Disney World Union Wage Negotiations
Last week, Walt Disney World made an offer to Cast Member unions representing over 35,000 employees that would get them to a $15 hourly wage…by 2021. Disney’s latest proposal would increase wages by $2 per hour in the 6 months after approval, then to $13/hour in September 2019, $14/hour in October 2020, and $15/hour in October 2021.
Under this offer, Disney would also distribute the $1,000 bonus it had previously denied to union employees. In exchange, unionized Cast Members would have to agree to a number of concessions, including several reducing their ability to receive overtime pay, plus transfer procedures, grievance and disciplinary protocol, and scheduling policies.
Some union leaders called this proposal “dead on arrival” as it undid protections that union workers have bargained-for over the course of the last 40 years. This offer follows a year of tense negotiations between Cast Member unions and Disney, and is (perhaps?) a sign that the chasm between the two sides is finally starting to be bridged.
In this post, we’ll editorialize a bit, wading into the controversial waters of this ongoing dispute between the Walt Disney Company and its Cast Members…
This has been a topic of discussion on social media for a while, and also one that has recently popped up in the comments section here a few times. I’ve been surprised at the number of people who are averse to Walt Disney World increasing Cast Member wages.
From what I can surmise, the biggest opposition is a result of guests not wanting to bear the costs of these increased wages. While it’s certainly possible that Disney would try to pass on some of those costs to consumers, it’s erroneous to assume that Disney prices are predicated upon its costs.
This is demonstrably false. Disney charges what the market will bear, increasing prices on an annual basis not at the rate of inflation or because its costs are increasing at a commensurate level, but because they can. Walt Disney World is an extremely savvy and sophisticated business–they are going to maximize profits to the greatest degree economically feasible. It’s not as if they are “holding back” and prices will really skyrocket if Cast Member wages go up. If Disney could further skyrocket prices, that will happen irrespective of Cast Member wages.
Others oppose higher wages from the oddly ideological perspective that Cast Members all work entry level jobs meant for high schoolers, and thus they don’t deserve more money. That’s an interesting position given that Walt Disney World is the largest single-site employer in the United States, and given that the service and tourism sectors dominate Central Florida.
Unless the region is inhabited almost exclusively by high schoolers, there are necessarily adults working frontline positions at Walt Disney World. The notion that minimum wage jobs are stepping stone positions overlooks the reality that these jobs have to be filled by someone–and not just students. (Nationwide, only 12% of minimum wage jobs are filled by workers 19 years old or younger.)
While we anticipate this being a controversial topic, it really doesn’t need to be one. Even if you’re against the concept of a living wage or are otherwise averse to wage increases for some reason, you should be in favor of this…out of selfishness.
Increasing wages means Walt Disney World can attract and retain friendly and helpful Cast Members who will in turn improve the quality of your vacation. Cast Members breathe life into Walt Disney World, and they have long been the defining element of the guest experience. (“You can design and create, and build the most wonderful place in the world. But it takes people to make the dream a reality.”)
We have been fortunate to have wonderful Cast Member interactions and encounters over the years, and I absolutely want more passionate Cast Members who are proud of the work they do, the company they do it for, and strive to make magical moments for guests. We all win if Cast Members are treated well and feel valued.
(Personally, I cringe every time someone refers to frontline Cast Members as ‘low skill’ jobs. I’ve seen Cast Members keep their cool as irate guests berate them for attractions being down, long wait times, and other inconveniences wholly outside their control. The ability to be restrained and helpful in these situations is most certainly a valuable skill–and one I don’t possess.)
Some Cast Member positions at Walt Disney World, most notably housekeeping, have been understaffed for a while, forcing Walt Disney World to operate shorthanded. Walt Disney World is already offering over $1,000 sign-up bonuses (or more, for some positions) to fill 3,500+ positions right now. Unsurprisingly, these one-time bonuses have been ineffective at filling the Cast Member shortage with other Orlando-area employers offering higher wages.
With this offer, we wonder to what extent Disney realizes wage increases the writing is on the wall for higher wages. At some point, increasing wages will be a strict necessity to attract more workers in the next few years. With several new hotels, theme park attractions & lands, restaurants, and more opening between now and 2021, Walt Disney World is going to create thousands of new positions via expansion.
Given that Walt Disney World isn’t the only theme park complex in Central Florida that is currently in expansion mode, they will have to compete in an already tight labor market for a limited supply of workers. Maybe Walt Disney World wouldn’t hit $15/hour by 2021 out of necessity, but there’s no way $10/hour would cut as they seek to fill new roles while competing with other local employers.
Even if there is a slightly accelerated rate of automation spurred by the wage increases (some amount of automation is happening regardless), the impact of that automation is pretty much a moot point given the currently-unfilled positions and jobs that will be created in the next several years.
Offering a guarantee of wage increases today that might be necessary by 2021 gives Disney the chance to at least extract some concessions out of union workers. It seems to us that the approach here is to lead with straightforward wage growth that is tangible and easy to understand, and behind that place the costs, which are nebulous and difficult to quantity.
The elimination of some types of overtime is certainly quantifiable by those who are paid it in some circumstances now but wouldn’t receive the added pay going forward, but precise numbers are not readily ascertainable and consistent among workers. For some, this would be a huge concession; for others, it would be no loss at all.
In reviewing the other trade-offs, it appears that the underlying impetus for almost every single move is to weaken the union and the protections it can offer members. The company has regularly tried to use the carrot of monetary incentives–knowing most of its workers are living paycheck to paycheck and need that money–to leverage concessions out of workers. For once, the workers have the position of strength, and Disney is not used to negotiating from such a position.
Ultimately, we think it’s good to see Disney finally come to the table with an offer that’s fair in terms of wages. Frankly, we’re surprised that it’s taken so long. The national headlines made earlier this year in Los Angeles Times and New York Times articles about employees of Disney’s theme parks who live in poverty didn’t exactly paint the “family-friendly” company in the best light. Making a splashy announcement about Disney’s commitment to its Cast Members and increasing their wages would earn the company some goodwill. From our view, it would also be the right thing to do, and would make us feel a bit better (even if we know they’re unrelated) about the nonstop barrage of up-charges and price increases at Walt Disney World.
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Any thoughts to add about Cast Member wages at Walt Disney World? Any questions we can help you answer? Hearing feedback about your experiences is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!
I Va. there are 2 theme parks. They are not part of a union. The workers work 65 to 80 hours a week and are NOT able to be paid overtime. The jobs are considered seasonal so federal overtime protection dose not apply.
I love Disney and look forward to each Disney visit, but knowing how little the people who make the magic happen earn takes away from the experience. We all want that special feeling we get from the cast members and should be willing to pay for it. These are not unskilled workers but rather highly Disney-trained employees. The cost of living in Florida is greater than that in many parts of the country, and cast members have to feed and clothe and shelter their families just like the rest of us. Disney stocks do well. Those at the top of the Disney employment pyramid do very well. Neither would be possible without the many employees supporting the base of that pyramid. Disney is offering a wage which is sure to still be low by the year 2021 IF the employees are willing to give up overtime pay. Since Disney has not proven itself to be the most caring of employers, it is difficult to trust that these same employees will not be worked 60 or more hours a week without additional compensation, especially as that $15.00 an hour is sure to still be one of the lowest wages in the area, and Disney is sure to be suffering from shortages of capable workers. If you wish to run a business, you should be willing to pay your own people who make your business work.
Pat – While I can’t profess to knowing all the details of Disney’s negotiations, I must point out that Disney can not legally not pay for overtime as defined in the statutes. I suspect that what Tom is referring to is some work rule changes that result in employees only being compensated at their regular rate, not a negotiated premium for certain work situations. For example, there is no legal requirement to pay a shift premium. Most companies do it, but it is negotiated, not required. Rest assured that someone that works 60 hours, to use your example, will be paid overtime.
Disney needs to pay a fair wage. The CEO makes millions yearly, as does the corporation. Disney would be nothing without their wonderful employees that take a lot of crap from the public. The cost of living is too high for those low wages. Especially with the new tax cuts….Disney should be ashamed. Lord knows they can afford it. The raise prices every year or add new costs
I especially like your point about Disney charging what the market will bear rather than basing prices upon their actual costs. Since they charge a premium price, they certainly should be paying their employees a premium wage. Since the employees affected by this are the very face of Disney to most visitors, it would be a good investment for Disney in the long run.
I agree the wage increase should be implemented ASAP. The reasons for it are clear and it makes Disney look greedy and miserly while sitting on their mountain of profits. I would like to think they do the right thing for their wonderful employees.
Why on Earth are they not already making $15 per hour? Disney can certainly afford it!
Cast members helped make some of our best moments at Disney. They deserve a living wage, and I can’t believe Disney has to be coerced into doing it. I still love you, Disney, but I don’t love this action, and I’m betting many people feel the same. Greed won’t win you any supporters. Buck up, and do the right thing.
Thank you so much for this article. We love Disney – especially Walt Disney World – but would never think of them as being anything but a business. Yes, the workers need to be paid more – their workers are the key behind many “pixie dust” moments and memories. They could give everyone – including union workers -what they demand and still make a huge profit. Again, we love visiting the Parks, but understand the business behind them, and sometimes it’s not pretty. I hope the overall guest experience does not suffer due to management greed.
I recently did some research on what Disney paid. I have noticed on previous visits, I would say in the past few years, that customer service previously described as “Grade A”, was now a “B” and sometimes a “B-“. I had the feeling that was because of wages. Like many others, I have noticed the extreme gap in levels of compensation in many big companies. And I understand that the world is not a fair place. But when your CEO makes over 30 million dollars, why would you begrudge a front line worker a living wage? What makes Disney wonderful is what we associate it with in our minds. Our fond memories of watching The Wonderful World of Disney on our black and white TV’s, our trips to the drive-in with our pillows and blankets to watch “The computer that wore tennis shoes”. A tradition passed on to our children, our grandchildren. Wonderful memories in my mind.
Minds can change.
Treat your employees fairly.
Thanks for opening up the can, Tom. Predictably, the comments section has turned into a pro-union/anti-union discussion. This is a microcosm of where we are in society regarding wealth distribution. The arguments are exactly the same as they have been for years; the “humanity” of union workers vs. the “system” and the “market” being used to justify their wages and conditions.
Have we considered that the main reason there is such a divide is because one side has never experienced the other’s reality? How many of the “unions should be abolished” posters have ever had to live paycheck-to-paycheck and never had an opportunity (for social or financial reasons) to “better” themselves? How many of the low-skill employees understand how labor figures into a company’s bottom line and have had to wade through needless red tape with stubborn union representatives while work remains undone? What is the other side’s reality? At some point, we have to reach across the aisle and at least listen to the other side’s concerns.
I actually feared that the comments section would be far worse than this, which is one of the reasons I’ve refrained from covering this topic (despite it being an ongoing issue for about a year now) in the past.
It’s a politically-charged topic; there’s no way around that. It also involves a lot of untested and untestable economic theory about which people nevertheless have staunch (and typically, polarized) opinions. Law & economics was an academic focus of mine, and one of my takeaways from those courses was that clean analysis of theoretical frameworks is impossible, since the real world is neither theoretical nor clean. (And, of course, there’s humanity, which tends to be glossed over.)
In general, I agree with you that people should try harder to empathize more with others’ circumstances. Even when people do, they tend to assume a rosy best-case scenario, instead of one based on reality. I think if more people were to approach these topics with an assumed veil of ignorance, people would be able to achieve that empathy much easier.
I don’t believe anyone said “unions should be abolished”? I am dead in the middle of what is considered middle class. I am not anti union as long as it is private sector. Those companies and employees can live or die by their financial decisions. I am steadfast against unions in the public sector because politicians use the taxpayers as a bottomless pit to keep funding these unsustainable obligations and many public pensions have special protections that do not exist in the private sector.
As far as Disney goes, they are private sector and can do what they wish. The market will determine if their path forward is the correct one or not. I wish all parties involved well and hopefully both sides get a little of what they want in the end deal.
I certainly have (& I think most people do), a different set of expectations from Disney than I do when visiting Six Flags. Part of what makes Disney special is their attention to detail, right down to sweeping rain water away. In order to get the experience that everyone desires, you have to be prepared to pay more money for it.
You don’t go to McDonald’s having the expectation that you’re about to receive five star treatment as if you’re going to Ruth Chris. The same applies to Disney.
I am a CM and work part-time at WDW. I do not work there for the wages but for the opportunity to provide magical experiences for guests. Many of my fellow part-time cast members do so as well. I have a doctorate so I make a lot more money teaching than I do at WDW. That said, I am in favor of higher wages for CMs. Many of the FT workers in my department are college graduates who work 50-60 hours a week and depend on the OT just to pay the rent (which has skyrocketed around Disney since the end of the recession in 2012). They are the ones who would be hurt the most by the concessions Disney is demanding in exchange for the $15/hr guarantee. Also, due to the employee shortage in many departments, CMs are assigned ‘mandatory overtime’ shifts, which means many of them end up working seven days a week.
Lastly, it is incorrect to assume that labor costs are not part of the calculation of price increases. Labor costs are often the most major cost a company has and typically the first one it attempts to cut. Elimination of the OT pay would offset much of the wage increase because even CMs making $10 an hour actually average more than that with OT calculated. Many FT CMs are averaging $13 or more but only if they work 50-60 hours a week. It would be nice for them to earn that in a standard workweek like the rest of the country.
Thanks for passing along your and your coworkers’ experiences with OT. I suspected some of that, but very few of the Cast Members I know actually work much OT.
“Lastly, it is incorrect to assume that labor costs are not part of the calculation of price increases. Labor costs are often the most major cost a company has and typically the first one it attempts to cut.”
My assumption is based on the reality that Disney’s prices (currently) are in no way predicated upon their costs, but upon their equilibrium price. If they could raise prices now and still sell the same number of park tickets, hotel rooms, etc…they would. Increased labor costs will certainly cut into margins, and Disney will no doubt try to find ways to avoid that impacting their bottom line, but it’s not a simple matter of just increasing prices.
If it were that simple–and prices could be increased without impacting demand–Disney would increase prices to the maximum extent possible today.
Thank you for weighing in. Two of my adult children work for Disney in Orlando. My son is “in entertainment,” my daughter is in costuming. Both have Bachelor’s degrees and are highly trained in their field of work. My son is full time, has very specialized training, and works 6-7 days a week because they are always short for his specific roles. Yet, he makes less than $12/hour. My daughter makes less than he does, but she works seasonally (by choice) at both Disney and Universal, and she is currently looking for a third job which hopefully will offer health benefits.
This is the reality of Disney cast members. Ticket prices and resort stays continue to increase to an obscene level, but cast members are paid the same as teenagers working at fast food restaurants — even with specialized training and years of experience.
Neither of their jobs are “starter” jobs for high schoolers just starting out. They are trained professionals and both have substantial experience elsewhere from before their move to work for The Mouse.
They love making magic for families, but that magic comes at a price.
I have no idea what Disney can afford to pay their cast members, but a minimum of $20 an hour starting tomorrow would be nice. I’d rather see people competing to get open positions instead of thousands of cast member openings unfilled because so few people want to work for such a low wage. Disney had $9 billion in net operating income in 2017. It’s to their detriment if they don’t invest some of that in taking care of their front line cast members.
I have worked for both union and non-union organizations,that is like comparing apples and oranges.they both have their pros and cons.I would rather work for a union shop if i had a choice.
This has become quite the political discussion. It seems to me that, in a country where the gap between rich and poor grows larger every year, unions are one of the few things that allow people on the lower end of the economic spectrum to get a slightly better quality of life. I hope the union gets Disney employees more money and better benefits. It would make me feel better about my numerous visits there.
I’m actually surprised that Disney doesn’t already pay $15 an hour or better because of the cost of living in Orlando. I remember back in my college days (early 90’s) that the resort towns of Colorado were charging $20 for an adult meal at McDonalds and their employees were making $9 an hour… that’s over twice the minimum wage at that time. I had assumed that Disney likely did the same (or would have to given the Universal competition).
All that aside, Disney should consider some kind of housing deal as a sign on bonus… for example, Disney could build an apartment or trailer type neighborhood on their property and offer a much reduced rent guarantee for the duration of an employee’s employment. Include electric, water trash, etc. That would ensure their wages are a “living wage”. Part of the issue of people not accepting the sign on bonus is the fact that they live too far away and perhaps haven’t the transportation… or the moving costs to live close enough to use public transportation. I’m sure it’s a more difficult process than this simple idea, but if anyone could do this, Disney could. Universities do this for desired professors and sometimes staff, so why not?
In a large way, Disney is already doing exactly what you’re describing with the College Program. Disney is currently building more CP housing, and the itent is presumably to expand the program.
I don’t mention the CP here since it’s another (huge) can of worms, but I view it very much as a mixed bag. It offers some undeniable positives (both to guests and Disney), and has plenty of problems, too.
The market should drive salaries. If Disney cast members are underpaid, work performance, turnover, vacancies would all rear their heads. If they cannot find people to fill positions that perform to their standards at the current pay rate, then the market has determined that it is time to offer more money and better benefits to attract and retain better employees. If the current workforce is relatively stable and performs to expectations, then the market has determined that the current salary and benefits is appropriate. Wages should not be determined by public opinion, unions, or heartstrings.
Work performance, turnover, and vacancies have reared their heads… the College Program artificially hides these issues but as mentioned in the article Disney is having to offer signing bonuses and people still aren’t taking them.
Yep. I’m a professional with a doctorate, but in a field that relies on disposable income. We make what the market will bear and no more. Should I make more for my skill set and huge school loans? Heck yes! But that’s not how it works and we all know that going in. (And many clients chastise us that we charge too much already!)
Given that most (all?) professions have associations that accredit schools and constrain the supply of professionals in that field, even the amount you make is not simply ‘what the market will bear and no more.’
It’s one thing to favor a laissez faire system in the abstract, but I don’t think we should pretend that’s the system we actually have at present.
Totally agree. Very well said.
Disney would like to appear as the good guys, but they want to do away with holiday and overtime pay as part of the contract! And, how many millions do they pay their salary people?
There’s a reason those jobs are called unskilled. They don’t require education or training as the entrance qualification to get the job. This doesn’t mean these workers might deserve higher wages, but Disney experience don’t often translate to other competitors. Asking Disney to break the norms of hiring and paying will get them a different business, while they also undermine their professional staffs by outsourcing. There’s no job security. Disney’s offer of higher wages will destabilize their workforce. Expect Disney to offer higher entrance pay to college educated applicants. Those with a mere high school education will get sidelined. This already happened at Starbucks.
Not all Cast is paid the same across the board, are they?
I would expect show performers to be top scale, while ticket taker would be bottom, or something to that effect. Are we talking about general park staff, cashiers, front desk, ect., or everyone in general? Housekeeping deserves more than $15 hr.
Cast Members in Entertainment (performers) are paid a bit higher than some other roles, and certain performers receive “premiums” for different kinds of work, like being a face performer, doing stunt work, or being a part of a show. If you have a specified singing or speaking role (think the Beauty and the Beast Show, Festival of the Lion King, etc.), you are usually under an Equity contract that pays substantially more.
Extremely well written Tom.
In an ideal world, unions shouldn’t have to exist because the companies would do what is right for not just customers but employees as well. Back in the real world, that has never been true, and runs counter to the goal of a business (max profits). Unions are necessary to prevent exploitation of labor.
I’m glad Disney recognizes the importance of paying more to retain top talent. And as you said, regardless of how some people view the frontline cast members, that takes a different skill set to excel at, and isn’t low skill. I just hope Disney doesn’t use a higher wage to take other benefits away from workers
“I just hope Disney doesn’t use a higher wage to take other benefits away from workers.”
If you’re talking about things like main entrance admission passes or guest sign-ins, I think that’s going to happen regardless of inceases in pay. If attendance increases substantially with Star Wars: Galaxy’s Edge (and other additions), there will be an opportunity cost for Disney to offer the same degree of free admission, and I don’t see that continuing without an increased amount of blockouts and exclusions.
As a non-Orlando Disney Cast Member visiting this summer, my Main Gate is blacked at at Hollywood Studios from Toy Story Land opening until at least the end of August. (September hasn’t been announced yet.) It is also blacked out at Animal Kingdom on Sat/Sun throughout the summer, and Disneyland (not applicable, but worth noting) on weekends as well. In other words, this is already taking somewhat of an affect. They blocked out Animal Kingdom all of last summer as well, if I remember correctly.
Having run companies with unions for over twenty years, I can tell you that employee welfare and unions parted ways many years ago. Current rules and regulations make all of the beneficial changes that unions helped bring about early in the last century a requirement, so unions have been reduced to self-serving political action groups (see AFSCME if you doubt me). That said, I think Disney recognizes the economic reality that they need to pay cast members enough to attract people who will give guests an experience that is worth the high price they charge. I suspect that Tom’s comments regarding the need to raise wages are pretty accurate and I would point out that it is not surprising that they would seek concessions in return. Flexibility with your workforce is one of the biggest things you lose with a union. I suspect that the changes Disney is seeking have more to do with effectively staffing the parks than they do with reducing someone’s wages. One final comment, even if they were so inclined, the $1,000 bonus is, by law, bargain-able. Disney is required to negotiate the terms, timing, etc. with the union, so they are not being hard-hearted, simply following the law.
Reading Tom’s blog on this issue led me to reach the same conclusion. Disney is having a hard time staffing all of its positions. They know this, and they also know that market forces suggest that they have to raise their wages to competitive levels. If there were no union, Disney would have probably already raised their introductory staff wages. However, the Disney corporation is going to use the Union to get other concessions. The workers will get their minimum wage increase, but they will also lose out on something else in this negotiation process. This is a case where probably having a union involve will net hurt the workers. Those wages were going to go up regardless.
And this whole thing is why Unions should be abolished. Of course these people deserve a higher wage. I can’t say enough good things about every staff member I have ever met at WDW. They are polite, helpful, delightful and give the impression that you are the first person they have helped that day, when of course they have helped many visitors. Unions were great in the days of the Tolpuddle Martyrs but we are now in the 21st Century when everyone deserves a living wage – yes Unions will say that is what they are fighting for, but they are the ones who cause strikes and put barriers between employers and employees.
I am a Union organiser and I can tell you from experience it is not unionising that marginalises employees and employers. Union members use the resources and support to try and build a stronger relationship with the employer. If you do not have happy Cast Members, Disney World would be just like every other theme park. Cast Members make visiting WDW a life changing experience for people and they are working together as a union to see that they are able to pay their bills so they can continue in that service. If the employer says they’ll be given a bonus and then goes back on their word, then it is the employer’s responsibility for the workers who decide to seek industrial action. This is coming from someone who loves Disney with all of my heart and who has worked as a Union organiser for three years. Unions are important in 2018 and employers like The Walt Disney Company are why.
Please excuse any grammatical errors as I scribbled in the heat of the moment
no, no. I’m certain that trained representatives fighting for living wages is no way to achieve them.
Seriously, I personally I would like to see Unions cut out as middle-men: but that would only be possible if Federal legislation mandated a living wage. and health care and free education while we are at it? Oh right. And that’s why I love to escape reality to Disney World! Totally serious. Those are among the reasons.
But unions strike to *get* their workers a living wage. And often strikes are about getting better treatment for the people the employees serve (e.g., teachers striking because of class sizes). Unions put barriers between employers and employees in the sense that they bar employers from mistreating their employees. Yes, they have their issues, but a society that bans all its unions is on the express train to something really ugly. In fact, historically it’s often one of the first steps dictators take in consolidating power.
If a company “mis-treats” their employees, that company will have a difficult time attracting and retaining employees, which then affects the bottom line. If the company wants to survive, things have to change. Again, the market determines what is fair treatment and salary. I have nothing against unions in the private sector. That is where they belong. Companies will live or die by their arrangements with unions, unless govt steps in and unconstitutionally bails them out of bankruptcy. There is nothing good that comes from unions in the public sector as the politicians use the taxpayers as a bottomless pit to bail out poor financial decisions that our bankrupting many local and state govts.
The number of exploited workers putting up with abuse and mistreatment suggests otherwise. You’re assuming a situation of full employment, where mis-treated employees have both the opportunity and flexibility to move to other companies. Also, globalization is a thing. If a company can’t find labour domestically, they will either bring in labourers from other countries (either through government programs that allow them to exploit foreign labour – like Canada’s Seasonal Agricultural Workers program – or by paying foreign labourers under the table), or even move their operations to another country (obviously not possible in the service industry). Finally, all of the necessary protections workers currently have are due to advocacy and union strikes and activism – not the free market.
I agree 100%, A. Nielsen.