Conversation Divided on Whether Prevailing Wage Helps or Hurts Missouri Workers

Feb 19, 2018

Some county commissioners and public officials say their communities face barriers to building schools, county courthouses, police stations and fire departments because of Missouri's prevailing wage law.

Supporters of prevailing wage say that eliminating it would mean lower pay for Missouri workers and fewer highly-skilled laborers working on public works projects.

Prevailing wage is the minimum amount of money workers on public works construction projects must be paid. The Division of Labor Standards conducts surveys that track the number of hours worked across the state by each job title for their different wage rate. The rate is supposed to reflect wages in individual counties.

Some state lawmakers are questioning whether prevailing wage is an efficient use of taxpayer dollars. Some county commissioners and public officials say they’ve had projects initially estimated at a specific cost, but after prevailing wage is factored in, the ultimate price increases. This can lead to scaling back on projects to save money.

Rep. Jeffery Justus, R-Branson, Rep. Warren Love, R-Osceola and Rep. Holly Rehder, R-Sikeston are among several lawmakers proposing legislation that would repeal prevailing wage laws. Nearly 20 such bills have been introduced this year. 

"Teachers painting the classroom because they can’t afford painting contractors. Why? Because of prevailing wage," Justus said. "The city of Branson building two new fire departments, new fire houses and a police station, estimating over 20 percent cost increase because of prevailing wage."

During a recent news conference, Gov. Eric Greitens was asked about his support of making changes to prevailing wage law. He said, "I think that it’s really important in the state of Missouri that we’re not penalizing county court houses, that we’re not penalizing schools, that we’re not penalizing institutions and forcing them to pay more than market rate for work they want to do."

David Klarich, a former Missouri senator and representative for the Mechanical Contractors Association of Eastern Missouri and Kansas City, opposes repealing prevailing wage. He said part of the problem with Missouri's law is that it’s not mandatory for contractors to report the wages they pay their workers. As a result, the figures used to set prevailing wages can be skewed.

"If you don’t have to report your wages and counties, then people won’t report their wages and counties, and as a result, you don’t have a prevailing wage. You have an artificial wage," said Klarich.

The bill sponsors said that by repealing the law, the market would set the wage rate. Love said this will lead to more qualified and competitive bids for public works projects.

However, Jake Hummel, secretary-treasurer for Missouri American Federation of Labor and Congress of Industrial Organizations, said that if prevailing wage is repealed, it would lower wages across the state. With prevailing wage in place, Hummel said those workers are able to put the money they’re earning back into their communities.

Complex paperwork complicates reporting wages on public works projects, according to county commissioners and other public officials who testified at the Capitol in support of the proposed repeal. They said this oftentimes keeps contractors from taking prevailing wage jobs or, if they do take them, keeps them from reporting their wages to the government. 

Reps. Doug Beck, D-St. Louis and Mark Ellebracht, D-Liberty, countered the claims that the paperwork is arduous. Beck repeatedly said that the form to report wages is only one page. Ellebracht said his mother used to sit at their kitchen table at night to do the paperwork for their family business.

Klarich said a repeal could cause some contractors whose business model is built on doing public works projects to go out of business. He said getting rid of prevailing wage would cause businesses to not be able to pay employees adequately for their highly-skilled labor, and then they could lose those employees.

"So we’re cutting the labor market on one side. We’re cutting higher education on the other. Where do you get your trained workers?" asked Klarich.

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