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t�.ivingWages & Communities: Smarter Economic Development. LowerThan Expected Costs � Berkeley, CA saw costs increase in its human services budget by $170,000 to meet its living wage requirement of $9.75 an hour. Dane County, WI increased its human services budget by $676,000 between 2001 and 2002 in order to raise the minimum wages of approximately 645 full-time human services personnel to $8.53 an �out,�} San Francisco increased its human services contracts by $3,714,000 in order meet its living wage requirement of $9.00 an .�ictii.r.�' Although these increases were among � the largest average increases reported by thelocalitiesreviewedinthisstudy,they Th@S@ @Xp@1"I@IlC@S SUgg@St tilat �OCa� still represent a modest proportion of these local governments' human Se��- governments that extend living wage es budgets. The largest proportional laws to non-profit human services increase occurred in Berkeley, CA, where the human services contracts programs can anticipate slightly totaling $6,098,578 increased by larger — but, overall, Stl�� C�UIt@ 2.79% as a result of the living wage law. In San Francisco, where the human modest — increases in the costs services contract budget is $312 mil- lion, the living wage resulted in a cost Of SUCiI C011tl"aCtS. increase of approximately 1%. The � increase in Dane County represents a 0.3% increase in the locality's current $ ll 2 million human services budget. These experiences suggest that local governments that extend living wage laws to non-profit human services programs can anticipate slightly larger—but, overall, still quite modest—increases in the costs of such contracts. In preparing for implementation of their living wage laws, several cities made budget impact projec- tions based on the assumption that contractors would pass through the entire cost of the increased wages to the ciry in the form of higher contract prices. However, all of the cities that did so reported to us that their projections substantially overestimated the actual impact that their living wage law had on local contracting costs. As shown in Table 3, actual cost increases ranged from 30% to 50% lower than projections. Table 3: Comparison of Cost Projections with Actual Increases in Contract Costs Locaiity City Budget Projected Increase Actual Increase Difference Al�x:•�A��s �3�� b3Z,]5"s �50{�.C+] ��5.4G@ iF v Nti�iki:lrx �i��i' S1fi,ir� Si?ry.'��} #�z�J.�4C• =2�.`� Cambridge $296,4G6,580 $300.00 50�00.000 -33�.-50% Pasadena $493,596,335 $340,000 $240,000 -30% Other reports from local governments suggest that many localities experienced smaller contract price increases than they anticipated: • In Dane County, an analysis of four contracts involving low-wagework that county staffhad projected would increase in cost revealed that only one did so (by 10.2%) from 2001 to 2002, while the other three contracts actually decreased in cost.��