unemployment

Cast Members warm up as part of 2011 fitness training at Walt Disney World

A bit of good news for the cast of Disney’s domestic theme parks and their guests. The starting hourly wage of the entry level cast member could be rising to $10.00. According to a report in Bloomberg news, the 25% raise would roll out over two years. Last week, Disney made the offer to the Service Trade Council, a group of labor unions that represents almost half of Walt Disney World’s employees.

I see a couple of factors behind this offer. First, there is a nationwide push to raise the minimum wage to $10.10. Disney can show that companies can make this leap on their own by making this move now. Second, Disney has successfully recovered from the down economy and reported record profit last year; $6.6 billion is a lot of Disney dollars. Third, Disney has been investing a ton of money in capital improvements, they have to balance that with some concern for the personnel side of the ledger too.

Of course, there are concessions Disney wants from the unions in return. Switching from Pensions to 401(k) style retirement plans is one. I’m sure there are many others. But hey, that’s what collective bargaining is all about.

There’s one big reason for the offer that Bloomberg doesn’t mention, the Orlando labor market is once again becoming very competitive. In February of 2014 it dipped to 5.5% unemployment rate. That’s nearing the 4% that’s typically considered full-employment (everyone who wants to be working is). Wage inflation is one result of low unemployment, so Disney might be forced to raise wages, even if they weren’t negotiating a new contract with its employees.Read More »Disney Theme Park Entry Level Wages to Climb to $10 an Hour