The Associated Builders and Contractors (ABC) has just unveiled its much-anticipated annual Merit Shop Scorecard. This comprehensive report measures which states are truly conducive to the thriving of the construction industry. It provides valuable insights and key takeaways that can shape the future of construction in the United States.

Unveiling the States Best for Construction Industry Thriving

Project Labor Agreements and Their Impact

The 2024 Building America: The Merit Shop Scorecard meticulously rates state laws, programs, policies, and statistics in seven crucial categories. One of these is project labor agreements. Low-performing states often encourage or require the use of government-mandated PLAs on state and/or local projects. This can have a negative impact on open shop contractors and taxpayers. In contrast, high-performing states like Wisconsin have fair and open competition policies that prohibit such agreements, ensuring market-driven wages and protecting workers with their right-to-work laws.In Wisconsin, for instance, the construction industry has seen sustained positive job growth. With a five-year job growth rate of 4.4%, it stands out as a leader. The state also remains committed to quality career and technical education, with a 97.4% graduation rate for students in such programs and a 91.4% rate of postsecondary CTE students placed in careers and/or apprenticeship programs. This robust workforce development pipeline delivers a construction labor supply that exceeds demand, even in the midst of a severe nationwide construction labor shortage.

Prevailing Wage Laws and Their Significance

Prevailing wage laws play a vital role in the construction industry. States with favorable prevailing wage laws ensure that workers are paid fairly for their work. In the top-performing states, such as Wisconsin and Arkansas, these laws contribute to a healthy construction market. In Arkansas, which came in second behind Wisconsin in the 2024 scorecard, the construction industry has experienced a 6.1% growth rate in jobs. The state's excellence in fostering and educating a skilled workforce is evident, and its CTE programs deliver outstanding results.These states understand the importance of providing workers with a fair wage and the necessary skills to succeed in the construction industry. By maintaining strong prevailing wage laws, they attract top talent and create a stable work environment.

Right-to-Work Laws and Their Benefits

Right-to-work laws are another crucial factor in the construction industry. States with these laws, like Wisconsin, offer greater flexibility and choice for workers. It allows them to join or not join a union without facing discrimination. This promotes a more competitive labor market and encourages economic growth.In Wisconsin, the right-to-work law has played a significant role in attracting construction projects and creating job opportunities. The state's commitment to fair and open competition, along with its right-to-work law, has made it a top choice for construction businesses. It also ensures that workers have the freedom to choose their employment options and negotiate their wages.

Public-Private Partnerships and Workforce Development

Public-private partnerships are essential for the growth and development of the construction industry. These partnerships bring together the resources and expertise of both the public and private sectors to fund and execute construction projects. In states like Wisconsin and Arkansas, public-private partnerships have been instrumental in driving workforce development.Wisconsin, for example, has a well-established workforce development pipeline that delivers a construction labor supply over 100% of demand. This is crucial in a nationwide construction labor shortage. The state's focus on quality career and technical education, along with public-private partnerships, has created a skilled workforce that is ready to take on construction projects.Arkansas also excels in this area. Its 6.1% growth rate in construction industry jobs is a testament to the effectiveness of public-private partnerships in fostering a skilled workforce. The state's commitment to CTE and workforce development has paid off, resulting in a highly skilled construction workforce.

CTE and Job Growth Rate

Career and technical education (CTE) programs are crucial for preparing the next generation of construction workers. States with strong CTE programs, such as Wisconsin and Florida, have a higher job growth rate in the construction industry.In Wisconsin, the 97.4% graduation rate for students in CTE programs and the 91.4% rate of postsecondary CTE students placed in careers and/or apprenticeship programs demonstrate the effectiveness of these programs. The state's focus on CTE has resulted in a highly skilled workforce that is in demand in the construction industry.Florida, a former first-place state, continues to perform highly across the board. With one of the largest economies in the country and extensive labor needs, it has maintained a particular focus on innovative career-centered education opportunities. This has led to positive results for craft professionals and the construction workforce as the state experiences record population growth.

The Bottom Five States and Policy Reforms

The bottom five states in the Merit Shop Scorecard, namely Washington, the District of Columbia, Illinois, New York, and Hawaii, received poor ratings for creating conditions and policies that allow merit shop contractors to thrive. These states need to consider policy reforms to attract more construction projects and create a more favorable business environment.For example, Michigan fell to No. 33 in 2024 due to the full repeal of right-to-work legislation. This has had a negative impact on the state's construction industry and its ability to attract construction projects. States need to learn from these examples and implement policies that promote economic growth and attract construction businesses.

Conclusion

Policies and processes that protect free enterprise, promote economic growth, reduce regulatory burdens, and expand workforce development are crucial for the construction industry. States like Wisconsin, Arkansas, Kentucky, West Virginia, and Florida set the standard in creating favorable conditions for the construction industry and its workforce to thrive. Hard-working taxpayers are best served by a regulatory environment that creates a level playing field for all contractors to build America with fewer obstacles.ABC's Merit Shop Scorecard provides valuable insights and data that can help guide policy decisions and promote the growth of the construction industry. By focusing on key areas such as project labor agreements, prevailing wage laws, right-to-work laws, public-private partnerships, and CTE, states can create a more prosperous construction industry and a better future for all.