Kinder: Wages could limit Joplin rebuilding effort
Monday, November 14, 2011
By DAVID A. LIEB
JEFFERSON CITY, Mo. (AP) — Missouri’s housing agency should roll back its wage requirements for construction workers in the Joplin area in order to finance more of the new houses and apartments needed after last spring’s deadly tornado, Lt. Gov. Peter Kinder said Monday.
The Missouri Housing Development Commission has committed about $100 million in tax credits and loans over the coming decade to spark the construction of low-to-moderate income rental units and single-family, owner-occupied homes in the Joplin area. The agency’s plan requires workers on state-subsidized projects to be paid the federal prevailing wage, a rate typically used for federally funded public works projects.
But a Sept. 30 revision of the federal wage rules significantly increased those amounts. For example, the federal prevailing wage for a carpenter in the Joplin area rose from $7.98 an hour to $21.47 an hour plus $12.65 in benefits. The federal prevailing wage for a roofer in the Joplin area rose from $7.25 an hour — which matches the general federal minimum wage — to $21.30 an hour plus $8.08 in benefits.
Kinder, who is a member of the state housing commission, said the increase in the federal prevailing wage standards could reduce the number of homes the state can help finance. Kinder said he will make a motion at the commission’s Dec. 16 meeting to stop following the federal wage standards for the tornado recovery projects.
“Natural disasters are extreme circumstances that sometimes require extraordinary remedies,” said Kinder, a Republican. “We can pay workers a fair, living wage and build more homes with the same amount of money.”
But representatives of building trade unions said Kinder’s proposal to disregard the federal prevailing wage ultimately could backfire.
“The higher wage rates attracts a more qualified candidate, and those people can produce more per man-hour than what the workers in non-prevailing wage states can produce,” said Dave Wilson, a spokesman for Carpenters District Council of Greater St. Louis and Vicinity, which covers Missouri, Kansas and southern Illinois.
The May 22 tornado that struck Joplin killed 161 people and destroyed more than 7,000 residences. Of those, more than 4,600 were rental units, including more than 3,600 that were occupied by lower-income tenants, according to figures from the state housing development commission. About 550 were operating under formal government programs for low-income housing.
The housing commission decided in August to allocate to Joplin $90 million of the $250 million in state and federal tax credits expected to be awarded under its primary incentive program in 2012. Although the actual tax credits are spread out over a 10-year period, developers typically generate cash upfront by selling their tax-credit vouchers on a discounted basis.
The commission also set aside $10 million for loans to developers of single-family homes that can be sold to families with incomes of up to about $84,000 annually.
The agency’s wage rules apply to buildings involved in both of those programs, though no money has been awarded yet.
Paying the federal prevailing wage on agency financed houses to be sold to families could drive up their cost compared to similar homes built by private-sector developers who are not subject to the wage requirements, said Tina Beer, the operations director for Missouri’s housing agency.
But abandoning the federal prevailing wage on state-financed projects could harm the recovery for many families who lost jobs and homes because of the tornado, said Tim Green, president of the Missouri State Building and Construction Trades Council. Green also is a Democratic state senator from St. Louis.
“Is that really what we want to do to a devastated area is lower the wage rate for a local workforce?” Green asked rhetorically. He added: “The cheapest dollar doesn’t always get you the best product.”
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