VICTORY! Phoenix Ditches Illegal ‘Prevailing Wage’ Mandate After Goldwater Demands Repeal

In a victory for hardworking Arizonans, the Phoenix City Council yesterday repealed its illegal “prevailing wage” mandate—less than a week after the Goldwater Institute demanded it do so.

The ordinance would have restricted qualified businesses from competing for taxpayer-funded public-works projects unless they complied with a host of burdensome requirements—hurting small businesses, minorities, younger workers, and all taxpayers in the process. Now, Arizonans will be free to work on public projects in Phoenix without being stifled by ill-conceived regulations and bureaucratic red tape. The repeal is also a victory for Phoenix residents and taxpayers, who benefit when private businesses are allowed to compete to provide the public with the best services at the best price.

The “Prevailing Wage Ordinance for City Projects” law, introduced on short notice with almost no chance for public scrutiny from anyone it would impact, required businesses that contract with the city for construction projects costing more than $250,000 to follow a slew of new requirements: they would have had to provide their employees with wages and benefits based on complicated formulas produced by the federal government, keep painstaking records, and comply with a host of other rules and regulations. Worse still, all these regulations came with the risk of heavy fines and potentially crippling lawsuits, even for minor infractions.

The ordinance would have had many detrimental effects, cutting into businesses’ already-thin margins and making it cost-prohibitive for them to hire entry-level employees, while also forcing taxpayers to pay more and wait longer for public projects to get done.

But the Goldwater Institute wouldn’t let this mandate go unchallenged. In a letter to the council sent on behalf of the Associated Minority Contractors of Arizona and Arizona Builders Alliance—which together represent dozens of businesses—Goldwater points out that the ordinance isn’t just bad policy; it’s illegal. In particular, it violates a voter-approved state statute, A.R.S. § 34-321, that prohibits cities from doing precisely what Phoenix did: imposing “prevailing wage” requirements on public-works contractors.

Yesterday’s repeal is good news for businesses, their employees, and all taxpayers—and it’s a reminder that Goldwater will never stop fighting to hold government accountable and to defend Americans’ economic freedom from burdensome, counterproductive regulations.

John Thorpe is a Staff Attorney at the Goldwater Institute.