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50 APPENDIX 5.' : ,SO <br /> According to Ken Dahms, janitorial contract buyer for the City of Baltimore, there has not <br /> been any decrease in bids outside of normal fluctuations in companies' bidding practices. It is <br /> perhaps worth noting that the two contracts whose labor costs for its lowest-wage workers had the <br /> highest rate of increase (55% — from $4.25 to $6.60 per hour) had an increase in the number of <br /> bidders, and the contract with the largest decline in bidders already pays workers more than the <br /> living wage. <br /> Surprisingly, contractors interviewed about the living wage gave generally positive <br /> responses. From bus companies to temporary agencies to janitorial services, the prevailing opinion <br /> offered was that the living wage "levels the playing field" and relieves pressure on employers to <br /> squeeze labor costs in order to win low-bid contracts. <br /> "We feel more able to compete against businesses who were drastically reducing wages <br /> in order to put in a low bid," said a manager of a bus company. In such cases, if more firms think <br /> they have a chance to win city service contracts, the number of bidders could actually increase <br /> over time as a result of the living wage hike. <br /> Others notice a marked change in worker morale and productivity brought about by the <br /> higher wage. "You get a better quality worker, which builds a better reputation for our company," <br /> said a human resources representative of a temporary agency. And according to another manager <br /> at a bus company, "workers seem.happy [and) they come to work on time because they know that <br /> at $6.10 per hour, somebody else wants the job if they don't." <br /> Baltimore's Business Climate <br /> The argument that businesses will leave a city as a result of the living wage ordinance is <br /> based primarily on a somewhat intangible mechanism - the idea that such ordinances create the <br /> perception that a locality is unfriendly to business, thus discouraging new or continued investment. <br /> The direct effects of such ordinances on wages, since they affect such a small proportion of the <br /> workforce, could not discourage investment by raising costs broadly in the local labor market. <br /> However, claims of indirect effects are asserted with great frequency, find receptive audiences in <br /> a time of intense state and local competition for investment, and therefore cannot be ignored. <br /> In the case of Baltimore, there is no evidence that local businesses or potential investors <br /> have responded negatively to the ordmaace. As noted above, even the city contractors interviewed <br /> for this study, who are directly affected, had no complaints about the ordinance. As for businesses <br /> in general, Table 3 shows the assessable base of personal property for businesses and corporations <br /> in the city of Baltimore, for the years 1990-95. This measures the value of local businesses' assets, <br /> other than real estate, for tax purposes. <br /> As shown in the Table, the value of business property declined in real terms in the four <br /> years preceding the passage of Baltimore City Ordinance 442. It then increased sharply from 1994 <br /> to 1995, after the passage of the ordinance."The experience of a single year since passage of the <br /> 1117he declines for 1991 and 1992 can be attributed to the national recession(though it is worth noting that <br /> real declines continued until the 4.6% real jump in 1995). <br /> 11 <br />