Earlier this week, Disney’s largest group of unionized employees, the Service Trades Council Union, voted on a contract offer made by Walt Disney World. Negotiations have been going on for months as union leaders and Disney have tried to find middle ground that would be acceptable to both parties.
The union had a stated goal of getting a majority of its members to $15 an hour. Currently almost all the members make less than $12 an hour with $10 being the starting wage for most. From Disney’s viewpoint, they offer a starting wage that is nearly $2 an hour higher than Florida’s minimum wage and they claim the average pay of an hourly employee at the resort is $13.34.
According to reports, Disney offered a raise of 6 to 10 percent over the two years of the contract for most workers, plus a $200 one-time bonus and stable health care costs. Workers currently earning a bit more would see a smaller raise.
The union is composed of more than 36,000 employees, and just about 1 quarter of the membership cast a vote. Of those who voted, 9,117 opposed accepting the contract (93.4%) while 643 voted to accept Disney’s proposal.
The reality for most Disney cast members is that their wages are below that of a living wage for the area. Most have to share housing, drive very old cars or take public transit (which is an iffy proposition in Orlando if you’re trying to be on time to work), and budget very carefully just to afford basic necessities. There’s no hope of saving to afford a better future. There’s little hope of having a second job as Disney requires you to be available to work.
What workers want is for Disney to pay them enough that they’re not struggling week to week to make ends meet, sometimes relying on government services to fill in the gaps. The end result would be good not just for the cast members, but for the community as well.
Companies try hard to control costs and labor is one of Disney’s largest costs. The difference between what Disney says is the average pay for hourly works and $15 an hour is only $1.66 or about 11 percent. That’s not too far a bridge to cross over the next few years.
Frankly, if Disney paid their cast members more, they would also be able to attract more workers to apply and therefore have access to better workers who would be more productive and serve the company for a longer period of time. The costs of increased payroll would be alleviated by those factors.
Now the parties will have to go back to the negotiation table and see what else the Mouse House can do for its workers and for Central Florida. No one is talking about a strike at this time, but with unemployment in Central Florida at a low point, Disney will be feeling pressure to avoid one as replacement workers will be hard to find.
Since the corporate tax rate is going to be reduced from 35% to 21%, Disney should be able to meet these requests and increase the wages for hourly employees. Other large companies including Wachovia and AT &T have already stated that they will do this for their employees based on the new tax cuts. it’s a win win for both parties.
As someone that has supervised entry-level employees at or just above minimum wage, it does surprise me when people expect “entry level” jobs to carry “living wages”. They are not meant as career positions that you can live on for an extended period of time. But this is a product of the economic climate we are in now and the types of jobs people can find, period. Just looking at the math, if the average union employee works 20hrs/week (I will assume that an entry-level position is not full time. Dollars double if it is full-time @40hrs/wk) then 36,000 workers x $1.66/hr increase x 20hrs/week x 52 weeks/year = $62+ million dollar increase in labor costs per year. Add in any benefits that apply (usually ~+19% where I work) and that rounds out to ~$74 million ($148 mill if 40hr/wk). Not a trivial amount of money. Of course, they just spent $52 billion for FOX IP, so the money is obviously there. The difference is the FOX IP purchase increases stock value. wage increase does not.
This illustrates the problem with a federally assigned minimum wage. Different areas have different costs of living and different transportation, healthcare, and other available choices. We need to set living wages so that people can afford to live within reasonable commuting distance from their jobs.