Welcome to the latest edition of The Merit Times, ABC of California’s quarterly newsletter spotlighting the people, policies, and projects shaping California’s merit shop construction industry. This issue arrives at a critical time, as our state grapples with workforce shortages, a shifting policy landscape, and the growing need for resilient infrastructure. Through it all, ABC remains steadfast in our mission to protect free enterprise, advocate for fair and open competition, and elevate the skilled professionals building California’s future.
In this edition, we examine pressing issues including the construction labor gap and apprenticeship program bottlenecks, Governor Newsom’s May budget revise, and ABC’s leadership at the Los Angeles Fire Recovery Summit. We also celebrate Greg Gutierrez’s appointment as Pacific Region Vice Chair and spotlight member achievements—from award-winning projects to workforce training success stories. Each article reflects our shared commitment to advocacy, innovation, and excellence across the industry.
We encourage you to engage with this newsletter—share it with your networks, contribute your voice to future issues, and connect with ABC of California as we continue championing opportunity and growth. Thank you for being an essential part of our community. Together, we’re building a stronger, more competitive California.
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CONSTRUCTION SHORTAGES THREATEN AMERICAN GROWTH
U.S. plans for new factories, new tech hubs—even new homes—are about to crash into one very inconvenient fact. As a recent RAND paper makes clear, not enough people work in construction to turn those plans into actual, hammer-and-nail reality. Not even close.
That one bottleneck threatens everything from America’s competitive edge in hightech manufacturing to its exit from a grinding housing crisis. The answer may seem simple: Just hire more construction workers. But construction jobs often require four or five years of training in an apprenticeship program. And as researchers found, those programs have not scaled up fast enough to meet the need.
“The impacts could be substantial,” said Marwa AlFakhri, a labor economist and associate policy researcher at RAND. “The cost to build anything will go up. Housing
will get put on the back burner. But we’ll also fail to meet a lot of our benchmarks for new manufacturing and semiconductor facilities. There just aren’t enough people to do the work.”
In fact, the United States would need to add more than 430,000 new construction workers to keep up with demand—this year alone. That’s according to estimates from Associated Builders and Contractors, a trade group. It would require roughly one in eight high school graduates to trade their mortar boards for a hard hat.
Apprenticeships are not the only way to fill that gap. Immigration and community colleges also supply workers. But state and federal leaders have looked to build up apprenticeship programs in recent years as a key part of the answer. President Donald Trump doubled federal grants for apprenticeships in his first term. U.S.
Labor Secretary Lori Chavez-DeRemer has promised to maintain that focus on apprenticeship programs— “growing those, investing in those”—in his second.
But like many improvement projects, this one has a few structural issues that need to be addressed: a low ceiling and a leaky pipeline.
The typical apprenticeship program is very small and very competitive. Nearly half of the roughly 7,000 construction programs registered in the U.S. have only one or two apprentices in training, researchers found. Program coordinators said the problem is not a lack of interest; it’s a lack of capacity. Some said they bring on new apprentices only once every two years and have to turn away most applicants. As a result, while hundreds of new apprenticeship programs have opened in recent years, they have not generated enough of a bump in new apprentices.
That’s the low ceiling, and it makes the leaky pipeline that much harder to explain. Around 40 percent of apprentices drop out before they make it to the end of their program.
That’s despite the earn-while-you-learn promise of apprenticeship programs—and the value of a credential, which one study pegged at more than $240,000 over the course of a 36-year career. It’s possible that some of those apprentices are leaving early to accept a full-time job. But researchers found that as many as half of those who leave do so in the first six months of their training.
“This was really surprising for us,” AlFakhri said. “We’re talking about an opportunity that’s paid, that can lead to meaningful employment, and that can offer a pathway to the middle class. If we could close that completion rate gap, that could meaningfully change the supply of construction workers in the near future.”
Just providing more up-front information to apprenticeship candidates might help. The work is hard, the hours are long—and the fact that so many drop out so early in their training suggests they didn’t fully appreciate what they were getting into. Support programs could also help ensure that apprentices have what they need to make it through the pipeline.
Raising the ceiling to increase capacity for more apprentices is going to require more significant work. It’s often not just a question of funding, but of time—and of safety. Apprenticeship mentors are also on the clock with their own work to do. And state laws often sharply limit how many apprentices they can look after at any one time. Amending those laws to allow mentors to oversee two apprentices instead of one would double capacity. But it has to be done with research and evidence that it wouldn’t undermine safety on a busy worksite.
Even with those changes, though, apprenticeships alone will not meet America’s need for construction workers. Currently, registered programs produce around 35,000 new workers a year, researchers found. Unregistered programs might double that. Community colleges and technical schools add tens of thousands more. So does immigration. Add them all up, and the nation still falls around 250,000 workers short of its estimated need.
RAND’s paper began with a question that more people should consider: Will apprenticeships and other career pathways produce enough workers to build America’s future? “The answer,” researchers wrote, “is a resounding ‘no.’” To build that future, they concluded, the U.S. must first find a way to build up its construction workforce.
Photo by Anthony Souffle/TNS/ABACA via Reuters
CHEERS TO GREG GUTIERREZ OF TRUITT CORPORATION –
ABC’S NEW PACIFIC REGION VICE CHAIR!
We are honored to recognize Greg Gutierrez, President/CEO of Truitt Corporation, on his appointment as ABC’s Regional Vice Chair for the Pacific Region. Greg currently serves as Immediate Past Chair on the ABC Central California Chapter’s Board of Directors and previously served with distinction as the Chairman. As an active member of the ABC Beam Club, Greg continues to recruit other industry leaders into the ABC community. His continued leadership and dedication to the merit shop philosophy make him an outstanding representative for our region. Join us in congratulating Greg on this welldeserved honor!
CALIFORNIA BUDGET: MAY REVISE
Governor Newsom released a May Revision to his proposed 2025–26 California state budget on May 14, proposing nearly $12 billion in budget actions to close an estimated 2025–26 deficit. In contrast, the Governor’s January proposal projected a small positive balance after two years of state deficits. The Governor’s proposal reflects increased uncertainty due to federal policy changes and proposals that are destabilizing economic conditions, resulting in a more negative fiscal outlook for the state.
The $226.4 billion General Fund spending plan would protect some investments made in prior years but notably proposes $5 billion in cuts, primarily to Medi-Cal, the state’s Medicaid program that provides health care coverage to over 14 million Californians. While many of the details are forthcoming, the Governor also proposes to partially close the budget gap through borrowing and fund transfers.
SIGNIFICANT BUDGET ADJUSTMENTS IN GOVERNOR’S BUDGET
In the area of Labor and Workforce Development, the following changes have been made to the Governor’s proposed budget from January 10:
• Unemployment Insurance Trust Fund Loan Interest – An increase of $8.5 million one-time General Fund in 2025–26 to align with updated estimates for the annual interest payment on the state’s Unemployment Insurance loan balance. This adjustment will bring the total estimated interest payment for 2025–26 to $642.8 million General Fund when combined with the estimated payment included in the Governor’s Budget.
• Workforce Innovation and Opportunity Act – May Revision Update – An increase of $20.4 million one-time in 2024–25 and an increase of $119.6 million one-time in 2025–26 to align with anticipated federal Workforce Innovation and Opportunity Act funding that will be available to support various workforce development programs.
• Department of Industrial Relations (DIR) Apprenticeship Training Grant Expansion – An increase of $18.2 million one-time from the Apprenticeship Training Contribution Fund for DIR to support apprenticeship training in construction and related trades. This funding is in addition to the $3 million included in the Governor’s Budget for this purpose.
• DIR Public Works Information Technology System Enhancements – An increase of $19.1 million from the Labor and Workforce Development Fund to continue modernization of DIR’s Public Works information technology system.
ABC CA BUDGET HIGHLIGHTS
To address the projected budget shortfall, the May Revision includes General Fund solutions to achieve a balanced budget. These include:
• Labor and Workforce Development Fund Loan – A loan of $400 million from the Labor and Workforce Development Fund to the General Fund from resources not currently projected to be used for operational and programmatic purposes.
• Regional Coordination for Career Education – A reduction of $3 million one-time General Fund for the Labor and Workforce Development Agency (LWDA) in 2025–26. The Governor’s Budget included $4 million in onetime General Fund for the LWDA to support evaluation of the expansion of regional coordination models to support implementation of the Master Plan for Career Education. The May Revision proposes reducing the amount available for this purpose to $1 million one-time General Fund. See the Higher Education and General Government and Statewide Issues chapters for more information on investments in the Master Plan for Career Education on page 61.
The full summary of the 2025 May Revise is found here.
LA FIRE RECOVERY SUMMIT
ABC Southern California was well represented on a panel at the recent BizFed Los Angeles Fire Recovery Summit on April 29th, where industry experts gathered to discuss the impacts of wildfires in the Los Angeles region. The panel, moderated by Angela Gibson-Shaw, Board Chair of BizFed LA, included voices from public policy, development, and construction, all reinforcing the importance of longterm resilience and proactive rebuilding strategies. Panelists included Alene Taber of Hanson Bridgett, Julia Juarez of the California Department of Insurance, Quentin Strode of the Vermont Slauson Economic Development Corporation, and Russell Johnson of the Associated Builders and Contractors of Southern California Chapter (ABC SoCal).
All the organizations represented are deeply involved in the ongoing efforts to rebuild and strengthen Los Angeles
communities impacted by the wildfires. The panel highlighted key areas essential to effective wildfire recovery, including developing sustainable insurance solutions and risk assessment practices to better prepare for future disasters. Efforts to streamline access to grants, loans, and other funding sources were also discussed, alongside the growing complexity of land use and zoning regulations that could impact rebuilding timelines. These insights point to the urgent need for coordinated, forward-thinking solutions. ABC SoCal and its members proactively lead through hands-on recovery work, policy engagement, and workforce development.
Russell Johnson highlighted the importance of involving licensed contractors by encouraging property owners affected by the fires to assemble a team that includes these professionals. He emphasized that qualified contractors could help identify
fire-resilient materials and recommend options that align with the property owners’ insurance settlements and available budgets. When discussing the status of Los Angeles’ rebuilding efforts, Johnson noted that progress is being made but urged patience: “The phase one clearance in the city of LA is 100% complete, according to the LA Building Department as of April 27th. For phase two, they’ve had about 3,500 people opt in and 1,500 people opt out.” He added that only about twenty of the 207 permits applied for the current firedamaged areas have been issued. At the same time, ABC and its members closely track legislation and advocate for fair and equal opportunities for all individuals and communities affected by the fires. This commitment is evident in ABC SoCal’s efforts on the ground. Members played a critical role in relocating Palisades Charter High School to the Sears building in Downtown Santa Monica, underscoring the organization’s leadership in postdisaster recovery. ABC remains committed to addressing the projected national shortage of approximately 439,000 skilled tradespeople by training more than 1,300 students in Southern California alone.
EXCELLENCE IN CONSTRUCTION GALA
On May 2nd, ABC NorCal celebrated the return of their Excellence in Construction Gala. It was an unforgettable night recognizing 12 outstanding projects and highlighting the people who helped build them. With over 200 guests in attendance, the room was buzzing with excitement. They had eight Women of the Year and six Craft Professional of the Year nominations.
This was also the perfect opportunity to honor Anne Quick, their VP of Compliance, who retired that night after nearly 42 years with the chapter. Anne was the queen of compliance and was dedicated to helping any member or staff in the CA chapters. She touched many lives and will be greatly missed.
FEATURED PROJECT: THE ARTHUR AT BLACKSTONE
This forward-thinking 41-unit affordable housing development remade a once beloved retail landmark into a vibrant community-oriented space. The 40,000 SQ FT project features a renovated two-story commercial building with 4,000 SQ FT of first floor retail space alongside two new three-story residential structures. Residents now benefit from behavioral health offices, a fitness room, communal kitchen and lounge, laundry, mike storage and multi-use space.
Brown Construction broke new ground (no pun intended) by using AI powered drones to verify earthwork, utility routing and concrete pour layouts — precision at every phase.
