Bridget DonaheyA Maricopa County Superior Court judge on Monday ruled that attempts by Phoenix and Tucson to establish prevailing wage ordinances for public works projects violated state law.
Attorneys from the Goldwater Institute successfully argued on behalf of the Associated General Contractors (AZAGC), the Arizona Builders Alliance (ABA), and the Associated Minority Contractors of Arizona (AMCA).
Prevailing wage laws: Rather than allowing contractors to negotiate agreements with workers to determine what a job will pay, prevailing wage laws require contractors on city projects to meet standards determined by the U.S. Department of Labor based on the typical payment for different worker groups in the region.
Opponents to the ordinances argued that the cities were in violation of state law that bans municipalities from adopting prevailing wage laws.
The challenge
The plaintiffs argued that municipal prevailing wage laws violate a 1984 law that specifically prohibited prevailing wage mandates.
The cities, relying on an opinion by Attorney General Kris Mayes, argued that a 2006 ballot measure passed by voters to raise the statewide minimum wage and to permit cities to adopt their own minimum wage essentially overturned the 1984 law.
The outcome
Judge Bradley Astrowsky ruled that the minimum wage law adopted by voters has no bearing on the existing law banning municipal prevailing wage ordinances.
“A prevailing wage ordinance is not a minimum wage law, and the Minimum Wage Law did not impliedly repeal the prevailing wage prohibition because the two laws can be harmonized by ‘reasonable construction,’” Astrowsky wrote.
Astrowsky drew a further distinction between minimum wage and prevailing wage, writing, “They have fundamentally different underlying policy goals. Moreover, unlike minimum wage laws, which set a single, across-the-board floor on wages, prevailing wage measures impose a complex, fluctuating schedule of wage standards (determined by federal law and regulation) meant to approximate average wages for specific occupations and localities.”
Reaction
The AZAGC cheered the decision.
“We are thrilled with the court’s decision, which upholds the principles of a free market and removes unnecessary burdens from contractors,” AZAGC President David Martin said. “We encourage the City of Phoenix and the City of Tucson to accept this ruling and avoid further wasting taxpayer money on appeals.”
Goldwater Institute Vice President for Legal Affairs Timothy Sandefur called the decision “a victory for Arizona taxpayers—who deserve to have public works projects run as closely as possible to true market conditions, instead of having their costs decreed by politicians in order to benefit their political friends. It’s also a win for workers themselves, who deserve to do work in a competitive environment where wages are based on merit, instead of political dictate.”
Phoenix City Councilwoman Betty Guardado said she was “deeply disappointed by the Maricopa County Superior Court’s decision to deny the city the right to ensure those working within its purview receive fair living wages, improved benefits, and safer working conditions.”
Broader implications
The defeat of the Phoenix and Tucson ordinances may deter other Arizona cities from pursuing similar legislation. Tempe has flirted with establishing its own prevailing wage ordinance.
For its part, Phoenix is “exploring potential next steps” according to a statement by Mayor Kate Gallego.
Joseph Kavetsky
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