Previously-ongoing wage negotiations between Walt Disney World management and unions representing over 40,000 Cast Members have broken down. According to one of the unions, the company “refused to add even one cent” to its previous offer, and its latest proposal was actually worse than a previous offer because it reduced retroactive pay.
That prior proposal was overwhelmingly rejected by Cast Members; 96% of union members voted against Walt Disney World’s “best and final offer.” That would have amounted to an immediate $1 raise to the hourly starting wage, which would put the minimum starting wage at $16 per hour. From there, hourly pay would’ve gradually increased to $20 per hour over the next 5 years.
Cast Members represented by local unions have been pushing for an immediate increase to $18 per hour, with a future path to raise wages to $20 per hour. With Walt Disney World’s refusal to budge from its prior best offer–and unwilling to offer a middle ground compromise–negotiations ended and did not resume late last week as planned. Instead, the unions indicated that they will begin a public pressure campaign “to bring light to the plight of Cast Members struggling to survive the devastating increase in the cost of living.”
Notably and perplexingly, Walt Disney World’s refusal to offer “even one cent” to its prior best and final offer came only days after Universal Orlando Resort announced to Team Members that they are raising starting wages to $17 per hour effective June 4, 2023.
In addition, Universal Orlando announced that many Team Members will receive a pay increase based on the new rates and their time with the company. According to Universal, wages are just one improvement being made to improve Team Member satisfaction. That theme park operator has also elevated its 401K match and tuition reimbursement programs, added compassion leave, doubled parental leave, enhanced family planning benefits, launched a new recognition program, and changed Team Member comp ticket availability.
Universal also purports to be elevating the work environment, and to that end, has begun upgrading break areas, back of house restrooms, and have plans for Team Member dining improvements. Universal contends that its work culture seeks to create a path forward that supports Team Members, giving them an opportunity to grow while fostering a real sense of purpose and belonging.
Against this backdrop, there’s a lot to discuss when it comes to commentary about the stalemate between Disney and the unions. One thing I hope we don’t have to debate is wages in relation to guest pricing. Back in past union wage negotiation posts, this was always the core commentary, as some Walt Disney World fans opposed wage increases under the (mistaken) assumption that higher wages equaled higher ticket and hotel prices.
The last few years should have disabused anyone of that notion, and demonstrated that Disney raises prices based on what the market will bear–and even when cutting its own costs. It has very little to do with input costs. (Or is someone going to claim that Disney went from free FastPass to paid Lightning Lanes because the exact same thing somehow costs the company more to operate?) Disney has been able to increase margins thanks to demand and consumer tolerance for higher prices; those same margins can go the other direction, too.
Treatment of Cast Members, staffing shortages, and tangentially-related topics have been a topic of discussion for a while, and also one that has recently popped up in the comments section here a few times. Suffice to say, I have a lot of thoughts about the current union negotiations with Walt Disney World.
The first is one of surprise that Walt Disney World has not proactively and voluntarily raised wages prior to this. I’m downright dumbfounded that the present standoff has been allowed to drag on. When it started, I assumed this would be quickly resolved given everything the company has said, and realities of the labor market. At the very latest, I figured Universal’s pay increase would put an end to it. I’m shocked and disappointed that the situation has gotten this bad.
As to why Disney should be offering higher wages to Cast Members, let’s go back to the beginning. If you’ve read even a few posts here over the last two years, you’ve likely heard us blame the absence of X or Y on staffing shortages. This does not just negatively impact the guest experience, but also, Disney’s bottom line.
While improving tremendously, staffing shortages remain a key impediment to fully normal operations at Walt Disney World. The company has had tremendous difficulty filling certain key roles, and turnover is incredibly high–even as Disney hires aggressively, it has been losing employees almost as quickly as it can onboard them.
As a result of this, Disney has left money on the table–because it has literally been unable to fill tables at restaurants, offer a full slate of upcharge offerings, etc. Staffing shortages have resulted in capacity constraints as a mitigation measure, which means fewer people at the parks due to attendance-limiting park reservations being fully booked at certain times.
That might be too much of an abstraction–concrete examples are how long it took to bring back Minnie Vans, Victoria & Albert’s, non-seasonal After Hours events, or EPCOT Food & Wine Festival paid seminars. All of those directly generate revenue and took longer than expected to return. (Or still aren’t fully back.)
Walt Disney World could have remedied many of the staffing shortages by voluntarily raising wages a year or two ago. Actually, they could have addressed this five years ago when it first started becoming an issue. While exacerbated by the pandemic, we were discussing staffing shortages back in May 2018 when writing about that year’s standoff between Disney and the unions, predicting that 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.”
Instead, they offered hiring bonuses. My assumption was (and is) that there were a variety of underlying motivations for this. First, a hiring bonus is a one-time payment, whereas higher wages are a long-lasting and recurring expense. Second, it’s not as straightforward as simply raising wages for specific positions; with unions involved, contracts need to be negotiated and it’s unlikely those groups would have agreed to targeted increases for certain roles, but not others.
Finally, it’s possible that the company was ‘waiting out’ the hot labor market, assuming service industry employees would lose leverage and wage growth would slow or reverse. That has not happened. Even as layoffs are starting to hit white collar workers, there are still nearly 2 open jobs for every unemployed worker.
That discrepancy is even more skewed in some markets and sectors, with Central Florida hospitality and leisure likely being one of them. That’s precisely why Universal Orlando is raising wages. It’s not simply a matter of corporate generosity–it’s being competitive in the scorching labor market.
Just looking at this objectively, it’s difficult to understand Walt Disney World’s strategy, if they have one at all. Up until now, it sure seems like they’ve been waiting the last two years for a looming downturn, and have missed out on potential revenue as a result. That might seem like a dubious assertion given Disney’s earnings calls touting impressive profits for the parks, but there’s nothing to say they couldn’t have been even better.
Business has been booming as a result of pent-up demand and per guest spending is up thanks to reduced discounting, Lightning Lanes, etc. Nevertheless, bringing back Minnie Vans, After Hours, and other paid events would have generated further profits. In short, Disney missed out on even better earnings performance by being miserly.
So what’s the strategy now? Bet on a recession or assume economic downturn is on the horizon? Figure that’ll cool down both the red-hot labor market and demand for travel? Hope that the College Program and International Programs can be further scaled up to provide cheaper and less competitive labor?
Maybe some or all of that will work out in Disney’s “favor,” but it’s a bold strategy and one that has not been vindicated over the course of the last couple years. It’s also one that ignores all of the expansion in Central Florida–new hotels, area attractions, Epic Universe, etc–to assume that the labor market is going to get weaker, somehow. Even if there’s an economic downturn late this year or early next, it’s hard to imagine that “solves” the labor shortage given growth in the region.
Beyond that, it’s difficult to see why Disney is dragging its feet and letting this become a public spectacle. The Walt Disney Company has made the importance of Cast Members central to its image. High-level leaders at Walt Disney World and the corporate level make gratitude for Cast Members part of their persona. When it comes to the importance of their employees, they really talk a good game.
Naturally, this is true of Bob Iger and Josh D’Amaro, who are smooth operators and savvy public speakers. But it was the case even with Bob Chapek! The man who notoriously and infamously didn’t “get” Disney even understand how important it was to publicly praise Cast Members.
During one of his last public interviews when asked about the Reedy Creek controversy, Chapek pivoted and offered this: “the lesson, and what we always should’ve known, is that Disney is all about the Cast.” He noted that people might remember the castle and churros, but the reason people have magical memories that last a lifetime is the guest-cast interactions. He called Cast Members the “secret sauce” and the key to a great guest experience at Walt Disney World.
Chapek also said that “around 99%” of the positive guest feedback he received when running Parks & Resorts was about Cast Members. He was “reminded” about the sentiment of Cast Members and the importance of them feeling valued and as if they could relate to the company. “You have to make sure the Cast is at the center of everything you do,” Chapek concluded. For once, Chapek got something right with that sentiment. Even a blind squirrel finds a nut every once in a while!
It’s not just quotes from executives. Walt Disney World dedicates much of its online presence to promoting its public image as an employer. Positive treatment of and opportunities for Cast Members are highlighted, as is how important they are to the parks and guest experience. Among many other things, the Walt Disney World Ambassadors have their own dedicated social media accounts and there’s a whole Cast Life subtopic on the Disney Parks Blog.
Posts like this border on propaganda, using words like “lucky,” “incredible,” “gift,” and “doesn’t even feel like work” to describe being a Cast Member. Disney is a savvy company and purposefully covers Cast Members in this manner–it’s good for recruitment and also for the all-too-common guest misperception that being a Cast Member is a dream job.
To its credit, I guess, Disney is great at manicuring its image. Heck, they even managed to turn a decision made due to realities about the labor market into a statement about inclusivity. Much of the content produced now revolves around employees–and that also includes television ads in the Orlando and Anaheim/Los Angeles local markets.
The problem isn’t necessarily this sentiment–it’s very much correct. Highlighting Cast Members and their importance to the guest experience is absolutely the right thing to do. The problem is that all of this rings hollow when paired with how Disney actually treats Cast Members, as underscored by this standoff. Words are meaningless if you don’t walk the talk.
Cast Members breathe life into Walt Disney World, and they have long been the defining element of the guest experience. I think someone once said: “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.
Then there’s the human (or humane) side of it. The living situation of many Cast Members is well-documented at this point. There have been countless exposes on homelessness and motel life along Florida’s Highway 192 corridor. This impoverished working class has been an open secret in Orlando for years and was even depicted in The Florida Project, an excellent and heart-wrenching film that is only nominally fictional. (That’s the one of the best and most heartbreaking movies imaginable, and should be required watching for all Disney fans.)
There’s a reason that affordable housing is coming to Walt Disney World and the company is committed to helping make it happen. It’s actively impacting Cast Members, and Disney’s ability to find workers. Shelter inflation is skyrocketing, with rising rents outpacing even the housing market. Florida has become the least-affordable state when cost of living is measured against typical household incomes. Orlando ranks second-worst in the country when it comes to the affordable housing shortage.
Personally, I think that Cast Member compensation should be competitive and, if anything, above market. Walt Disney World should be trying to attract the top talent in Central Florida. Increasing wages means Walt Disney World can attract and retain friendly and helpful Cast Members who will in turn improve the quality of the guest experience–in other words, making your vacation magical.
Over the last 3 years, we’ve heard an increasing number of reader complaints about Cast Members not being as friendly or as “magical” as they used to be. Three components of this are Disney demonstrating it didn’t really care about Cast Members during the closure and in the early stages of the phased reopening, pandemic-era rule enforcement taking a tremendous toll, and a rise in entitlement among guests that the company created. (Few things are more destructive to service than the mantra: “the customer is always right.” It’s demonstrably false and empowers the worst types of people to exploit things. It’s a complete garbage saying.)
So many people we know who worked at Walt Disney World in 2019 are gone, including “lifers” who I never would’ve expected to leave. Some were furloughed and called back, but opted against returning because of the way they were treated and taken for granted. Others got burned out from being “babysitters” for the year after reopening. Some simply found other jobs elsewhere that offered better pay or were otherwise less stressful. Every single one of them misses “making magic” but is happy with their decision to leave.
In talking to them, there’s a running theme in how Walt Disney World has handled Cast Members: arrogance. Arrogance in assuming furloughed Cast Members would be happy and thankful to return after months of radio silence. Arrogance in assuming “magic” is the ultimate trump card that makes Walt Disney World an unparalleled workplace. Arrogance in just fundamentally failing to appreciate the current realities of the labor market, and that it’s not 2016 anymore.
Let’s set those (very big!) variables aside and simply try to look at this from an objective, dispassioned perspective and again bring this back to competitiveness. The on-the-ground reality is that the Central Florida labor market has gotten tighter and Walt Disney World has not made much of an effort to compete in it. Yeah, there are Cast Members who are passionate about their jobs and proud to carry on Walt’s legacy. Some Cast Members are willing to accept less than they’re worth to work for Disney.
But for most, money talks. Employment is entirely transactional, and while companies can skew BS about being a family, legacy, and so forth, nothing shows you’re valued in that “relationship” like commensurate compensation. The converse is also true: nothing says that you’re not valued like being paid below market wages.
Universal will soon be paying its frontline employees $17 per hour, whereas Disney won’t offer a cent more than $16. We’ve dedicated a lot of words arguing why Walt Disney World should pay higher wages, but that’s really the bottom line.
Ultimately, that’s where we stand on this breakdown between Walt Disney World and the unions, and the company’s reluctance to pay higher wages to Cast Members. It’s disappointing that Walt Disney World didn’t proactively and voluntarily raise wages a year or two ago, and it’s downright heartbreaking that they’re continuing to fight over Cast Member pay.
This barely touched upon issues of living wages or the astronomical cost of living and shelter in and around Orlando, when in fact, our entire commentary could have centered around that. Instead, we only touched upon it in part because that’s its own huge can of worms; it’s also a (sadly) controversial and ideologically contentious issue, and one involving externalities that Disney cannot single-handedly address. Unfortunately, there is no outcome here that resolves Orlando’s cost of living or housing crisis.
However, it’s also because it’s not even necessary to address any of that. Walt Disney World should pay higher wages to be competitive with Universal Orlando. Attracting and retaining passionate and talented Cast Members should be a top priority, as should treating them in a way that makes them feel valued and wanting to make magical memories that will last a lifetime.
As a guest, you should selfishly want all of that. Your vacation is better if Cast Members are treated better by Walt Disney World–there’s a straight line between how they are treated and how guests are treated. In our opinion, paying Cast Members higher wages is also the right thing to do for myriad reasons, and means the company actually walking their talk. Words mean very little; it’s actions that matter to me.
Personally, I feel a little better about paying astronomical prices when I know that a company is doing the right thing and treating its employees well. Central Florida’s increasing cost of living and housing alone should’ve prompted Disney to offer higher wages to its frontline workers. But we don’t even have to get to those major and more contentious points to have a winning argument for paying and treating Cast Members better. If you are a Cast Member reading this, thank you for all you’ve done and good luck in your fight–a fight that shouldn’t even need to be fought–for higher wages. We hope you know that the vast majority of fans actually appreciate you in precisely the way that your company claims to care.
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Any thoughts to add about Cast Member wages at Walt Disney World? Disappointed that Universal is now “beating” Walt Disney World when it comes to employee treatment and wages? How do you feel about Disney’s handling of Cast Members, and what the company says versus what it does? Would you feel better about paying Disney’s premium prices if it meant the company was treating its employees better? Agree or disagree with any of our commentary? 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!