Every day, lawmakers at the federal, state and local levels of government consider policy proposals on labor relations, procurement, workforce development, infrastructure and other issues that affect the construction industry. Because of this, its critically important to be engaged and informed on key issues when heading to the ballot box this November. Understand these issues and how they affect our industry.
The Tax Cuts and Jobs Act is driving strong economic growth, and if we add an infrastructure package of $1 trillion into the equation, there could be more than one million skilled construction jobs waiting to be filled. Policymakers must commit to supporting an all-of-the-above strategy for workforce development. Apprenticeships, both market-driven and government-defined, should have equal access to incentives such as tax breaks, tuition assistance, scale wages and increased access to career and technical education programs. The construction industry is not a rigid career pathway. Rather it provides limitless opportunities for students, veterans and people re-entering the workforce or changing careers to reach their full potential. Once they decide on a career in construction, workers can participate in multi-skill training, where they can learn more than one skill to give themselves a competitive advantage in the marketplace.
Policy initiatives that accomplish this should be supported, including:
- The Strengthening Career and Technical Education for the 21st Century Act (H.R. 2343 – Thompson), that better aligns CTE programs with industry demand.
- The PROSPER Act (H.R. 4508 – Foxx), which reforms the Higher Education Act to create career paths for students by opening federal tuition assistance to more condensed, industry-recognized education programs and by promoting all forms of learning.
- Reauthorization of the Perkins Career and Technical Education Act that modernizes funding levels and ensures students are learning in-demand skills.
To bring more Americans into skilled construction careers and help companies find the workers they desperately need, the public and private sectors need to train the construction professionals of the future using innovative and flexible apprenticeship models like just-in-time task training, competency-based progression, work-based learning and government-registered training to build a safe, skilled and productive workforce.
The Tax Cuts and Jobs Act (H.R. 1) provides a simpler and fairer tax code, leading to more economic freedom and global competitiveness. The vast majority of construction companies will benefit from the new 20 percent deduction for qualified pass-through income. Along with the largest corporate rate cut in U.S. history to 21 percent, the doubling of the estate tax exemption, reductions to individual tax rates, the repeal of the corporate alternative minimum tax and expansion of small business accounting methods, the tax reform bill will ease burdens on the construction industry, family-owned businesses and hardworking Americans. The Tax Cuts and Jobs Act will unlock the full potential of the construction industry, creating new jobs and growing the economy. Construction businesses are already feeling the positive effects of tax reform, both directly to their bottom lines, and more broadly as a growing economy drives new construction. As a result, contractors can plan to hire more employees and to invest in workforce development. In addition, their employees have seen an increase in their paychecks.
Congress should act to ensure permanent enactment of the Tax Cuts and Jobs Act’s expiring provisions, including the qualified business income deduction under Section 199A, 100 percent bonus depreciation, the current individual rate schedule and increased estate tax exemption levels.
Systemic labor shortages rank at the top of companies’ lists of most significant problems and are already contributing to rising costs in construction. Despite efforts to recruit and train American workers, the construction sector faces a very real growth and affordability crisis if work is increasingly delayed or even cancelled due to a lack of domestic labor. True immigration reform must include a mechanism for construction industry employers to get the temporary foreign workers they need when American workers are unavailable. Our industry must be able to access a program where we can hire legal, foreign-born workers in order to supplement the U.S. construction workforce when the economy needs them.
There is also a need to establish a fair, efficient and workable national employment verification system that provides confirmation of the work authorization status of prospective employees but that also ensures liability protections for employers who comply in good faith. The Legal Workforce Act recognizes the concerns of the business community by including strong safe harbor protections for employers and, of significant importance to companies operating in the construction field, continues the requirements of current law by mandating all employers be held responsible for the work authorization status of their direct employees, maintaining current liability for employers who knowingly use subcontract labor to circumvent immigration law.
Congress must address the presence of the undocumented population in a respectful, common-sense manner that aids the workforce needs of industry sectors like construction. Opportunities to create an earned path toward legal permanent status or citizenship for undocumented workers who meet certain requirements, particularly those “Dreamers” who were brought here as children and have voluntarily come out of the shadows to pursue an education, establish careers, and serve our country in uniform, should be pursued.
With TPS designation for several Central American countries set to expire soon, the sudden exodus of legally authorized workers from the construction sector will only exacerbate existing labor shortages and lead to project delays at a cost to taxpayers and consumers. Congress should work with the administration to find an opportunity to extend TPS status for deserving nations, and to provide an opportunity for TPS designees who are productive members of the workforce to remain in the United States, to ensure these hardworking individuals continue to participate in the American workforce at a time when they are most needed.
Fair and Open Competition
In order to create the conditions for innovation and free enterprise, the ultimate priorities must be to promote open competition, efficiency, fairness and equality in government contracting. Mandating project labor agreements (PLAs) needlessly limits the pool of experienced and qualified bidders able to deliver the best possible product to taxpayers at the best possible price. Government-mandated PLAs discourage merit shop contractors from bidding on taxpayer funded construction contracts and drive up costs between 12 percent and 18 percent, which results in fewer infrastructure improvements and reduced construction industry job creation.
In 2009, President Obama issued an executive order encouraging federal agencies to require the use of PLAs on federal and federally assisted contracts exceeding $25 million, and this EO currently remains in place, even under the Trump administration. Legislation should be enacted that would restore fairness and neutrality in government contracting by prohibiting federal agencies from requiring or prohibiting contractors to execute PLAs as a condition of winning a contract to build a federal or federally assisted construction project. The Fair and Open Competition Act (H.R. 1552/S. 622) has been introduced in both chambers of Congress. States also have taken action to guarantee a level playing field in government contracting and that more projects get done at the best possible price. To date, 24 states have taken action ensuring government neutrality in contracting by prohibiting government-mandated PLAs on projects funded by taxpayers.
Federal Election Commission regulations require corporate-member trade association political action committees to obtain “prior approval” from member corporations before soliciting eligible employees for support. This requirement also prevents member corporations from approving solicitations by more than one trade association per year. The requirement discriminates against these trade associations’ PACs, as corporate, labor union and individual membership association PACs are not subject to the prior approval requirement.
The Prior Approval Reform Act (H.R.2101 – Amodei) would repeal the prior approval requirement and ensure that members’ companies are able to exercise their constitutional rights to join in support of or opposition to candidates. The House also previously passed language in the 2017 and 2018 appropriations bills to defund the enforcement of prior approval, which should be preserved in the 2019 appropriations bill.
One of the most abusive federal contracting policies affecting the construction industry is the expanded enforcement of “prevailing wage” requirements under the Davis-Bacon Act.
The federal Davis-Bacon and Related Acts govern wage requirements for contractors and subcontractors performing federally funded or assisted contracts in excess of $2,000. Administered through an unscientific and fundamentally flawed survey process by the U.S. Department of Labor (DOL), these so-called “prevailing” wages hinder economic growth, increase the federal deficit, and impose enormous burdens. Davis-Bacon stifles contractor productivity by raising project costs, and imposes rigid craft work rules that ignore skill differences.
Congress should carry out full repeal of the Davis-Bacon Act, and state and local legislative bodies should also repeal their prevailing wage laws that mandate wage and benefit rates that do not reflect the current construction market. In the absence of full repeal, legislative and regulatory efforts designed to mitigate the Act’s negative effects should be supported, and any expansion of Davis-Bacon into areas of public and private projects in which it has not been previously mandated should be opposed.