A referendum on the November state ballot will ask voters whether the state should be allowed to pay laborers less than the going rate.

Sponsored by a group called the Fair Wage Commission, Question Two asks voters whether the 74-year-old Prevailing Wage Law should be repealed.

Passed in 1914, the measure requires the state to pay laborers on public jobs--such as construction or snow removal--the same wages as private contractors would. Passed to protect immigrant workers from exploitation, the law requires the state to pay the same rates that union workers earn. The federal government has a similar law, enacted in 1931.

Virginia Buckingham, issues director for the Fair Wage Commission, said the current law forces Massachusetts to pay construction workers up to $25 per hour while private companies have more freedom to choose pay rates. She said the state is wasting money by doing so.

A group founded by the AFL-CIO, the Committee for Quality of Life, supports the existing law and is therefore campaigning against the referendum. The committee is a coalition of 30 groups, including the National Organization of Women, said spokesman John Laughlin. He added that most of the member groups are not union organizations.

The Committee for Quality of Life has already begun airing television and radio advertisements against the referendum question, and union workers around Cambridge have plastered their cars and trucks with blue-and-white bumper stickers reading "Question 2--Bad for you."

The referendum's opponents said the law is necessary to insure that the state uses properly skilled laborers. If the law is repealed, the state would be able to pay less than union rates and would tend to hire non-union--and less expensive--labor.

If the referendum passes, the state could also employ convicts at or below the minimum wage.

The existing Prevailing Wage Law also has the support of the Massachusetts Democratic State Committee. Bob Nickerson, acting exective director, said the committee is asking constituents to "vote no on 2."

Repeal of the Prevailing Wage Law would take away the Commissioner of Labor's power to set wage rates for public work. Instead, the state would contract out its projects to the lowest--or best--bidder and therefore save money.

Carol Cardozo, spokesman for the Massachusetts Taxpayers Foundation--which supports the referendum--said a study by the Foundation for Economic Research found that in 1987, Massachusetts spent more than $212 million because of the Prevailing Wage Law.

Cardozo said the law tends to stifle competition and subsidize a certain class of workers--those who belong to unions. In addition, she said, the law makes it difficult for "entry-level workers" to get jobs.

Massachusetts' unemployment rate of 3 percent is one of the lowest in the country.