An Arizona judge has struck down prevailing wage ordinances approved by leaders in Phoenix and Tucson. It was set to take effect July 1.
Labor unions support prevailing wage ordinances while business groups oppose them. A prevailing wage is different from a minimum wage. It’s determined by the U.S. Department of Labor and is generally no less than the average local wage paid to workers in similar positions.
The Goldwater Institute sued alleging cities violated state law by adopting prevailing wage ordinances.
“Phoenix's ordinance had these onerous requirements to maintain records and how to keep them. It gave small businesses very little opportunity to challenge disputes around these things,” said Jon Riches, vice president for litigation at Goldwater. “At the end of the day, the marketplace should determine wages.”
Phoenix’s ordinance was aimed at city-funded construction projects worth at least $4 million and excluded housing projects for lower-income residents.
“Today’s decision is disappointing, and we are exploring potential next steps. Those building the future of our city deserve to be paid fairly and I plan to exhaust every legal avenue to ensure workers earn the wages they deserve," said Phoenix Mayor Kate Gallego in an email.
In a statement, Councilwoman Betty Guardado said, “We work every day to seek solutions for outpaced inflation, the affordable housing crisis, those experiencing homelessness and so much more. Yet we are met with decisions like this that undermine our ability to offer better living wages. It's disappointing that the court has denied us this critical tool to support our workforce.”
When the council discussed and voted on the prevailing wage ordinance in January, Mike Gardner representing the Arizona Builders Alliance said, “We’re still trying to identify the problem that exists in the marketplace that government action is needed. Wages in the construction trade today are the highest that they’ve ever been.”
At the same meeting, Jason Sangster, with Ironworkers Local 75, told council members, "I guarantee you ironworkers will take that money they earn building these projects and pay their mortgages, but food for their family, shoes for their children. Passing a prevailing wage will help all of Phoenix construction workers be able to afford to live in a city they are proudly building while boosting the local economy.”
Councilmembers Debra Stark, Ann O’Brien and Jim Waring voted against the ordinance while Mayor Kate Gallego, Councilmembers Laura Pastor, Kesha Hodge Washington, Kevin Robinson and former member Yassamin Ansari voted for it.
