In his latest report, Sen. Ron Richard, R-Joplin, addresses prevailing wage legislation.
Missouri is a diverse state, comprising rural counties and major metropolitan areas. Because of this, median incomes and the cost of living differ greatly from one area to another.
This has caused serious problems with our current prevailing wage system. The prevailing wage is the hourly rate paid to a contractor for a public works project, similar to the minimum wage but specific to an occupation. So, if you’re a plumber in Jasper County and you’re hired to work on a government project, what you earn is based on what other plumbers in Jasper County make. However, the current system does not operate this way.
The prevailing wage is supposed to be based on data from the county where the work is to be done. But, if no data has been submitted for a county—as often happens—the system uses collective bargaining agreements from major metro areas. This can lead to prevailing wage amounts that are grossly inflated and not at all a representative of an area.
It also puts an undue burden on areas that are recovering from disasters. Public works projects are critical to recovery for communities like Joplin. Homes need to be rebuilt. Government buildings need to be repaired. These projects often have to be downgraded in quantity or quality because prevailing wage grossly inflate labor costs.
Senate Bill 439 would reform the prevailing wage system in two very important ways. First, it would suspend the prevailing wage requirement in federally declared disaster areas for projects undertaken as a result of the disaster. This would allow funds for recovery projects to go towards actual construction, not inflated and inaccurate labor costs. Second, the legislation would cut out the state’s role in determining the prevailing wage. Instead, it would be based on data from the U.S. Bureau of Labor statistics, which uses surveys to calculate the rate of pay for almost every occupation in almost every county in America. This represents a more accurate and honest way to calculate the prevailing wage.
I believe we need to fix the prevailing wage system. It is not our goal to do away with it, but to reform the system. We need to come up with a truer standard of what wages are in our communities, particularly in rural counties and areas recovering from disasters. Senate Bill 439 would go far in fixing a system that is currently putting an undue burden on the taxpayer.
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