Contractors Make Case Against Prevailing Wage Repeal

JEFFERSON CITY, Mo. -- Union and non-union contractors are voicing their opposition to a Missouri House proposal to eliminate a minimum wage requirement for public works projects.

The Coalition of Construction Contractor Associations, representing around 100,000 Missouri workers, told reporters in Jefferson City Wednesday what a proposed repeal of the prevailing wage could mean for workers.

Currently, local government organizations must pay workers more than the state's $7.70-an-hour minimum wage for construction projects. Prevailing wage is determined by the Department of Labor and is based on the number of hours worked and the wages paid to contractors.

Wages are unique for each county. A general road construction laborer would be paid $31 an hour in St. Louis, but $25 in the northwestern corner of the state.

The main concern construction contractors have is that repealing prevailing wage will encourage companies to hire cheap, out-of-state labor, taking away jobs that would normally go to local contractors.

Government construction contracts are awarded to the lowest bidder, and without a prevailing wage requirement, out-of-state contractors could potentially bid much lower than those in Missouri.

St. Louis Electrical Contractors Association President Emily Martin says opening the state up to more outside competition could encourage further cost cutting and shoddy workmanship.

"I might bring in a whole bunch of people who might have been doing some unskilled labor previously, perhaps in this country, and perhaps not, to wire a school in Springfield," she said, Martin later pointed to different safety standards in different states. "We'll see contractors coming from Texas, from Arkansas, from other places that probably don't have the same standards and qualifications."

Martin said it isn't just a matter of safety, but a matter of money leaving the state, potentially sapping tax revenues. Head of Jefferson City-based Meyer Electric, Leon Keller, said he has seen that happen first hand. "I have watched projects where they bring in migrant workers," he said. "If you follow those people to where they cash their checks, they're going places where they could buy money orders to send them back to wherever they're living."

Keller said his stance against a repeal of prevailing wage is based on his 50 years of experience in the construction industry more so than data or examples of issues in other states.

Missouri Associated General Contractors President Leonard Toenjes says the 2015 repeal of a prevailing wage law in Wisconsin has already been hurting local contractors. "They are seeing significant erosion in their local contractor base," he said. "They've basically quit bidding on certain types of projects because folks are coming in."

So far, evidence for and against repealing prevailing wage has been largely anecdotal.

Proponents say removing prevailing wage provisions on public works projects will help reduce costs for the state, though it is unclear by how much. The Department of Transportation and the Department of Conservation assume repeal of prevailing wage may cut expenses of construction projects, but have not provided exact figures.

The bill's sponsors and supporters also say that it would reduce the number of construction projects cancelled due to expenses and reduce project cost burden on small municipalities that have limited tax funds available.

After passing in the House last week, a proposed repeal of repeal of the policy is now starting it's move through the Senate, where Republican leadership has expressed support.

At a Senate General Laws Committee hearing for the bill Wednesday, Chair Bob Onder (R-Lake St. Louis) said he was behind the move. Republican Gov. Eric Greitens would likely sign legislation repealing prevailing wage.

(Alex Derosier for Missourinet)

 


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