Missouri Senate hearing tackles prevailing wage

A bill to suspend Missouri's prevailing wage laws in places declared natural disasters areas is viewed by some as an excuse to slash workers paychecks and boost corporate profits, but others think it's needed to save taxpayers' money.

The state's prevailing wage law establishes a minimum wage rate that must be paid to workers on public construction projects including bridges, roads and government buildings. Sponsored by Sen. Rob Mayer, R-Dexter, Senate Bill 435 would suspend the prevailing wage law for five years in areas declared by the governor to be natural disasters areas. The bill was the subject of a hearing Tuesday before the Senate's Small Business, Insurance and Industry Committee in Jefferson City.

The prevailing wage law applies to all public works projects constructed by or on behalf of state and local public bodies. The rate differs by county and includes different wage rates for different types of work. For example, in Cape Girardeau County, prevailing wage for a carpenter is $22.12 per hour plus $13.05 in benefits.

‘No regard to quality'

"If we were to eliminate prevailing wage, these jobs will go to the cheapest bidder with no regard to quality," said J.J. Lane, business representative for Plumbers and Pipefitters Local 562.

"I know that Missourians work hard for the money that goes to fund these government projects," Lane said. "I believe that they would not want their hard-earned tax dollars used to build inferior schools, hospitals, government buildings, utilities or other projects."

It's likely that out-of-state contractors, who pay unskilled workers lower wages to do inferior work will take their earnings back to their home state once a project is completed, rather than injecting those funds back into the local economy, Lane said.

The bill is also too broad and deceptive, he said.

"Think back to the many natural disasters that have been declared in the past five years here in Missouri. Most counties would have prevailing wage laws suspended right now if this bill were to take effect," Lane said. "I do not believe that this bill is intended solely to help communities who have been hit by natural disasters."

In 2011, 44 Missouri counties were declared federal disaster areas as a result of damage from spring flooding and storms. This includes all of Southeast Missouri, the Joplin area, Branson, St. Louis and six northeast Missouri counties.

‘Fairly compete'

Supporters of the bill, including the Missouri Chamber of Commerce and Industry say suspending the prevailing wage laws in disaster areas will benefit both businesses and taxpayers.

"It would allow businesses to fairly compete for construction jobs based on true costs, not arbitrary wage rates determined by outside forces," said Karen Buschmann, spokeswoman for the Missouri Chamber. "It is important for taxpayers because it allows communities, like Joplin where massive amounts of infrastructure were destroyed, to be rebuilt more cost effectively."

In some areas of the state, prevailing wage laws could nearly double the wage level on taxpayer-funded projects compared to wages for other local construction projects, Buschmann said.

Sen. Jason Crowell, R-Cape Girardeau, agreed that prevailing wage laws artificially drive up the cost of public projects in Missouri compared to the same projects in other states without these laws.

"The same highway, the same work, in Arkansas is as much as five times cheaper than in Missouri because of our prevailing wage laws and the fact that Arkansas is a right-to-work state," Crowell said. "Why is it always that the taxpayers have to pay more to have to subsidize more public policy decisions?"

Crowell said its important for the state to stretch its existing tax dollars and that Missouri can't afford its prevailing wage law.

Also on Tuesday, the senate's committee on general laws conducted hearings on three bills to make Missouri a right-to-work state: Senate Bills 438, 514 and 547.

Crowell is the sponsor of Senate Bill 514, which would prohibit union-only workplaces.

Under current Missouri law, employees at some companies have to pay union membership dues in order to work as a condition of their employer-union contracts. Crowell's bill proposes a statewide vote in August 2013 whether to eliminate that situation.

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