Are Disney World wage scales fair?

[crazy4wdw]

Are Disney World wage scales fair?

According to a study, a 2-tiered pay system adopted by labor unions in 1998 hurts workers -- and the economy.

Scott Powers and Harry Wessel | Sentinel Staff Writers
Posted March 20, 2007

As Walt Disney World and its biggest group of labor unions plunge into contract negotiations this month, one of the unions is heralding a new economic study that claims workers have been underpaid and Central Florida's economy has suffered as a result.

UNITE HERE Local 362 released a study Monday, commissioned by economics professors at Rollins College and Florida International University, that shows full-time wage employees earned $19.4 million less last year than they would have received if the company's wage scales hadn't changed in 1998.

Union officials said the lost pay is a result of an unfair and unexpectedly harsh two-tiered pay system that Disney used for a few years, preventing new workers from getting the same pay that some of their counterparts receive. The economics professors, Eric Schutz of Rollins and Bruce Nissen of Florida International, argue that the pay difference hurts all of Orange and Osceola counties, leading to at least $24 million in lost spending, lower sales-tax revenue and higher social-service demands.

Morty Miller, president of UNITE HERE Local 362, said his union and others now negotiating for a new master labor contract are committed to restoring the wage scales that they bargained away in 1998. He said union officials are "cautiously optimistic" that Disney World will agree to new wage scales, because the company is having a hard time attracting and retaining workers with its current pay and a local unemployment rate hovering near 3 percent.

"Yes, we have made a proposal to accomplish that," Miller said. "That is one of our goals."

Disney World spokeswoman Jacquee Polak pointed out that the 1998 contract, as with all labor contracts, was a mutual agreement between the company and the unions, not a unilateral decision. She said the two-tiered pay system was abolished with the 2004 contract, so workers hired since then are not at any disadvantage. She also took issue with the notion that the wage scales are prompting workers to leave.

"The average tenure of cast member is eight years, compared to the industry average of two years," Polak said.

The current contract expires April 28 for Local 362 and five other unions, which combined represent 21,000 of Disney's 39,500 full-time workers. Full-scale negotiations started last week.

Scott Powers can be reached at spowers@orlandosentinel.com or 407-420-5441. Harry Wessel can be reached at 407-420-5506 or hwessel@orlandosentinel.com.

 

[doombuggy]

Interesting article. I will, however, refrain from discussing my compensation on an open forum.

 

[TheRustyScupper]

1) Maximum pay in a grade many times isn't too bad.
2) However, the starting rates are pretty skimpy.
3) it used to take about 7-yrs to max out.
4) Now, it takes almost 15-yrs to max out.
5) It is hard for folks to make if on $7.00-$7.50 starting pay.
6) And this from a company making record huge profits.


NOTE: I know several people who work for WDW that also get food stamps and subsidized housing - and that includes some that I know where both husband and wife work at MK. It is just too bad that the union is so weak that they can't do anything for the people. A good example of wasted union dues - or where union dues benefit the union and not the employee. The union can't even strike, because so many employees can't afford to be on the street.

 

[DisneyBaby!]

I would have to ask, what is the actual wage that people receive, both starting and actual and how it compares to other jobs in the area. I live and work in the Chicago area in the restaurant business and can not get 17 yo kids to take a host job for less than $8.00/hr. I also know people who are on assistance of some form or the other, but refuse to either work more hours or claim more tips because the will not get the free government insurance and foodstamps that the rest of us pay for ourselves (sorry, not angry or bitter about that). But is it fair that both my wife and I have to work full time so we can make it where we live? I'm sorry, but the keys to success and prosperity is not simply your employer giving you more money. Want to get paid more, get an education, go to college, finish high school, get a learn a trade. Being in management, don't get me started on unions. But with such a vague question, I can't answer that.

 

[raidermatt]

"Fair" is a loaded term. If both sides agree to it, it's hard to call it unfair. You can even go a step further and say that no matter what wages Disney offers, it can't be "unfair" because nobody is forced to work there. As a practical matter though, its not that simple.

I do think its a mistake for a company like Disney, who supposedly prides itself on providing high quality customer service, to have such low pay scales for its frontline workers. This goes for both WDW and DLR.

As the old adage says, you get what you pay for. That's not a knock on CMs. I know most do their best, and considering what they do get paid, they do a comendable job. Its just a fact of business that if you are going to low ball on compensation over the long haul, the quality is going to follow. "Nature rule, Daniel-san, not mine".

 

[DisneyZell]

I agree with the poster above. Plus the interesting thing is that Disney is paying what was negotiated by the Unions in 98 based on what I read, right?

it's the Catch-22 of a Union. They negotiate and get a higher rate at the beginning, and lock in for a long term, which then doesn't let market forces affect the pay...how can you hold the company accountable for this?

If you sign a contract, you have to live with the results...unfortunately the only place that doesn't seem to apply is sports!

look at it this way...if Disney had signed a contract and it was paying above the average, would the unions be negotiating down? I don't think so.

 

[Mickmse2002]

It can be a very difficult balance to strike. Living here in Michigan and watching the slow bleeding death of the auto industry can give an interesting perspective on what is "fair" and where the "fault" is. If the facts listed are accurate then the Union shouldn't be so public in advertising the adverse impact they agreed to in historical contracts. I'm not sure I would want my clients to know that I agreed to a contract that lost them 19 Billion in potential wages. Markets drive wages and sustainability of profits pay for contracts. The auto companies are seeing that here and now. They agreed to outrageous wage and benefit packages when they were flush with cash and are now paying a stiff price. Ultimately it will be individuals that pay the price for ill-advised contracts that both the union and management agreed to. There is plenty of blame to spread on both sides and I am sure the situation with Disney is no different.

 

[raidermatt]

I would have to ask, what is the actual wage that people receive, both starting and actual and how it compares to other jobs in the area.

This is all I could find in a quick search. I'm sure somebody else can find more. This was from an Orlando Sent article in May of 2006.

Universal Orlando raised its minimum wage this month by 50 cents to $7.25 an hour as a way to remain competitive in the hiring game in a market with low unemployment. In March, SeaWorld Orlando went to $7 an hour.

Disney's starting wage is $6.90.

If you sign a contract, you have to live with the results...

From a simple management/union perspective I agree. There is nothing unfair about living up to a contract. No argument from me on that point.

But since this is a Disney board, and we try to look at things from a "what's best for Disney" point of view, I don't think we can just leave it at that.

If the union negotiates a poor contract, and Disney's workers are paid less than the competition, or at best, the same, who is that going to hurt in the long run? Only the workers? Of course not, its going to hurt Disney as well since the quality of its workforce is going to suffer.

The question is, what kind of service do you expect from Disney? If I read the general tone of the boards correctly, most expect service that is far better than average.

Compensation is not the only component in determining the kind of service Disney is able to offer, but it is a significant component.

 

[DisneyZell]

If the union negotiates a poor contract, and Disney's workers are paid less than the competition, or at best, the same, who is that going to hurt in the long run? Only the workers? Of course not, its going to hurt Disney as well since the quality of its workforce is going to suffer.

QUOTE]

when they negotiated it...was it bad? I'll bet it was very good. And I'll bet they locked it in for so long because they were giddy that it was so good. That's the problem with Unions...they just don't consider the long term impact of what they do.

IMHO Unions just don't serve the purpose that they used to. Market forces today will force the salaries to be at certain levels...Union contracts that keep the artificially low or high end up hurting both the companies and their employees.

Someone above referenced the auto unions. Airline unions are the same. They expect the companies to give when they are flush with cash...but aren't willing to give back when the opposite happen, driving companies into bankruptcy where they are forced to break contracts, and then we hear about the evil companies.

While I understand where Union's came from, the bottom line is that if someone will work for a certain wage, why shouldn't a company hire them? If no one will work at that rate, the company will raise it until they will.

 

[raidermatt]

While I understand where Union's came from, the bottom line is that if someone will work for a certain wage, why shouldn't a company hire them? If no one will work at that rate, the company will raise it until they will.

That wasn't the bottom line before unions, but I get your point, which is essentially that unions have grown beyond their true usefullness.


But again, if we make this a union bashing thing, we are missing the point. It might be fun, but it still misses the point.

From Disney's point of view, it shouldn't be about fairness. If Disney's compensation does not match the quality they exepct from their workforce, acheiving their service-related goals is going to be extremely difficult. That's their bottom line.

Unless of course, they don't intend to offer customer service that is any better than average.

 

[DisneyZell]

That wasn't the bottom line before unions, but I get your point, which is essentially that unions have grown beyond their true usefullness.


But again, if we make this a union bashing thing, we are missing the point. It might be fun, but it still misses the point.

From Disney's point of view, it shouldn't be about fairness. If Disney's compensation does not match the quality they exepct from their workforce, acheiving their service-related goals is going to be extremely difficult. That's their bottom line.

Unless of course, they don't intend to offer customer service that is any better than average.

That's a catch-22 thing...they have a contract and if they pay below OR above that, isn't that an issue? even if they had wanted to...I just don't think they have the option. Unions are VERY strict about what you can do...you have to follow the rules.

Agree, we don't need to be Union bashing (and agree it would be fun), but I just think they lock in the contract, I don't think they have a choice. anyone know for sure?

 

[raidermatt]

You're right, what's done is done. Obviously some of this stuff being leaked out is part of the union's negotiating tactics.

What Disney can do is make sure that the new contract reflects what best matches their strategic goals, and not just the lowest they can get from the union.

Unless of course, one of their strategic goals is to merely get the lowest wages it can out of the unions, which then goes back to what they really expect to provide in terms of customer service.

 

[Mickmse2002]

You're right, what's done is done. Obviously some of this stuff being leaked out is part of the union's negotiating tactics.

What Disney can do is make sure that the new contract reflects what best matches their strategic goals, and not just the lowest they can get from the union.

Unless of course, one of their strategic goals is to merely get the lowest wages it can out of the unions, which then goes back to what they really expect to provide in terms of customer service.

Can you really infer a cause/effect relationship between level of pay and customer service? I'm not so sure. I again offer the auto union analogy. UAW employees are the highest paid in the industry and yet the cars the build are not necessarily the highest quality. We would like to think that pay is the big motivator but Maslow certainly thought otherwise.

 

[DisneyZell]

You're right, what's done is done. Obviously some of this stuff being leaked out is part of the union's negotiating tactics.

What Disney can do is make sure that the new contract reflects what best matches their strategic goals, and not just the lowest they can get from the union.

Unless of course, one of their strategic goals is to merely get the lowest wages it can out of the unions, which then goes back to what they really expect to provide in terms of customer service.

I really think we go back to 1998...was the union negotiated rate above the average? I'll be it was significanly above, but then the rest of the area went up faster. Anyone know how we can check this? I think that is the most salient point here. I don't think Disney would screw over it's employees, and considering the length of service for most I'm guessing they are ok.

I agree this smells like a union ploy...

 

[raidermatt]

Can you really infer a cause/effect relationship between level of pay and customer service? I'm not so sure. I again offer the auto union analogy. UAW employees are the highest paid in the industry and yet the cars the build are not necessarily the highest quality. We would like to think that pay is the big motivator but Maslow certainly thought otherwise.

I'm not sure how flawed Maslow's research was, or if its more a case of people using his heirarchy to further their own agendas, but yes, there is most definitely a cause/effect relationship between compensation and quality of work. Practical experience teaches us that.

But as I said, its ONE component of that equation. Certainly its not the only one.

 

[ltp74]

What workers do UNITE HERE represent at WDW? Also is Disney's pay low for everything(stagehands, plumbers, electricians, IT and so on), customer service jobs will always be low paying because people 18 to say 25 years old who work most of those them don't know any better.

 

[Mickmse2002]

I'm not sure how flawed Maslow's research was, or if its more a case of people using his heirarchy to further their own agendas, but yes, there is most definitely a cause/effect relationship between compensation and quality of work. Practical experience teaches us that.

But as I said, its ONE component of that equation. Certainly its not the only one.

I have no agenda to further. Where is the evidence that there is definitely a cause/effect relationship between compensation and quality of work? I would be very interested to read it.......and make a copy for my next merit raise performance review with my boss.

I would think that the thousands of negative posts about Disney management we read here on these boards would certainly not support the idea that higher compensation results in higher quality of work.

I have worked closely with a lot of minimum-wage employees that do excellent positive work.

 

[OKW Lover]

Maybe I'm a bit cynical (ok, no maybe about it) but if the current wage agreement is so "unfair" then why did the union agree to it? There are two parties to these agreements. And why is the story focused just on the hourly rate? Shouldn't the "fairness" be judged based on the total compensation package and comparable jobs in the same labor market? Sorry, to me this story smacks of somebody getting ready for the next round of negotiations, not a valid news story.

 

[Mickmse2002]

Maybe I'm a bit cynical (ok, no maybe about it) but if the current wage agreement is so "unfair" then why did the union agree to it? There are two parties to these agreements. And why is the story focused just on the hourly rate? Shouldn't the "fairness" be judged based on the total compensation package and comparable jobs in the same labor market? Sorry, to me this story smacks of somebody getting ready for the next round of negotiations, not a valid news story.

I think you are correct in this assessment. I also can't help but think it is a huge tactical error on the part of the Union leadership. Why advertise the fact they agreed to a contract they think unfair and detrimental to their membership. Even if it was corrected in their most recent contract, why comment on it now?

 

[YoHo]

I wouldn't think that the issue for Disney isn't so much that people paid what they pay can't do good work, but simply that there are others paying more for the same work.

That's been Disney's problem in Anaheim and Florida, they pay some of the lowest rates on average for their themepark employees.
That means that all the most talented individuals will go to the higher paying jobs elsewhere.