Volume 38, Issue Number 11 July 28, 2004

Research Study Outlines Negative Impact Of Prevailing Wage Repeal In Missouri

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Attempts to repeal the prevailing wage law in Missouri are based upon the claim that repeal will save dollars on total construction costs and will bolster state and local budgets.

An independent research study conducted by the University of Missouri at Kansas City indicates that repeal of the prevailing wage statute in Missouri would not save dollars on construction costs and would result in a negative economic impact on the state’s families and taxpayers as well as the state and regional economies.

The study estimates the total economic loss due to repeal of the prevailing wage law in 2004 would be an annual loss of income and revenue between $317.8 million and $384.2 million.

In 2001, Missouri had the lowest number of injuries per worker of all reporting states in the region as well as the strongest commitment to job training and apprenticeship programs. In addition, the state reported the lowest number of severe injuries (e.g. workdays lost) of all reporting states in the region. Repeal of the state’s prevailing wage laws under consideration by the state legislature would probably endanger Missouri’s superior safety record.

In addition, the study indicates negative impact in these areas:

  • Lower wages for all construction workers in Missouri (direct impact of repeal in Missouri) and reduced incomes for other workers in industries located in Missouri (the indirect, or induced, impact of repeal). The repeal of the prevailing wage law would cost the residents of Missouri and their families between $294.4 million and $356.0 million annually in lost income.
  • Reduced health and pension benefits for construction workers in Missouri and, as a result, probability of eventual increased costs to state and local communities.
  • Reduced sales tax revenues to state regional economies. The repeal of the prevailing wage law would cost Missouri between $5.7 million and $6.9 million in lost sales tax collections annually.
  • Reduced corporate state income tax revenues.
  • Weakened system of construction apprenticeship training.
  • Increased occupational injuries and their associated costs.
  • Increased construction work done by out-of-state contractors in Missouri.
  • Lower productivity of the construction workforce.
For more information or a copy of the study contact Stan Kolbe, director of legislation, at skolbe@smacna.org or (202) 547-8202.

Editor: Rosalind P. Raymond rraymond@smacna.org  |  Asst. Editor/Writer: Cynthia Young cyoung@smacna.org

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