Disneyland and its largest union recently agreed on a new contract that increases the starting wage for employees, eventually raising it to $15 an hour, ahead of when the state is scheduled to raise the minimum wage to that amount. One of the pressure tactics unions used to get Disney to agree to that change was by placing a measure on the ballot that would have all hospitality companies receiving tax rebates from the city of Anaheim forced to pay their workers a “Living Wage.”
The vote is November 6th, but the battle has already started to see if Disneyland would be included in the list of companies who receive the financial benefit from Anaheim. Disneyland recently asked the city to stop offering it tax breaks in an attempt to be exempt from the “living wage.” Disneyland says this removes them from the effects of the law if it passes, the Union says not so fast, while the city of Anaheim is still officially on the fence (although probably leaning in Disneyland’s favor).
It appears that a 1996 agreement for Disneyland’s Mickey and Friends parking garage included a 40-year bond that requires Disney and nearby hotels to pay taxes and parking revenue, to pay back the city before the city transfers ownership of the garage to Disney. The union says this is in effect a tax rebate because taxes collected by the city benefit Disneyland.
There is some good reporting on the issue this week in the LA Times and OC Weekly.
What’s sad to me is that Disneyland has let its relationship with the communities around the resort (such as Anaheim and Garden Grove) sour. Disney is still a huge driver of tax revenue for both cities and Orange County, but collecting taxes is not enough when your employees are having to live in their cars or receive public assistance to survive. The increase in minimum wage is a good start. I’m hopeful that bridges can continue to be mended, but the fact that the union felt like it had to put this measure for a living wage on the ballot to force action from Disneyland is not a good sign.
There’s a good chance all of this will be decided in a court of law, but Disneyland could do more for its workers and their families to ensure they can afford to live in the communities they work in. That’s what a living wage does and it’s not such a bad idea.
If Disney ends up not having to pay its workers on par with other hospitality businesses in the area, it’ll end up with the worst of the area’s workers — the better workers will end up in the higher-paying jobs at other locations, and Disney will have to take whoever’s left. In other words, you get what you pay for.
Disney, of all places, should be leading the way when it comes to paying its employees a living wage. Anyone who works there full-time should be able to afford to live off that salary. Otherwise, the company is just exploiting the workers and the cycle of the working poor continues.
Just be prepared to pay even higher ticket prices, hotel room prices, dining and merchandise prices if the “Living Wage” goes through. Disney, like any other business, will not just absorb the increase in payroll expense and dilute profits. A higher payroll liability will result in price increases to the consumer throughout the parks and resorts. It will also undoubtedly means a reduction in the number of cast members employed, as management will have to find ways to reduce head count (fewer characters in the parks, reduce or eliminate “streetmosphere” performers and other in-park entertainment). Management could look to reduce the number of hours the parks are open. Opening an hour or two later in the morning and/or closing a hour earlier would have a big impact on payroll hours and have a minimal impact on park attendance.
In the end you can expect some cast members will find themselves unemployed and the consumers cost to visit the resorts and parks to increase.