Bill would protect disaster rebuilding efforts from prevailing wage

The catastrophic tornado that struck Joplin in May of 2011 destroyed thousands of homes, including much of the city’s low income housing.

As city leaders began plans to rebuild, many developers were interested in helping Joplin restore its low income housing with help from grants through the Missouri Housing Development Commission.

However, a major hurdle emerged when developers learned the housing commission had recently changed its regulations and now required all workers on these projects be paid a prevailing wage.

When developers learned of this regulation, the plans for rebuilding homes in Joplin were drastically altered. Because of the higher cost of labor, developers scaled back plans. They offered fewer homes, more apartments and fewer features for energy efficiency.

“We lost quality and quantity because of this requirement,” said Rep. Bill White, R-Joplin.

This legislative session, Rep. White is working to change the law, prohibiting the Missouri Housing Development Commission from requiring prevailing wages on building projects in disaster areas.

The legislation, House Bill 1144, was heard in the House Committee on Workforce Development and Workplace Safety.

The bill has the support from Lt. Gov. Peter Kinder, who serves as a commissioner on the Missouri Housing Development Commission. During testimony on the bill, he said prevailing wage has hampered Joplin’s ability to rebuild its low income housing.

“I would say that Joplin got a second hit after the tornado from the Missouri Housing Development Commission that artificially raised the price of these projects,” he said.

The Missouri Chamber of Commerce and Industry supports this proposal. Rather than have wages set by artificial standards, the Missouri Chamber supports efforts that empower the free market.

The Missouri Chamber has also testified in support of House Bill 1306, sponsored by Rep. Warren Love, R-Osceola, which would reform prevailing wage laws. Rep. Love’s bill was endorsed by a House committee earlier this month and it awaits debate by the entire House of Representatives.

For more information about prevailing wage, contact Jay Atkins, Missouri Chamber General Counsel, at 573-634-3511 or by email at jatkins@mochamber.com.

House committee hears legislation that would change prevailing wage laws

The Missouri House Workforce Development and Workplace Safety Committee took on legislation this week that would reform prevailing wage laws in Missouri.

House Bill 1306, sponsored by Rep. Warren Love, R- Osceola, would change the laws regarding the prevailing hourly rate of wages, and would revise the definition of construction as it relates to prevailing wages on public works projects by removing improvements, alterations, or major repairs and specifies that it does not include maintenance work. Currently the law includes construction, reconstruction, improvement, enlargement, alteration, painting and decorating or major repair.

The Missouri Chamber has a long-standing position against prevailing wage mandates.

“Prevailing wage is a product of a bygone era.  The policy mandates an arbitrary level of wage-setting on public projects,” Jay Atkins, general counsel for the Missouri Chamber, said.  “That mandate is costing taxpayers far greater costs for public projects. In some areas of the state, it could nearly double the wage level on taxpayer-funded projects compared to wages for other local construction projects.”

For more information about prevailing wage issues, please contact Jay Atkins, general counsel and director of governmental affairs for the Missouri Chamber, at jatkins@mochamber.com or by phone at 573-634-3511.