Goldwater Institute Asks Court to Throw Out Arizona Minimum Wage Law That Doesn’t Apply to Unionized Companies

Phoenix—Last November Arizona voters approved a law mandating an increase in the minimum wage and new time-off benefits that was supposed to help “all Arizonans employed by any employer in Arizona.” But the initiative included an explicit loophole for one group of employers: those that have unionized employees.

Today, the Goldwater Institute filed a “friend of the court” brief in the case challenging the constitutionality of the minimum wage law. The Institute argues that in addition to being bad policy with measureable negative consequences, the law is illegal because it doesn’t apply equally to all businesses.

“Arizona’s new minimum wage law isn’t about protecting workers—in fact, it doesn’t even apply to all workers,” says Timothy Sandefur, vice president for litigation at the Goldwater Institute. “This initiative carves labor unions out of the law. Any company that has unionized workers doesn’t have to provide the benefits. This cynical scheme won’t just hurt companies that don’t hire union workers. It’s already hurting organizations that help the developmentally disabled and other vulnerable populations.”

The Arizona Republic wrote that the wage hike is seriously affecting nonprofit organizations that have state contracts to provide services to Arizona’s most vulnerable residents. These organizations will be forced to pay the higher minimum wage to their entry level workers, but they haven’t received an increase in their contract budgets from the state to make up for the higher expenses. This has left many organizations struggling to serve as many people as they planned. For example, a Tempe-based organization that operates 13 group homes and serves over 400 individuals has said it will have to stop accepting new patients.

“We think minimum wage laws are bad policy. It doesn’t help poor people to make it harder for them to find work. But setting aside the argument about whether a higher minimum wage is a good idea, this initiative is already having negative consequences for the very people it was supposed to help. And the fact that it only applies to certain companies and organizations is just wrong. We don’t get to pick and choose who has to follow the law. The Court needs to scrap this initiative,” said Sandefur.