Methodology

Measured Criteria:

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 provides financial incentives directly to employers or associations that train their workers through registered apprenticeship programs or other industry-recognized programs like those provided by NCCER (formerly the National Center for Construction Education and Research); state provides financial incentives to employers that hire workers that possess an industry-recognized credential or are a graduate of a registered apprenticeship program. Grade is based on the number of programs or tax incentives offered to businesses and takes into account other eligibility factors. States  with only federally funded programs and tax credits (including, but not limited to, the Work Opportunity Tax Credit and on-the-job training programs funded by the Workforce Investment Act (WIA) or Job-Driven National Emergency Grants) received the lowest score.
    • 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.
    • Job Growth Rate: Data provides the Compound Annual Growth Rate in construction from 2011 to 2016 using data from the month of August. States with a higher growth rate were given higher scores than states that had a low or negative growth rate.   

Nongraded Criteria:

    • 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 (2015).
    • 2015 Incidence Rate: Data tracks the 2014 incidence rate in construction, which is collected and reported by the Bureau of Labor Statistics (BLS). This is a lagging indicator, with 2015 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 2015.
    • Marijuana Laws: More and more states are changing their laws related to marijuana. This data provides information on each state’s current marijuana policies.

Business Facts:

  • Data on minimum wage, perent of public pensions funded, effective property tax rate, corpororate income tax rate, and capital spending percentage has been included to provide broader context for each state’s business climate.

References:

These and other resources were used in researching the data provided in the Merit Shop Scorecard.