Every state received a score in each of the following seven categories measuring critical laws, programs, policies, and statistics impacting the merit shop contracting community. An overall comparative ranking was then assigned to each state by considering all measured categories, with particular emphasis given to the first three criteria of project labor agreements, prevailing wage, and Right to Work state laws and/or executive orders. Ties in combined score were broken by performance on ABC core issues and a consideration of the other scored criteria grades.
- Project Labor Agreements (PLAs): State policies on government-mandated PLAs on public and publically assisted projects. Grade determined by whether a state’s policies prohibit, require, encourage or are silent on whether a contractor can be required to agree to a PLA as a condition of winning a state or state-assisted construction contract. The best score is given to states that have a statute in place that closely mirrors ABC’s priority legislation, the Government Neutrality in Contracting Act, which prohibits government-mandated PLAs.
- Prevailing Wage: State policies requiring contractors performing work on contracts procured by public entities or with a certain threshold of public funding to pay a government-determined prevailing wage to construction workers employed on a contract subject to the requirements. States with no prevailing wage received the highest grade, and states with far reaching exemptions received the next highest grade. Remaining scores were based on the state’s dollar threshold for triggering prevailing wage coverage. States with higher dollar thresholds received better grades than those state with low or no preaviling wage threshold.
- Right to Work: Right to Work law or other statutory protection of a worker’s right to secure employment without being forced to join a union. Graded on a yes/no basis, with only two grades available. States with Right to Work laws received the highest score, while states without these statutes received the lowest score.
- Public-Private Partnerships (P3s): State allows public sector entities to enter into contracts with private sector entities in which both sectors share the risk and revenue from a project. Grade depends on whether state law authorizes P3s on all projects, allows unsolicited bids, authorizes on transportation projects only, authorizes on social infrastructure projects only, or not at all.
- Workforce Development: State offers grants, tax credits or other incentives to businesses that expand their workforce or train or up-skill their existing workforce. Grade is based on how much a state spends, per business establishment, on workforce preparation and development programs, which includes programs that educate, train and recruit workers in order to improve the state’s labor base and boost economic development. Using labor projection data, states are also graded on the current construction labor supply’s ability to meet peak labor demand. States with only federally funded programs and tax credits (including, but not limited to, the Work Opportunity Tax Credit and in-the-job training programs funded by the Workforce Investment Act (WIA) or Job-Driven National Emergency Grants) received the lowest score. States with policies restricting merit shop contractors from participating in workforce development grants, incentives, or tax credits were penalized. States that apply uneven rules and regulations based on union affiliation were also penalized.
- Education: Grades were reflective of the percentage of career and technical education high school graduates that were placed in college or careers. Extra points were awarded to states that recognize NCCER as approved curriculum for CTE programs. The latest data available is from 2018.
- Job Growth Rate: Data provides the 5-Year Compound Annual Growth Rate in construction from 2015 to 2019 using data from the month of September. States with a higher growth rate were given higher scores than states that had a low or negative growth rate.
- Prompt Pay: State has public and private prompt pay requirements for owners and higher tier contractors to pay subcontractors.
- Immigration/E-Verify: Identifies states that require employers or state contractors to utilize E-Verify. ABC National’s immigration policy calls for federal preemption of state-level immigration-related requirements.
- State GDP: Percentage of state GDP directly resulting from nonresidential construction (2019).
- 2015 Incidence Rate: Data tracks the 2019 incidence rate in construction, which is collected and reported by the Bureau of Labor Statistics (BLS). This is a lagging indicator, with 2019 being the most recent information reported through the BLS survey process. The rate is calculated as the number of incidents per 100 full-time workers. While this is important information to have on hand, it remains non-scored because the variables that affect incidence rates are numerous and require much greater context to demonstrate the specific conditions that lead to lower rates.
- Occupational Safety and Health Oversight: State occupational safety and health entities versus states controlled by the federal Occupation Safety and Health Administration.
- Construction Industry Unionization Rate: Data indicates how many and what percentage of a state’s construction workforce belonged to a labor union in 2019.
- Marijuana Laws: More and more states are changing their laws related to marijuana. This data provides information on each state’s current marijuana policies.
- Data on minimum wage, percent of public pensions funded, effective property tax rate, corporate income tax rate, and capital spending percentage has been included to provide broader context for each state’s business climate.
These and other resources were used in researching the data provided in the Merit Shop Scorecard.
- Council for Community and Economic Research
- Association for Career and Technical Education
- Construction Skilled Labor Risk Analytics
- National Council for Public-Private Partnerships
- Bureau of Labor Statistics
- United States Department of Labor
- The Truth About PLAs Blog
- ABC’s State-by-State Construction Economics
- Center of Budget and Policy Priorities
- National Conference of State Legislatures
- Tax Foundation
- National Center for Construction Education and Research
- S&P Global
- State agency and department sites