After months of negotiations, more than 45,000 unionized Cast Members just secured a substantial raise. By the end of the year, these amazing magic makers will go from $15/hr to $18/hr with the promise of $20/hr within the next 2 years. This is a fantastic victory for hard-working Cast Members and well deserved. Without them, there would be no magic. Many have wondered, though, if the costs would be passed on to the consumer.
It’s a valid concern. After all, no cooperation ever says, “You know what? We are OK making less money. That’s cool.” It just doesn’t happen, especially when there are shareholders to answer to. Shareholders want one thing and one thing only: profit. It stands to reason then that the money will be made up somewhere.
The most logical place to recoup the cost is price increases. This would be good news for shareholders but bad news for guests. It also seems to fly in the face of Iger’s current trajectory. When he resumed his position as CEO, it was reported that he greatly disapproved of the price hikes implemented during Bob Chapek’s reign.
Though it must be said that he didn’t disapprove enough to halt the planned price increase set to take effect shortly after he took over, he did walk back some unpopular changes, including one of his own. Resort parking fees were removed, and more value ticket days were added at Disneyland. Whether this is a legitimate attempt to right some of the wrongs he saw taking place around him or paying lip service to an “I care about your concerns” act is up to you to decide.
Those who worry about increased prices offsetting the raises aren’t entirely off base in the fear. This is often a tactic used by corporations to recoup losses. However, one analyst says that isn’t going to happen. William J. Luther, associate professor of economics at Florida Atlantic University, says, “It is tempting to think the recent pay increases will drive up Walt Disney World’s costs and ultimately cause the company to raise ticket and concessions prices. But that’s not quite right. Rather, Walt Disney World’s prices and labor costs will have been driven up—at least in dollar terms—because the value of the dollar has fallen.”
That’s one way to look at it, but regardless of the reason, we still are going to be paying more, right? Not necessarily according to Luther. “Unusually large price hikes will not “become the norm. Money growth slowed and became negative in the back half of 2022. Declines in inflation should follow. At that point, park goers can expect more normal changes in prices over time,” Luther said in a Newsweek interview.
That’s a good thing because many loyal Disney guests have become disenchanted with how rapidly costs have increased and more price hikes would likely send many over the edge. Many are already looking elsewhere for their next vacation, Disney couldn’t handle alienating any more of them.