Prevailing wage challenged
Monday, April 22, 2013
Both the federal and state governments require contractors to pay the “prevailing wage” on public construction projects, such as schools, municipal buildings and sewer systems.
But some in the Legislature want to change that — to cancel the state law, which has been on the books since 1957.
“The reason for doing this is, the workplace in these small communities would be able to, probably, initiate work quicker,” state Rep. Warren Love, R-Osceola, told the Senate’s Small Business, Insurance and Industry Committee last week, as the committee heard testimony on Love’s bill that passed the House last month with a 90-62.
“The current rates would allow local contractors and local tradesmen to do the work,” Love added, “and we would be excited about this because it would put a lot of our local people back to work.”
Under state law, the “prevailing wage” is the minimum a contractor can pay employees for their work, and it differs for each profession or job title.
The wage rate is to be determined on a county-by-county basis — based on wages paid in that county or region.
Jefferson City contractor Larry Berry, of L.G. Berry Construction, told the senators last week: “I called the Labor Board in the beginning to find out how they established the rates.
“I was told they contacted all the contractors, union and non-union, and it was a split between them — I was never contacted.”
For a number of years, outstate Missouri contractors have complained the prevailing wage rates have been controlled by the wages set in the St. Louis and Kansas City areas — not by local contracts.
“Right now, prevailing wage is higher than union scale — that doesn’t sound like a very good average between union and non-union wages,” Berry told the committee. “Right now my carpenters are on prevailing wage today, at $35 something per hour.
“For my carpenters, it’s about $21-an-hour difference between our normal wage and the prevailing wage.”
Brendan Cosette, a lobbyist for the Missouri Chamber of Commerce and Industry, told the panel changing the prevailing wage laws is a good idea “simply because it allows for counties and municipalities and schools to get more bang for the buck in construction projects, and is a good way, again, to get more bang for the buck in their tax dollars.”
And Peggy Berry, who serves “on committees here in Jeff City and in Benton County,” told the senators that prevailing wage laws was a reason school district voters recently rejected a proposed bond issue.
“If we did not pay prevailing wages, we could save 30 percent on building a new high school,” she said.
“In these days and times, we need to save money, not spend money.
“We’ve got contractors and subcontractors who are wanting to work, without spending an arm and a leg.”
Former state Sen. Tim Green, speaking for the Missouri State Building Trades, said a University of Missouri-Kansas City study showed that “of the overall project, labor is about 30 percent of the cost — the rest is material and equipment. So, if you use the 30 percent argument, you wouldn’t have any labor cost.”
He also questioned Ms. Berry’s comment about the failed Jefferson City School District vote this month.
“I do not believe voters the voters of Jefferson City voted against a capital improvement bond issue because of prevailing wage,” Green said. “There were several other issues in that — two new high schools and other things.”
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