Small business job openings declined sharply in May while concerns over rising labor costs reached the highest level in the survey’s history, according to the National Federation of Independent Business (NFIB) May Jobs Report released Friday.
The NFIB Small Business Employment Index remained essentially flat in May, standing at 100.3 after 100.4 in April. This marks the third consecutive monthly decline. The index now sits below the 2025 average of 101.2, though it remains slightly above the long-term historical average of 100.
In May, 29% of small business owners reported job openings they could not fill, a 5-point drop from April and the lowest reading since May 2020. Openings for skilled workers fell 2 points to 27%, while openings for unskilled positions dropped 4 points to 9%.
“Concerns about rising labor costs increased significantly to the highest reading in the survey’s history,” stated Chief Economist Bill Dunkelberg. “Small business owners are facing mounting pressure to retain workers, and many firms are navigating costly new state mandates. While current conditions restrict Main Street’s already-thin profit margins, compensation measures remain steady for now.”
Arizona-specific concerns added to the unease. “Arizona small businesses are growing increasingly uneasy as labor costs climb and uncertainty around state tax policy remains unresolved,” NFIB State Director Chad Heinrich added. “Failure to conform with the business provisions Congress made permanent at the federal level will result in a tax hike on Main Street Arizonans. Small businesses need certainty to plan, invest, and create jobs, and time is running short for lawmakers to deliver.”
Looking ahead, hiring plans weakened further. A seasonally adjusted net 9% of owners plan to create new jobs in the next three months, down 4 points from April and the lowest level since May 2020. This falls below the historical average of a net 11%.
Overall, 55% of owners reported hiring or trying to hire in May, up slightly from April. However, 46% of all owners (representing 84% of those actively hiring or trying to hire) reported few or no qualified applicants for open positions.
Labor quality, the most important business problem eased to 13%, the lowest since December 2016. In contrast, labor costs surged in importance, cited by 14% of owners as their top problem — a 5 point increase from April and the highest reading on record.
Despite softening demand for new hires, compensation pressures persisted. A net 31% of owners reported rising worker compensation in May, up 1 point from April. Plans to raise compensation in the coming three months held steady at 18%.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
The Arizona Supreme Court has agreed to take on a case determining whether Arizona State University (ASU) can mandate diversity, equity, and inclusion (DEI) trainings for its employees.
Professor Owen Anderson sued the Arizona Board of Regents in 2024 after ASU required him to take a DEI training called “Inclusive Communities” (ASU referred to their version of DEI as “DEIB,” or “diversity, equity, inclusion, and belonging”).
ASU requires the Inclusive Communities training as a condition of employment upon hire and every two years.
The Goldwater Institute, a Phoenix-based public policy and litigation organization, filed on Anderson’s behalf. Goldwater Institute attorney Stacy Skankey said the case represented Arizonans’ right to hold government agencies accountable for violating the law.
Arizona law prohibits any mandatory trainings which impart “blame or judgment on the basis of race, ethnicity or sex.”
“No one should be forced to participate in divisive DEI training or endorse race-based ideology as a condition for holding a government job,” said Skankey. “That’s exactly why Arizona lawmakers banned mandatory trainings that teach discriminatory ideas about race, ethnicity, or sex. But a law without enforcement is no law at all.”
The Inclusive Communities training included materials which taught that white supremacy exists as a structural phenomenon, minority faculty don’t have authority or control due to structural inequalities like racism and sexism, white privilege and white fragility exist and impact communities, white people have a duty to combat their privilege, racism can be implicit even if not intended, and sexual identities yield power.
Transcript examples from the training materials were included in the Goldwater Institute’s filing within the Arizona Supreme Court.
Along with the training, ASU formerly required employees to pass an accompanying module quiz. This exam graded certain answers as correct which served to advance DEIB ideology; the Goldwater Institute argued this final test further proved the training served as an impermissible mandate for employees to accept blame or judgment on the basis of race, ethnicity, and sex.
Anderson said ASU’s mandate violated state law because the training assigned “race blame” based on skin color.
Anderson added that ASU’s training was rooted in a Marxist dichotomy reducing the world to oppressor versus oppressed, and that the training imparted impermissibly discriminatory teachings that conflicted with his religious and political beliefs. Anderson is a tenured faculty member who teaches philosophy and religious studies.
“Arizona State leaders broke the law when they forced me and every other employee to take part in an ideological training that taught that it’s okay to judge people on their race, ethnicity, religion, and sex. I simply refuse to do that,” said Anderson. “Ultimately, the question before the Arizona Supreme Court isn’t a left or right issue — it’s about whether a state employee has the right to hold their employer accountable when it violates the law.”
The Arizona Court of Appeals previously rejected Anderson’s lawsuit. The court ruled that the law doesn’t have a provision allowing individuals like Anderson to seek legal recourse.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
Arizona public schools would be required to allow students to attend off-campus religious instruction during the school day with parental consent under a Republican-backed bill approved by the Legislature and sent to Gov. Katie Hobbs.
The Arizona Released Time Education Act, SB 1741, sponsored by Senate President Warren Petersen (R-LD14), would require school district governing boards and charter school governing bodies to allow students to attend released time courses during regular school hours if the program meets statutory requirements. The measure was transmitted to the governor on June 10.
Under the bill, schools would be required to allow students to participate in released time courses if the school receives written consent from the student’s parent. Course providers would be required to keep attendance records, provide copies of those records to the school, assume legal responsibility for students while they are under the provider’s control, and provide religious instruction for at least one hour and no more than five hours per week.
🚨FOR IMMEDIATE RELEASE: Legislature Approves President Petersen-Backed Bill Expanding Parental Rights in Education
The legislation requires released time course providers, participating students, or parents to provide any necessary transportation. Students would remain responsible for completing any other schoolwork missed while attending the released-time course.
“Parents have the fundamental right to direct the upbringing and education of their children, including their religious education,” Petersen said. “For generations, families have taught faith and values at home and in their communities. This legislation simply ensures government does not stand in the way when parents choose to incorporate religious instruction into their child’s education.”
The bill would require schools to award academic credit to students who successfully complete a released time course. School districts and charter schools would determine how much credit to award using only secular criteria that are substantially similar to those used to evaluate comparable courses, including classroom instructional time, course requirements, instructional materials, and student assessments.
The measure also provides that time spent in a released time course during regular school hours would count as instructional time and instructional hours for purposes of state requirements, average daily membership, and daily attendance calculations.
Released time courses could not be provided on school property, and school districts and charter schools could not incur expenses to provide the courses. The bill also states that schools may not deny released-time course providers equal access to money, benefits, or services that schools provide to other community groups or independent entities.
Arizona law already recognizes parents’ right to have a child excused from school attendance for religious purposes under A.R.S. 15-102. SB 1741 would add new requirements governing released-time courses for school districts and charter schools.
The bill also creates a private cause of action allowing a person adversely affected by a violation to seek injunctive relief, monetary damages, court costs, attorney fees, and other relief available under law against the school district or charter school.
Petersen said the legislation is intended to strengthen parental choice while preserving safeguards around school costs and student responsibility.
“SB 1741 respects religious liberty, strengthens parental choice, and recognizes that parents, not bureaucrats, are best positioned to decide what is right for their children,” Petersen said.
The bill passed the Senate on Feb. 25 by a 16-10 vote and passed the House on June 9 by a 31-24 vote.
The proposal drew opposition from Democrats and secular advocacy groups during the legislative process. Rep. Nancy Gutierrez (D-LD18) argued during House debate that off-campus religious instruction would take away from instructional time, while Rep. Matt Gress (R-LD4) said the bill would be voluntary and require parental approval.
Arizona is on track to become one of the first states in the nation to modernize workplace radiation safety standards for health care professionals after lawmakers approved legislation aimed at reducing long-term health risks associated with occupational radiation exposure.
Senate Bill 1121, sponsored by Senator Carine Werner (R-LD4), passed the Arizona Legislature this week, and now awaits action by Governor Katie Hobbs.
The measure would allow hospitals equipped with advanced radiation protection systems to utilize those technologies in place of requiring medical personnel to wear traditional lead aprons during certain procedures involving real-time X-ray imaging.
The legislation primarily applies to physicians, nurses, physician assistants and other health care professionals working in cardiac catheterization laboratories and procedure rooms where ionizing radiation is routinely used.
Current radiation safety protocols often require medical personnel to wear lead aprons weighing more than 15 pounds during procedures. Studies have linked long-term occupational radiation exposure to increased risks of cancer, cataracts, thyroid disorders, reproductive complications, and other health concerns. Additionally, years of wearing heavy protective equipment have been associated with chronic neck, back, and orthopedic injuries.
“Medical professionals should not have to choose between protecting their patients and protecting their own health,” stated Senator Werner. “The technology exists today to shield workers from radiation exposure more effectively while reducing the physical strain caused by wearing heavy lead aprons for hours at a time. This bill allows hospitals to use those advancements while maintaining strict safety standards and real-time monitoring.”
Under SB 1121, hospitals performing cardiac catheterization procedures may not require health care workers to wear lead aprons if the procedure room is equipped with a qualifying radiation protection system that is being used according to manufacturer specifications. The bill defines radiation protection system as shielding technology that provides protections equal to or greater than the effectiveness of a 0.25-millimeter lead-equivalent apron.
The legislation also includes safeguards to ensure continued monitoring of radiation exposure. Health care professionals who choose not to wear lead aprons while using approved radiation protection systems would be required to wear real-time dosimeters capable of continuously monitoring radiation exposure during procedures.
Hospitals would retain the authority to require lead aprons, thyroid collars, or other protective equipment if a radiation safety officer determines that staff exposure levels could approach occupational dose thresholds or elevated exposure levels under the “As Low As Reasonably Achievable” (ALARA) standard.
The bill also preserves the right of individual health care workers to voluntarily wear lead aprons regardless of whether a radiation protection system is in use.
“This is a commonsense modernization of workplace safety standards,” said Werner. “When we have proven technology that can better protect the people performing these procedures every day, we should be embracing it. Arizona’s doctors, nurses, and medical staff deserve the safest working environment possible so they can continue providing exceptional care to patients across our state.”
If signed into law, Arizona would join a small number of states recognizing emerging radiation protection technologies as an alternative to traditional lead-apron requirements in certain medical settings.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
The Arizona Department of Water Resources (ADWR) exceeded its authority under state law, the Maricopa County Superior Court ruled Monday.
The court determined in an under advisement ruling in this ongoing case that, again, ADWR lacked authority under state law to impose a new obligation on home developers to secure additional water supply.
The Home Builders Association of Central Arizona and Arizona Senate President Warren Petersen (R-LD14) have challenged this and other ADWR policies initiated at the behest of Gov. Katie Hobbs.
Maricopa County Superior Court Judge Scott Blaney said this additional requirement by ADWR went beyond what state law required. Per Blaney, the law only requires developers to show 100 years of continuous availability of water sufficient to satisfy water needs for the use proposed by the developer.
State law limited ADWR to two pathways: either developers could obtain a certificate of assured water supply from ADWR or they could obtain a commitment of service from a municipal provider such as a city, town, or private company with an ADWR assurance of water supply designation.
However, under a new rule pushed by the Hobbs administration, R12-15-710(H), ADWR limited developers to a third, new pathway for assured water supply designation. This pathway involved a newly created category of water availability ADWR called “New Alternative Water Supplies,” and required developers to secure an additional 25% of this new category beyond their proposed usage needs.
The ADWR changes under Hobbs resulted in what effectively became a housing moratorium. New building progress in the Valley ground to a halt.
Blaney ruled ADWR lacked the authority to create this third, new pathway. He declared that the plain language of the statute only requires a 100-year guarantee of water needs satisfaction.
“The Legislature created two paths to establish an assured water supply to develop a subdivision: obtain a certificate; or obtain a designation,” said Blaney. “Through the implementation of its moratorium and its nearly simultaneous promulgation of a rule that demands more water than the statute requires, ADWR has in effect attempted to rewrite the governing statute at the agency level.”
Blaney also rejected ADWR’s argument that this third pathway was a voluntary, alternative path out of several for developers. He sided with the developer’s assessment that ADWR had unlawfully restricted developers to a single pathway.
The court ruling on Monday blocked ADWR from enforcing the rule.
In April, the Maricopa County Superior Court struck down ADWR’s housing moratorium articulated in several rules pertaining to unmet water demand and depth-to-water limits.
Similar to this most recent ruling, Blaney found that ADWR sought to break necessary limitations on administrative agency powers and had unlawfully implemented two agency rules without following the Administrative Procedures Act.
AZ Free Newsreported last month that the ADWR-spurred housing moratorium may put taxpayers on the hook for more than $1 billion, due to ongoing and potential future builder compensation claims.
ADWR plans to appeal pending the final ruling.
When Hobbs took office, she formed a Water Policy Council to overhaul the state’s approach to groundwater management. Two committees were formed, one of which addressed assured water supply.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
A new survey of likely Arizona Republican primary voters shows Arizona Senate President Warren Petersen (R-LD14) with a lead over Rodney Glassman in the race for the Republican nomination for attorney general.
According to the poll, conducted by Stealth Analytics, Petersen leads Glassman 35% to 19% while 46% of respondents remain undecided. The poll surveyed 816 likely GOP primary voters from June 2-4 and reported a margin of error of plus or minus 3.4 percentage points.
AZGOP Attorney General Primary
Petersen leads Glassman 35 to 19, with just under half of likely primary voters still undecided.
The findings suggest that while Petersen currently holds a significant advantage, a large portion of the Republican electorate has yet to settle on a candidate ahead of the July primary.
The survey also found Petersen with a stronger favorability rating among Republican voters. According to the poll, 46% of respondents viewed Petersen favorably compared to 12% unfavorably, while Glassman recorded a 38% favorable rating and a 22% unfavorable rating.
According to Stealth Analytics, Republican voters ranked illegal immigration (24%), election integrity (23%), water supply concerns (20%), and border security (14%) as the top priorities for Arizona’s next attorney general.
The survey also measured the potential influence of President Donald Trump on the race. According to the results, 67% of likely Republican primary voters said a Trump endorsement would make them more likely to support a candidate, while 20% said it would have no impact and 13% said it would make them less likely to support that candidate.
The poll comes as Republican voters prepare to choose a nominee in one of Arizona’s most closely watched contests.
The two candidates recently participated in a debate sponsored by the Arizona Citizens Clean Elections Commission. During the debate, Petersen highlighted issues including public safety, election integrity, and enforcement of Arizona law, while Glassman emphasized his legal experience and criticized incumbent Attorney General Kris Mayes’ handling of the office.
The winner of the Republican primary will advance to the November general election, where Democrat incumbent Attorney General Kris Mayes is seeking another term.
The full Stealth Analytics survey can be viewed here.
