Phoenix passes prevailing wage ordinance for some workers despite potential legal concerns

PHOENIX — The city of Phoenix on Tuesday passed a prevailing wage ordinance, guaranteeing that workers on local construction projects will make a fair wage.

The ordinance, which will go into effect July 1, was passed at a city council meeting on a 6-3 vote, with Mayor Kate Gallego and councilmembers Betty Guardado, Laura Pastor, Kesha Hodge Washington, Kevin Robinson and Yassamin Ansari in favor.

A prevailing wage rate is described as the average income paid to similarly employed workers in a specific occupation in the area of intended employment, according to the U.S. Department of Labor.

The ordinance was previously passed by the City Council on March 22, 2023, by a 5-4 vote, but was repealed about four weeks later, after newly elected city council members took position.

It applies to all city-funded projects exceeding $4 million, but would exclude the 2023 GO Bond Program, which funds rehabilitation of parks, libraries, fire and police stations. It also would not apply to affordable housing projects in an effort to keep them affordable.

What do supporters of the prevailing wage ordinance say?

Mayor Kate Gallego called the passage of the ordinance “a win for working families” in the city.

“After months of hard work and a process that included stakeholder meetings with both labor unions and contractors, I am proud that we have advanced a policy that will benefit those who are building the Phoenix of the future,” Gallego said in a press release.

Councilmember Betty Guardado, District 5, said at the meeting that the advantages of the ordinance include fair pay and benefits, and safe working conditions.

“This not only guarantees a happier workforce, but also contributes to the growth and prosperity of our economy,” Guardado said.

“It should go without saying, but it is important to note that we will never be able to have meaningful conversations about affordable housing and ending homelessness, without recognizing the need, at the very least, to pay our employees a living wage.”

Who opposed passing the prevailing wage ordinance, and why?

On the other end, Councilmembers Jim Waring, Ann O’Brien and Debra Stark opposed the passage of the ordinance.

Councilwoman O’Brien said she is concerned the ordinances’ language will be deemed illegal and ultimately wants to avoid costly lawsuits, such as one threatened by the Arizona Chapter, Associated General Contractors in a statement released Monday.

The association claims the ordinance is a direct attack on contractors that want to remain non-union.

“On day one of any ordinances’ effective date or sooner, if appropriate, AZAGC will partner with companies and industry associations to challenge the legality of such exclusive practices,” President David Martin said in the statement. “Instead of battling these issues at the council level, we’ll take our arguments through the court system.”

Stark agreed with O’Brien, adding that it isn’t the first – and won’t be the last – lawsuit the city will see regarding the ordinance.

She also noted that although Attorney General Kris Mayes released an opinion on the matter in June, where she states the two can be harmonized, she doesn’t agree with her stance.

“I do believe we should pay a livable wage, and I had hoped that we would have looked at it through a minimum wage rather than a prevailing wage,” Stark said.

“I do agree with councilwoman O’Brien that although we have a very smart attorney general, I do disagree with her on this. I do think prevailing wage is different than minimum wage, and so I wish we had gone down a path of looking at minimum wage in our contract.”

Have other Arizona cities passed a prevailing wage?

On the same night Phoenix passed its prevailing wage, the city of Tucson unanimously passed it, as well.

“Prevailing wages have long served as a tool to uplift our communities, improve our local economy and protect all workers from being underpaid and taken advantage of,” Mayor Regina Romero said in a statement.

“This will have a positive impact for families, create a better quality of life for workers by providing economic stability, ensure stable and secure housing, and create opportunities for families to invest in their children’s education.”

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