On Wednesday, after pressure brough to bear by the Goldwater Institute the Phoenix City Council yesterday repealed its illegal “prevailing wage” mandate.
The ordinance would have restricted qualified businesses from competing for taxpayer-funded public-works projects unless they complied with a host of requirements.
The “Prevailing Wage Ordinance for City Projects” law, introduced on short notice with almost no chance for public scrutiny would have required businesses that contract with the city for construction projects costing more than $250,000 to follow a slew of new requirements.
The Goldwater Institute argued that the requirements hurt small businesses, minorities, younger workers, and all taxpayers in the process.
Goldwater believes 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 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.
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 pointed 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.