest Economic Policy Institute & Illinois Economic Policy Institute, "The Costs of Wage Theft and Payroll Fraud in the Construction Industries of Wisconsin, Minnesota, and Illinois," January 2021
The report found that approximately 10% of Wisconsin's construction workforce (about 14,500-15,000 workers) were either misclassified as independent contractors or paid off the books.
"This hidden crisis costs exploited workers between $10,000-$17,000 annually in lost wages and benefits"
Source:
Economic Policy Institute, "The economic costs of worker misclassification," January 25, 2023
"According to our calculations, illegal misclassification costs the typical construction worker between $10,177 and $16,729 per year."
"while draining over $200 million yearly from Wisconsin taxpayers through lost tax revenue and increased public assistance costs."
Source:
Wisconsin Building Trades Council
This figure is consistently cited by industry organizations with a breakdown of: $91.2 million in unpaid personal income tax, $50.7 million in unpaid business tax, $56 million of unpaid unemployment insurance tax, and $2.6 million for injured employees working for illegally uninsured employers.
"Meanwhile, contractors using these practices gain an unfair 30% advantage over honest businesses playing by the rules."
Source:
Office of the Attorney General for the District of Columbia, "Illegal Worker Misclassification: Payroll Fraud in the District's Construction Industry," September 2019
The report found that misclassification alone creates a 16.7% cost advantage, which rises to 27% when combined with modest wage theft, and up to 48.1% when benefits are not passed through.
Statistics Section
"$200+ Million Annual cost to Wisconsin taxpayers from misclassification and payroll fraud"
Source:
Wisconsin Building Trades Council
See previous citation for breakdown of this figure.
"$16,729 Average annual wage theft per misclassified construction worker"
Source:
Economic Policy Institute, "The economic costs of worker misclassification," January 25, 2023
The website uses the upper bound of the $10,177 to $16,729 range cited in the report.
"30% Unfair competitive advantage gained by contractors using labor brokers"
Source:
Office of the Attorney General for the District of Columbia, "Illegal Worker Misclassification: Payroll Fraud in the District's Construction Industry," September 2019
See previous citation for details.
"15,000 Wisconsin construction workers facing misclassification and exploitation"
Source:
Midwest Economic Policy Institute & Illinois Economic Policy Institute, "The Costs of Wage Theft and Payroll Fraud in the Construction Industries of Wisconsin, Minnesota, and Illinois," January 2021
See previous citation for details.
"39% Construction workers' families enrolled in at least one safety net program"
Source:
UC Berkeley Labor Center, "The Public Cost of Low-Wage Jobs in the US Construction Industry," January 2022
The research examined construction workers' families' utilization of five major safety net programs (Medicaid, CHIP, TANF, EITC, and SNAP) and found that 39% of families of construction workers nationally were enrolled in at least one safety net program.
Labor Broker Model Section
"Labor brokers function as intermediaries between contractors and workers, creating deliberately complex employment arrangements that obscure employer responsibilities and legal obligations."
Source:
WRCC Research Document, "How Labor Brokers Operate" section
This description synthesizes information from multiple sources including Department of Labor guidance and industry research.
Five-step explanation of the labor broker model (Recruitment, Misclassification, Documentation Avoidance, Safety Shortcuts, Responsibility Diffusion)
Source:
WRCC Research Document, structured presentation of information from the "How Labor Brokers Operate" section
Worker Stories Section
"My boss gave me a check and told me to cash it at a local bakery. Then I had to use that cash to pay myself and three other workers. No taxes, no records."
Source:
Documented case mentioned in the WRCC research document
This testimonial is based on a documented case: "A construction worker in the Madison metro area reported being given a check by his boss and instructed to cash it at a local bakery, then use that cash to pay himself and co-workers." The case was documented by Worker Justice Wisconsin and reported in Wisconsin Examiner's coverage of wage theft cases.
"I was promised $22/hour to work on a large construction site in Madison. After three weeks of 10-hour days, my labor broker paid me only $1,800 in cash..."
Source:
Worker Justice Wisconsin
This testimonial represents a composite of typical wage theft cases documented by Worker Justice Wisconsin, as referenced in the WRCC research document.
"I've been in construction for 22 years and run a legitimate painting business. I'm losing bids to companies that come in 30% lower because they use labor brokers and misclassify workers."
Source:
Office of the Attorney General for DC, "Illegal Worker Misclassification: Payroll Fraud in the District's Construction Industry"
This testimonial is a representation of the competitive disadvantage experienced by legitimate contractors, based on the research finding that misclassifying employers gain up to a 30% competitive advantage.