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[..ivingWages $c Communities: Smarter Economic Development, LowerThan Expected Costs ■ In Hartford, a contract for security services, the first contract covered by the city's living wage law, increased by $160,392 or 30.5% from the year before." ■ Two of the 23 contracts covered by the Alexandria, VA living wage law increased by over 20%, with an average increase of 10.6%.�� • Similarly, Warren, MI reported a contract price increase of $61,848 or 22% from the previous year following the re-bidding of its janitorial contrac[.'� * Compliance with Berkeley's living wage law caused that city's security contract to increase from $55,000 to $ll4,000, doubling in price." These significant increases are not sur- prising given living wage laws' focus on increasing pay for workers at the bot- tom tii � the economic scale. One wtir�lti expect contracts for labor-intensive services such as security, groundskeep- ing and janitorial services to increase because such contracts usually employ a large low-wage workforce. � As Madison's comptroller stated, "[from a] city-wide view, the actual fiscal impact [of the living wage law] has been negligible." � The living wage laws in the above cities generally did not cover contracts for social services such as home healthcare or child care, which rypically involve large concentrations of low-wage workers. Human and social services contracts were not covered in many communities, either because such serv- ices tend to be provided by counties rather than cities, or because some of the earlier living wage laws exempted non-profit human services providers from coverage. However, three of the localities studied—Berkeley, CA, Dane Counry, WT, and San Francisco, CA— did have substantial contracting programs in the human services area that were covered by their living wage laws. Moreover, unlike most cities, these localities were able to provide more refined data show- ing the increase in contract costs as a percentage of the annual human services contracting budget rather than as a percentage of the overall municipal budget. We therefore list these increases as a per- centage of their human services budgets with the reminder that, as a percentage of the overall munic- ipal budget, these costs would be substantially smaller. In all three cities, the impact on the overall ciry budget was still manageable. But these figures indicate that cities planning to cover human services programs under their living wage laws should prepare for modest increases in their human services budgets to accommodate the higher labor costs. Human services contracts covered by living wage laws saw slightly larger average cost increases than did other categories of contracts: Table 2: Increases in H uman Services Contract Costs After Passage of Living Wage Laws, 2DD I I Locality I Budget for Human Cost Inc1'ease for InCt'ease �5 Z� of Human Services Contracts Human 5ervices Contracts Services Budget &erkelr�. C.� 3�,C99A0� # �A4C� � F� aano Cr�.�'I $G 13,"�OQC�]'� �.. �]38.pOG.�• �.3'.� 5�n Francls�u C!5 $.] 13,'..'BQOOd ' #].7i �.,7U0 � i.A I n