The City of Phoenix passed a prevailing wage rule last month that requires construction companies working on City projects of $250K or more to pay employees wages comparable to regional skilled labor wages.
The rule was added to the City Council agenda one day before the March 22 vote and was amended during the meeting before it passed on a 5-4 margin.
Both the Phoenix Chamber of Commerce and the Goldwater Institute have come out against the new rule and urged its repeal.
Phoenix Mayor Kate Gallego opposed the measure and voted against it. A Gallego spokesperson said Council will discuss the issue in an executive session.
Supporters of the rule on Council defended it as a way to fight homelessness and poverty. They say it will attract skilled workers and put Phoenix projects in line with federal projects that already require paying the prevailing wage.
City Manager Jeff Barton has estimated the rule could increase construction project costs by as much as $93M, but no formal analysis has been completed. The ordinance has also not been reviewed by the City’s legal department.
The Goldwater Institute sent a letter earlier this month citing a state law prohibiting municipalities from enacting prevailing wage ordinances. Both the Goldwater Institute and City Attorney Julie Kriegh have warned there is a significant risk of litigation if the ordinance is allowed to stand.
Tempe City Council, meanwhile, will vote on its own prevailing wage ordinance in May. (Source)