Disney’s Labor Union Issues – A Private-Sector Rarity

by Ray Keating

News/Analysis

July 18, 2024

(Free content for a short period. Please subscribe today!)

The Walt Disney Company is in the midst of negotiating with assorted labor unions that represent some 14,000 workers at Disneyland in California. And it was reported on late Friday (July 19) that union members overwhelmingly voted to authorize a strike. Disney and four unions are in the midst of negotiations, which reportedly resume on July 22-23.

According to the Orange County Register, “The union coalition — which has been negotiating with Disney over a new contract since April — represents ride operators, store clerks, custodians, candy makers, ticket takers, parking attendants, tram drivers and other cast members, Disney parlance for employees. The Disneyland contract covering approximately 9,000 employees expired June 16. The Disney California Adventure and Downtown Disney contracts covering approximately 5,000 employees expire on September 30.”

The last time there was a strike by workers at Disneyland was forty years ago, when nearly 2,000 workers walked off the job in September 1984, according to CNBC.

The role of labor unions in our economy has changed markedly over the decades. Indeed, Disney is in an increasingly unique position among businesses, as the percent of private wage and salary workers that were union members in 2023 registered 6.0 percent. That matched the low set in 2022, according to data going back to 1973 from UnionStats.com. In 1973, the share of union membership among private sector workers came in at 24.3 percent, and in 1984, it was 15.3 percent. For good measure, assorted other reports put the estimate for labor union membership at 33 percent to 35 percent in the mid-1950s. Again, that compared to 6.0 percent in 2023.

While a lot gets said about labor unions, too often little is tied to actual economics. In fact, it pays to understand the basic economics of labor unions. As I explained in my book, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist: “By restricting the supply of labor at various businesses and in assorted industries – thanks to governmental protections – labor unions push wages above their competitive levels. How do unions limit the supply of labor? By raising the price of labor, employers will purchase less labor. And consumers, nonunion workers, and businesses pay the price.”

In the end, when compensation is delinked from productivity and value provided in the market, increases in compensation raise costs. As a result, ironically, workers can see their jobs disappear due to, for example, investments in technology and automation, and/or responsibilities being redistributed. Also, consumers – in this case, Disney guests – experience higher costs. Of course, there can be an irony here as well, as many individuals who support the labor unions, usually not knowing the details of the situation, also complain about higher costs when visiting Disneyland.

Yes, labor union membership has dwindled over the years in the private sector to the point of being largely irrelevant. But among the remaining businesses or industries with unionized workforces, unions are still very relevant. Just ask Disney.

__________

Ray Keating is the editor, publisher and economist for DisneyBizJournal; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books.

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.

Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at

https://www.patreon.com/pastorstephengrantfellowship.

• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now. The Alliance of Saint Michael novels – Cathedral and Subversion – are at Amazon.

• Keating’s Weekly Economist books series at Amazon.com.

• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.