The American people are frustrated with the federal government. An October Gallup poll found a plurality of Americans ranked “dysfunctional government” as the most serious problem facing the country. The government shutdown and subsequent partisan disputes are just the latest signs that Washington, D.C., isn’t working. Lately, it seems like creating the conditions for America’s business community to thrive and grow is the last thing on Congress’ mind.

Fortunately, some states are stepping up to the plate as governors and legislators join forces to help put citizens back to work. Many of these leaders have high approval ratings, providing further evidence that good policy is good politics.

A significant number of states have taken action on issues directly affecting Associated Builders and Contractors (ABC) and its members, including working to end government-mandated project labor agreements (PLAs). PLA mandates are special interest schemes that discourage competition from merit shop contractors and their workers by requiring construction projects to be awarded only to contractors and subcontractors that are willing to agree to organized labor’s onerous demands. Numerous studies show PLAs can increase construction costs by nearly 20 percent.

Since President Obama issued his executive order encouraging the use of PLA mandates on large-scale federal construction projects in 2009, 14 states have banned government-mandated PLAs on public construction projects in their states. In total, 18 states have banned these wasteful and discriminatory mandates on taxpayer-funded construction projects. While more states should enact government neutrality with regard to PLAs, the trend is positive. There is no question that as local leaders learn more about the impact of wasteful and discriminatory PLAs, they are choosing to say “not in our state.”

Leaders in many states also are taking a hard look at prevailing wage laws. Like the federal Davis-Bacon Act requirements, these laws create an artificial wage floor for workers on state and locally funded construction projects. In many states, the wage rates are taken either directly or indirectly from union collective bargaining agreements. Additionally, some states’ compliance obstacles create a barrier to entry for many small and minority-owned businesses on certain publicly funded construction jobs.

Earlier this year, Tennessee leaders recognized that the prevailing wage law was an unnecessary barrier to job growth and Gov. Bill Haslam (R) enacted a bill repealing prevailing wage requirements on vertical construction projects. In addition, Ohio lawmakers increased the dollar amount thresholds that trigger their prevailing wage requirements in 2011. These changes will exempt many small construction and maintenance projects from costly and burdensome state requirements.

Leaders in a number of other states, including Michigan, Pennsylvania and Kentucky, are considering whether to alter their state prevailing wage laws. ABC and the rest of the business community is actively engaged to make sure key decision-makers know the positive impact changes to these laws can have on public finances and job growth.

While PLA and prevailing wage reforms are critical to the construction industry, there is no question that the Right to Work laws adopted in Michigan and Indiana are the most significant legislative enactments in the country for the business community. These laws prohibit workers from being forced to pay union dues or fees to keep their jobs. In 2012, Michigan and Indiana joined 22 other states with Right to Work laws in place.

Right to Work laws have proven to facilitate economic development. Numerous studies show Right to Work states have stronger economic and job growth and a higher per capita income after factoring in the cost of living. Additionally, workers in Right to Work states have more disposable income. In the month after adopting its Right to Work law, Indiana accounted for one in eight private sector jobs created in America.

The American economy is starting to regain its footing after the worst economic downturn since the Great Depression. On one side, Washington lawmakers seem to be more interested in scoring political points than creating the conditions for employers to create jobs. On the other side, governors and state legislators are rolling up their sleeves and getting to work.

The good news is governors and state legislators often become candidates for the White House and Congress. Perhaps they will bring their willingness to enact pro-growth public policies to Washington someday.


Andy Conlin is senior manager of state and local affairs for Associated Builders and Contractors. For more information, email conlin@abc.org.