Walt Disney World is among big companies moving toward paying workers at least $10 per hour — a change that experts say will improve the standard of living for the lowest-paid employees and could pressure other employers to raise pay.
A proposed contract with Disney World’s largest union group, the Service Trades Council, would provide minimum hourly pay of $10 in 2016 for more than 23,000 full-time workers if it’s ratified next week. This year, the start rate would rise from $8.03 to $9 — $1.07 more than Florida’s minimum wage. The council estimates that about a third of its workers make less than $9 now.
“There’s a movement across this country to raise the minimum wage,” said Ed Chambers, the council’s president. “Disney’s just ahead of the curve. They probably anticipate that by that time  it will be the going rate. Why not take a leader position in raising the standards for everybody?”
Sixto Roman, a ride attendant at the Animal Kingdom, is one of the Disney workers looking forward to the extra pay. Roman said he relies on food stamps and sometimes worries about how he’ll pay rent on his pay of $8.35 per hour.
“My family will have a better life,” said Roman, a 28-year-old married father of two young daughters. “It won’t be so stressful.”
California-based Gap Inc. and Swedish retailer Ikea, both of which have stores in Central Florida, also have announced plans to raise minimum pay to $10 or more nationwide.
Economists say a major driver for such companies is the desire to hire and retain good employees as the economy improves in states such as Florida, where the unemployment rate dipped to 6.2 percent in June.
“The labor market’s tightened up a little bit, and companies are paying up, not just to get workers but to keep them,” said Mark Vitner, a senior economist with Wells Fargo.
In Orlando, economists said, competition for workers is escalating as the theme-park and hospitality industries grow. Universal Orlando, for example, is hiring about 3,500 new workers this year. Its expansion includes the new Wizarding World of Harry Potter — Diagon Alley, the Cabana Bay Beach Resort hotel and eight new CityWalk venues.
Both Universal and SeaWorld, whose work forces are not unionized, raised hourly starting rates to $9 in June, two months after Disney made its contract offer.
Universal, which boosted hourly pay by $1, said compensation will remain part of its recruitment strategy but would not elaborate. SeaWorld, which raised the start rate for nearly 30 job classifications from $8.30, said it doesn’t anticipate raising wages again soon.
Experts said other tourism employers will likely be pressured to meet or come close to the Disney wages.
“It’s going to turn into a bidding war,” said Duncan Dickson, a professor at the University of Central Florida’s Rosen College of Hospitality Management who used to be Disney’s director of casting.
By paying more, experts say, theme parks can reduce turnover costs and keep attracting employees who will focus on customer service.
“If you’re a merchandise person at one of the new merchandise shops in Diagon Alley, there’s a lot more expected of you in terms of entertainment value than if you’re a clerk at Target or a clerk at Walmart,” Dickson said.
Another Disney contract for part-timers in the Service Trades Council that will be negotiated later also will include the offer of a gradual increase to $10, Disney and the union group said. Roughly half of Disney’s 70,000-person Central Florida workforce is represented by the council, which includes janitors, housekeepers and bus drivers.
Disney spokeswoman Jacquee Wahler said in a statement that the pay offer “represents the appreciation we have for our cast members and our commitment to providing a leading employment package.”
Not everyone thinks the proposed contract is a winner, however. The leadership of two of the six unions in the Service Trades Council gave it a thumbs down. Detractors say employees who make more than the minimum would get relatively small raises when compared with health-insurance increases after the first year.
Still, Chambers said, the pay increase for the lower-paid workers is “huge.” He noted that the change will be gradual — $9 this year, $9.50 in 2015 and $10 in 2016.
The Disney contract vote, scheduled for Friday, comes at a time of national debate about the federal minimum wage, which is $7.25. President Barack Obama wants to raise it to $10.10, which supporters say would give the nation’s poorest workers a boost and reduce dependence on public assistance. Republicans have opposed the plan, saying it would be a job killer.
In California, where Disney has its headquarters and operates Disneyland, the state raised its hourly minimum wage to $9 this month. It will go to $10 in 2016. The minimum rates this year and in 2016 are the same as the ones Disney is offering its Orlando workers.
Ikea says it looked at the cost of living when determining increases in its start rates, so changes differ by location. In Orlando, workers will go from $8.25 to $10.57 in January.2 comments on this story
Gap Inc., which owns chains including The Gap, Banana Republic and Old Navy, set a minimum hourly rate of $9 last month and will go to $10 next June.
Such jumps are particularly meaningful in Orlando’s tourism-dominated economy, experts say. A Sentinel analysis last year showed that Central Florida is the country’s lowest-paying major metro area. For those at the bottom, the increase is significant, said Sean Snaith, a University of Central Florida economist.
“Does it push them into the middle class? Probably not. But … it’s not an insignificant hike from where the minimum wage is now in Florida.”