The Senate Interim Committee on Labor Reform met last week for the first time. There are eight members of the committee, including myself. The committee was established to gather information and make a recommendation regarding if and how the General Assembly should change Missouri’s Prevailing Wage Law, which establishes a minimum wage that must be paid on public works projects in the state.
For over two hours the committee listened to testimony from various labor groups, local government officials, and employees themselves. A recurrent theme from city and county officials, especially those from rural parts of our state, was that Missouri’s Prevailing Wage unnecessarily raised the cost of public construction at the expense of taxpayers. In many cases, projects were not done at all because of the prohibitive cost.
Prevailing wage laws in practice tend to fix public construction wages to the union wage for various job classifications, regardless of where in the state the project is being done. Prevailing wage requirements also include extensive paperwork and reporting requirements with which smaller contractors often find it difficult to comply. It is estimated that taxpayers would save at least 10 percent on the cost of projects if the state adopted a prevailing wage system based on a different pay formula for projects worth over $500,000.
The committee’s chair, Sen. Dave Schatz, R-Sullivan, discussed data from a report his office compiled. The Prevailing Wage Data Report states, among other things, that about 85 percent of public works projects on the local level are under $500,000, and most of the projects are for local governments and colleges. States like Wisconsin, Arkansas, Maryland, Nevada, and New Mexico have similar laws. Some states, such as Kentucky and Arkansas have recently repealed their prevailing wage laws. According to the report, even though there are significantly more projects under that threshold, they account for less than 10 percent of the total cost of public works projects.
The committee plans on meeting again before the fall but has yet to set a date.
Very Sincerely,
Robert F. (Bob) Onder