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The Missouri Senate signed a bill, House Bill 34, last month to modify how prevailing wage is calculated to make it more economical for rural communities. In many areas of the state, the wages required for government projects are above those paid in the private sector, up to 10 times more. The changes will encourage more bidding, promote local small businesses and reduce the cost and financial burden to local taxpayers.

Missouri’s prevailing wage is calculated by the Division of Labor Standards. Prevailing wage should use the data on wages paid for occupations in each county to set the rate contractors are paid on public works projects. However, about 70% of Missouri counties do not have any wages reported, which means rates are determined by different states’ or previously reported wages. When this happens, it usually inflates the rate taxpayers pay.

Missouri Senate leader Tom Dempsey says, “That means construction workers that would have been employed, aren’t. These modifications will bring the wages more in line with what is normally paid in the local area.” The bill now awaits the governor’s signature before it will become law. For more on this bill and others, click here.