Add escalating labor tensions at Walt Disney World to the list of problems at the world’s largest entertainment company.
Unions that represent about 32,000 full-time workers at Disney World — ride operators, costumed performers, housekeepers, restaurant and shop employees, bus drivers, custodians — said on Friday night that members had voted to reject Disney’s offer for a new five-year contract. Matt Hollis, president of the Service Trades Council Union, a consortium of six unions, said that 96 percent of the votes cast went against Disney.
“Disney can do better and must do better,” Mr. Hollis said at a union event in Orlando, Fla.
In a statement, Disney said that its “strong offer” would provide more than 30,000 employees “a nearly 10 percent on average raise immediately, as well as retroactive increased pay in their paychecks, and we are disappointed that those increases will now be delayed.”
The minimum starting wage for the Disney workers is currently $15. Florida’s state minimum wage is $11, rising to $12 in the fall.
The company’s offer would raise pay for the covered employees by at least $1 an hour per year, taking most workers to at least $20 an hour by 2026. About 13,800 of the workers would get a raise of more than $1 an hour in the first year. Under the proposal, certain workers (housekeepers, bus drivers, certain culinary employees) would reach $20 an hour in the first year. Disney’s offer includes various perks, including an additional 401(k) plan and eight weeks of paid family leave.
The six unions want an immediate $3 an hour raise — lifting the starting minimum to $18 an hour, a level that they say is necessary to address runaway housing costs and other rising living expenses in the Orlando area. The unions want $1 an hour more in every subsequent year. (Last month, some of the same unions won an $18 an hour starting wage for workers at the nearby Orange County Convention Center.)
Disney will now need to return to the bargaining table.
The previous three-year contract expired in October. (Disney requested a five-year one as a replacement.) Since then, Disney World has been operating under an extension that prohibits the unionized workers from striking. It is unknown when the extension expires. Even when it does, members of the unions would still need to vote to approve a strike.
Contract talks started in August. Last month, Disney disclosed in a securities filing that its former chief executive, Bob Chapek, who was fired in the fall, received a $20 million severance package, outraging some union members. Disney also revealed that another ousted executive received $10 million for roughly three months of work, or more than $176,000 a day.
The Walt Disney Company needs to keep Disney World operating at full tilt to make up for losses in its nascent Disney+ streaming division. Last year, Disney Parks, Experiences and Products generated $7.9 billion in operating profit. Disney’s streaming unit lost about $4 billion.
But Disney is also contending with an activist investor, Nelson Peltz, who wants the company to put a magnifying glass on costs, refocus on profit growth and reinstate its dividend, all of which increase pressure on Disney to keep a lid on labor costs. Disney is loaded with debt — more than $45 billion — because of the pandemic and because of its $71.3 billion acquisition of 21st Century Fox assets in 2019.
In Florida, Disney is still dealing with fallout from its condemnation of a new education law that opponents labeled “Don’t Say Gay.” Among many things, the law prohibits discussion of sexual orientation and gender identity through the third grade in Florida classrooms and limits it for older students. After Disney criticized the law and paused political donations in the state, Florida lawmakers retaliated by ending Disney World’s designation as a special tax district, a privilege that effectively allowed Disney to self-govern the 25,000-acre complex.
The Florida Legislature will convene a special session on Monday, part of which will be dedicated to establishing a new governing structure for Disney World.