Another Victory Over Municipal “Prevailing Wage” Overreach

Fighting government overreach, especially at the local level, never really ends. But if you keep at it, one victory for liberty can turn into another and another—dismantling government’s wall of tyranny one brick at a time. That’s what has happened in Phoenix, Tucson, and, most recently, Tempe.

Last year, shortly after taking office, Arizona Attorney General Kris Mayes told Arizona cities that they were free to pass “prevailing wage” ordinances—onerous regulations that essentially force any contractor who wants to do business with the government to adopt union-shop practices, along with imposing bureaucratic red tape, reporting requirements, and heavy fines for any missteps. AG Mayes’ opinion was wrong, as Arizona law expressly prohibits cities from enacting these kinds of measures. But several Arizona cities were emboldened by AG Mayes’ support and proceeded to impose misguided (and illegal) prevailing wage ordinances.

The Goldwater Institute immediately fought back, suing the cities of Phoenix and Tucson on behalf of the Associated Minority Contractors of Arizona, the Arizona Builders Alliance, and the Arizona Chapter of the Associated General Contractors of America back in January. In July, Goldwater won that lawsuit when a state court struck down both those cities’ ordinances. The victory means Arizonans will be free to work on public projects in the state’s two largest cities without being stifled by ill-conceived regulations and bureaucratic red tape.

Despite that legal challenge, Tempe decided to pursue its own prevailing wage ordinance.  In response, attorneys Mike Bailey and Nate Curtisi with the Arizona Chamber of Commerce and the Goldwater Institute sent Tempe a letter informing city leaders of the illegality of the ordinance.

Now, Tempe is backing down too. At its Thursday meeting, the Tempe City Council unanimously voted to suspend its own prevailing wage ordinance (enacted in May 2024) in light of Goldwater’s recent court victory.

It’s welcome news for businesses in Tempe. After all, when the government imposes restrictive “prevailing wage” mandates, everybody loses. Taxpayers have to pay more and wait longer for projects to get done; employees have a harder time finding work; and businesses, especially small businesses, suffer from higher costs and fewer opportunities.

“It was the right move for the Tempe City Council to suspend its prevailing wage ordinance, which was a clear violation of state law,” said Danny Seiden, President and CEO of the Arizona Chamber of Commerce & Industry. “But aside from the proposal being illegal, the policy itself is highly problematic. These types of overreaching regulations not only increase costs and delay projects but also stifle innovation and limit opportunities for local businesses to thrive. The Chamber will continue to push back against mandates at every level that hinder our economic growth and competitiveness.”

Prevailing wage laws have been stifling free enterprise throughout the country for nearly a century, and they continue to be pushed by politicians, unions, and other special interests. As with so many other deeply entrenched government programs, defeating these measures takes persistence and determination. But at the Goldwater Institute, we won’t stop until the job is done.

John Thorpe is a Staff Attorney at the Goldwater Institute.