Dive Brief:
- The Associated Builders and Contractors released its 2018 Merit Shop Scorecard rankings this week, and the association ranked Florida No. 1 for its pro-construction policies, job growth and opportunities for contractors.
- The Sunshine State jumped from No. 9 last year, a move driven by its "free-enterprise and open-competition approach” to the construction industry, according to the ABC, as well as the growth of construction jobs and the number of career and technical education offerings. Michigan improved its score the most during the past year, moving from No. 24 to No. 7 after repealing its prevailing wage law, which the ABC said will lead to greater competition and reduced costs. The association ranked California second to last based on a supposed reduction in workforce development and career education initiatives, while Illinois brought up the rear because of its policies in the areas of project labor agreements, prevailing wages, workforce development and right-to-work regulations. The association also graded each state and Washington, D.C., on their public-private partnership policies.
- "Much of the movement up and down in the rankings was due in part to the level of state policymaker support for workforce development and technical education,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “With an estimated 500,000 open construction positions in the United States, it is essential that states prioritize workforce policies that recruit, educate and benefit the American worker and fill the skills gap.”
Dive Insight:
According to the U.S. Department of Labor, Michigan joins 22 other states that do not mandate prevailing wages for state- or locally funded construction projects. Lower pay rates can make the bidding process more competitive since there is no wage floor, but some critics argue that contractors shouldn't try to shave their budgets by reducing worker pay.
And while prevailing wage foes maintain that the public will benefit through lower project costs when there is no mandated pay rate, at least one study refutes that assertion. A Midwest Economic Policy Institute study on the 2015 Indiana repeal of its prevailing wage law found that the promised 10% to 20% savings on public works projects never materialized. In addition, another study by the Illinois Economic Policy Institute determined that prevailing wage laws helped reduce the disparity between African-American and white construction workers.
However, there are also studies that have reported benefits in states with no prevailing wage laws. The University of Kentucky Center for Business and Economic Research found that the 2016 repeal of West Virginia prevailing wage mandate reduced school construction project costs by 7.3%, saving taxpayers approximately $1 million.
