By Josh Wallis, Springfield
Despite all the election year rhetoric about lifting wages and taking care of veterans, Missouri legislators are considering doing just the opposite by repealing our prevailing wage law.
A repeal of prevailing wage will hurt Missouri veterans, our economy and the construction industry. It won’t save money, either.
This is not hyperbole. It is literally what the research tells us.
Prevailing wage is a minimum wage for publicly funded skilled construction work. In fact, it is the local market rate, based on surveys that reflect what workers in different skilled trades actually earn in the community. Prevailing wage laws were enacted by Republicans more than 80 years ago to promote local hiring and quality workmanship. When it comes to tax dollars and our critical infrastructure, both of these virtues are important.
Construction skills are also vital to the work our military does in places like Iraq and Afghanistan. Our service men and women are trained for project leadership, maximizing productivity, and as members of teams that depend on efficiency. In addition to fighting, we also help rebuild schools, roads and bridges.
In fact, the military provides more than one in five registered apprenticeships in the U.S. today. So, not surprisingly, veterans are far more likely to pursue careers in the skilled construction trades than non-veterans. Prevailing wage standards actually increase these trends by making these occupations more than jobs — but genuine middle-class career pathways.
Degrading minimum wage and benefit standards for skilled construction workers has the opposite effect.
Research shows that repeal of prevailing wage laws would reduce veterans’ income by billions of dollars and cost tens of thousands of veterans their jobs or health insurance. Worse, it would begin a race to the bottom that outsources what were once local middle-class jobs to lower-skilled workers from outside the state or even outside the country. Many American manufacturing jobs have already gone to Mexico and China for the same reason.
Studies are equally unambiguous about the importance of prevailing wage to the overall economy. By spending fewer tax dollars locally and cutting wages, states that repeal prevailing wage laws pull hundreds of millions of dollars out of the economy that would otherwise be creating jobs across all sectors, while boosting poverty among construction workers by as much as 30 percent.
It’s important to remember that labor (wages and benefits) represents only about 20 percent of the total cost of the average construction project impacted by Missouri’s prevailing wage law.
If Missouri’s law is repealed, the only way for taxpayers to realize significant savings without undermining quality would be if skilled local craftsmen decided to work for free. That’s not going to happen, but here’s what will.
First, states without prevailing wage standards have more safety problems on their work sites and are at higher risk for delays and cost overruns. No one wants their kids’ school, or the bridge they rely on to get to work safely each day, to face these kinds of issues. Second, the lower-skilled work sites of non-prevailing wage states are significantly less productive and less efficient. And finally, by reducing incomes and exporting more tax dollars to out-of-state contractors, states that repeal their prevailing wage laws lose millions in sales and income tax revenues while spending millions more on food stamps and other social assistance programs for workers who can no longer afford to meet their family’s basic needs. This invites either deep cuts to vital services or tax increases.
For these reasons and more, most economists and industry experts have long since concluded that repeal of prevailing wage doesn’t save money.
Last November, Missouri elected a new governor who promised to create jobs and lift wages. In fact, Governor Greitens mentioned these goals 11 times in his recent State of the State address.
But the reality is that a repeal of prevailing wage undermines both goals spectacularly and, worse, would leave too many of the skilled veterans who are working to rebuild our communities behind. We deserve better.
Wallis is a Marine Corps veteran from Springfield.
This article was published by the Springfield News-Leader here.