Prevailing wage requirement hinders Joplin's recovery efforts
Commentary by Sen. Ron Richard (R-32)
The tornado that tore through Joplin last year destroyed countless homes, leveling entire neighborhoods and devastating our community. Weve worked hard to recover, and rebuilding efforts have been underway for some time. These include more than 300 state residential projects that will provide houses, duplexes and apartments for numerous people still without permanent housing. Now, with a new prevailing wage regulation by the Missouri Housing and Development Commission, the number or quality of these projects is in danger of being drastically reduced.
Prevailing wage is the hourly rate paid to a particular occupation, and is determined by wage surveys. The Missouri Department of Labor requires the federal prevailing wage be paid on all commercial and government projects. Last year, the Missouri Housing and Development Commission voted to apply that requirement to state residential construction projects, including private projects that receive tax credits.
With this new requirement, public project developers in Joplin now face an undue burden to pay wages that dont even accurately reflect the average rate for the area. If forced to adhere to the prevailing wage regulation, the number or quality of the projects will have to be reduced, sacrificing measures such as energy efficiency or storm resilience. Developers may have to build fewer homes, or switch to apartments instead of single-family housing units.
This is the last thing the people of Joplin need. Less than a year after the disaster, there are countless people depending on these projects to finally have a home again. And it does them little good if the housing they receive burdens them with outrageous monthly energy costs or isnt sustainable over the long-term.
In response to this, Sen. Robert Mayer, R-Dexter, has filed Senate Bill 439, which would, among other things, suspend prevailing wage requirements on state housing projects in federally declared disaster areas for five years.
The scope of this provision is narrow. The bill would only affect prevailing wages regulations in disaster areas, specific circumstances where new housing is needed to replace homes that were destroyed.
By freeing developers from this requirement, they can focus funds on building as many quality homes as they can, and ensure those homes will be storm resilient, energy efficient and last for decades. Instead of apartments, they can build single-family housing units, which create neighborhoods and bolster a sense of community.
This bill is in no way an attack on wage laws; it is a measure to help communities rocked by disasters recover and rebuild. There is also a misconception that without the prevailing wage requirement, workers on these projects will be paid bottom wages. This is not the case. Like with private projects, the market will determine the fairest rate.
This is an instance where a regulation with good intentions has become a roadblock to a community trying to recover. We must suspend the prevailing wage requirement for these projects. The citizens of Joplin need these homes; they need quality housing that truly meets their needs. To give them anything less would be a travesty.
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