Disney has to do ‘better than the minimum’ in labor union negotiations: IATSE Local 631 president
Cast members at Walt Disney World reject proposed contract ahead of annual spring shareholders meeting.
DAVID BRIGGS: Not so happy at the happiest place on Earth, thousands of Disney Union members voting down a new contract that would hike pay by $1 an hour each year for more than 30,000 Walt Disney World service members. 96% of members rejected the proposal, saying the $1 yearly increase does not go far enough to cover the high cost of living in Central Florida.
Joining us now is Paul Cox, a Disney cast member and President of the Orlando Stagehands Union, IATSE Local 631. Yahoo Finance's Allie Canal here with us as well. Nice to see you both.
Paul, we'll start with you. You help lead the negotiations for this new Disney contract. Disney already pays $4 per hour more than Florida's minimum wage, and that offer takes workers to at least $20 an hour by 2026. Why are you a no here?
PAUL COX: So the realities are that the inflationary pressures that the cast members have faced in the last few-- the last year far outstrip what $1 equates to. $16 an hour for a cast member who's making $15 today is 6.67% increase, right? And as your viewers know, that's not the rate of inflation. So that's also-- that's just not keeping up with the realities that the cast members are facing.
The other part of it is, is that Disney is known for world-class service, not the minimum. They're seen as the maximum, the gold standard of customer service. So to try to equate the minimum wage to that gold standard, that high level of guest interaction is not a fair comparison, right? These are workers that are equal to any other high-end service industry worker that is selling a luxury good, in essence.
ALLIE CANAL: And, Paul, we reached out to Disney for their response on this vote. A spokesperson saying, quote, "Our strong offer provides more than 30,000 cast members a nearly 10% on average raise immediately, as well as retroactive increased pay in their paychecks, and we are disappointed that those increases are now delayed." Disney is offering other incentives as well, like eight weeks of paid family leave, a 401(K) option. What comes next here? And are you prepared if Disney doesn't budge on that minimum wage number?
PAUL COX: Well, so I got to point out that in their quote, they're quoting 401(K). That 401(k) is unmatched. It has unrestricted fees that have no check or balance from the Union or anybody else. So it could very quickly become a profit center for the company for an investment opportunity for the cast, one. Two, for a cast member who's on the edge of poverty, how are they going to take money aside to put away for savings, right? That's the first ludicrous statement in that.
The second thing is that a nearly 10% increase, somebody is rounding up pretty significantly, right? I can use a basic calculator. $16 from $15 is, again, 6.67%. So that's not exactly a fair standard. That's my first thought on this, right? We have to do better than the minimum. This is a world-class company with a world-class product.
ALLIE CANAL: So what do you need then to get a deal done? And again, what if Disney doesn't budge on that, what-- is a strike potentially on the table?
PAUL COX: Well, right now we're looking forward to getting back to the table with them, right? A strike is always an option in a labor dispute, but I don't think that we're anywhere close to that, right? The realities are-- is that the company said this was their best offer. We asked the workers to voice their opinion. This is where we are.
So there's a ways to go before that happens. It's not a tomorrow thing. It's not a next week thing. But I'm not going to take any options off the table as we go forward, right? So what we're looking for is increases that respect the inflationary pressures that the cast members have faced.
DAVID BRIGGS: Paul, you know this is a public company. Any fear that your demands, $3 an hour raise, will eventually end in people losing their jobs? You know the pressure they're under from shareholders.
PAUL COX: So the Walt Disney Company, the vast majority of its income comes from the site that I work at as a cast member, right? This company reports publicly as a publicly traded company that it makes billions and billions of dollars in profit every quarter. And they beat those profit-- profit numbers most quarters year over-- quarter-over-quarter. So while other portions of the company are facing pressures, Disney+ being one of them right now, the business unit that these cast members work in are making-- is making more profit every quarter and quarter.
And just like in any other corporation that's doing well, these workers want to share in the gain. So, no, I don't think that the answer here is that the cast members are going to get a raise and then they're going to get laid off. That's not how that works. Also, these are the same cast members that produce that economic engine that fuels the Disney Company forward.
ALLIE CANAL: And, Paul, we've seen an uptick in corporate unionization efforts, from Starbucks to Amazon. Why do you think this is happening now? And how does this movement help your own fight at Disney?
PAUL COX: So, yeah, unions are more popular than hot dogs in America right now. That is an absolutely wonderful fact, but it's because when companies don't take care of the workers, the workers have their own process that they can go through and have collective voice. It is, in fact, supply and demand economics, right? The workers are a part of the supply chain. And if they're not respected, just like any other supply, the price can go up.
And unions help provide that ability to negotiate on equal footing with corporations. So corporations that don't treat their employees correctly absolutely will get unionized, right? In my industry, we have a lot of good employers. But because most employers are multi-- most employment situations are multi-employer, that's how insurance and everything else happens.
So I can totally understand the increase of unions, right? I've worked in unionized work my entire career. And it has-- ever since I've worked in a unionized environment, my life has become better.
ALLIE CANAL: And, Paul, finally, coming up on Wednesday, we have Disney's first earnings report since Bob Iger reclaimed his CEO title. From your perspective as a cast member, what are your thoughts on Iger's leadership so far? And what would you like to see from him as he resets this company?
PAUL COX: So the-- I'm expecting the same versus-- the second verse is the same as the first, right? We-- I don't think that Bob Iger is personally a white shining knight that's going to save cast members. I'm hoping that he'll do some things that make more sense and puts things in better perspective for employees. But I don't think that that is a magical pill, Bob Iger taking back over the company as the CEO. I think there's a lot more pressures involved in there. But we'll see what happens.
DAVID BRIGGS: All right, keep us posted. Allie Canal, thanks so much. Paul Cox, thank you as well.