“We feel like there’s always somebody else that will fill our spot,” Disneyland cast member Gabriel Sarracino told SFGATE, “and we’re just there.”
Sarracino has worked at the Disneyland Hotel for 15 years as a valet, parking cars and assisting guests with their luggage. For all of those 15 years, he’s earned minimum wage from Disney and supplemented his income with tips. But a recent decision from leadership that prevents valets from handling luggage has cut substantially into his earnings.
He’s now one of the 25,000 cast members, as Disneyland calls its employees, who are participating in the class action lawsuit against Disneyland that alleges the company is legally obligated to pay a living wage.
“I couldn’t make it on minimum wage, which is how much they pay me,” Sarracino explained. “If they are going to make changes where I have less opportunity for tips, then that’s half my income [gone].”
“I hope to someday buy a house,” he added. “That extra money — I should be able to invest in my community and help my children have an edge.”
Sarracino considers himself fortunate that his wife and two young children are getting by in affordable housing, but not every cast member at Disneyland can claim the same.
In fact, according to a survey of 5,000 cast members, many are experiencing difficult living conditions because of low pay. “Working for the Mouse,” a study by Occidental College and the Economic Roundtable published in February 2018, found that 11% of Disneyland employees reported experiencing homelessness in the previous two years, 68% were food insecure and 73% said they do not earn enough for basic living expenses. While many employees said they would like to take on second jobs, Disneyland often schedules most workers different hours every week, preventing them from doing so.
Other cast members sleep in their cars, or make two-hour drives each way to sleep at relatives’ homes or experience food insecurity, the New York Times found shortly after the survey was released.
“Every time we get to the end of the month, I have to choose what bills to pay,” Grace Torres said in that article. “We want kids, but there’s no way we’re going to do that when we can barely afford to feed ourselves.”
That may have all happened three years ago, but the time between then and now, including a pandemic and a surging real estate market, has not been kind to low-income earners.
“Unfortunately, those conditions still exist, if not more this year than they did in 2018,” Matt Bell, secretary-treasurer of UFCW 324, told SFGATE. That union currently represents about 2,500 retail workers in Disneyland’s shops. “The inflation … the cost of everything has gone up. Housing has gone up in Orange County.” Many of the workers Bell’s union represents, he said, have “massive commutes” because of how far away from the park they have to live to afford their housing.
“Especially around Disney,” Sarracino said, “[landlords are] always raising rent every time they can.”
In 2020, the Orange County Food Bank distributed an average of 6 million pounds of food monthly — roughly three times their previous monthly distribution high.
Discovering these living conditions for his members was the main reason Austin Lynch, Orange County coordinator for Unite Here Local 11, which represents about 2,700 employees of Disneyland’s hotels, started gathering signatures for an initiative in Anaheim. “The crux of the initiative was: if you are getting taxpayer subsidies in the resort area, then you should be paying a living wage,” he told SFGATE. “It was based on the reality that Disney has gotten hundreds of millions of dollars in tax giveaways over the years. In return, [they should] pay enough for people to live.”
That initiative became Measure L, which was voted into law in Anaheim in 2018 and states that any private business receiving city subsidies is required to raise employees’ wages to $18/hour by 2022, plus subsequent cost-of-living increases.
As the legislation gained momentum — according to Lynch, organizers got the “overwhelming support” of 25,000 signatures for Measure L in just two weeks — Disneyland made some major accommodations to its compensation structure, agreeing to a $15 per hour starting wage for cast members. Minimum wage in California is $14 per hour for companies with more than 26 employees.
The first park visitors are greeted by cast members inside Disneyland as the theme park reopens for the first time in more than a year on Friday, April 30, 2021.
Robert Gauthier/Los Angeles Times via Getty Imag
“We just think an injury to one is an injury to all,” Bell said. “We all fight together because we have to support each other. If Disney can pick one union off, then it’s a race to the bottom.” He attributes the success at the bargaining table surrounding Measure L and the passage of Measure L to the unions’ joint efforts. “While we don’t bargain at the same time, that solidarity will lift us all up all together,” he added. “I think we saw that with Measure L, because we all got some larger increases in our contracts those years.”
After Measure L was put on the ballot in Anaheim and Disneyland agreed to a $15 minimum wage, Walt Disney World made similar wage provisions for its cast members in Florida. “We do feel really proud of that,” Lynch said. “We think we got Disney to change their business model, to an extent.”
“But there were several thousand employees left behind,” he added, like Sarracino and the other hotel valets. “Some who were left out would have been covered by the law.”
That’s the reason Local 11 and other Disneyland employee unions gathered cast members to sue the company, alleging that Disney is receiving city subsidies and should be held to the payment structure under Measure L.
The suit, which was granted class action status in July, will determine whether $550 million contributed by Anaheim to construction of Disneyland’s Mickey and Friends garage constitutes a city subsidy. At the heart of the issue is whether Disney is taking a city subsidy because of the complicated way Anaheim is repaying municipal bonds it took out to pay for construction of the garage, which opened in 2000. The bonds are being repaid largely through taxes Disney pays and through hotel room taxes collected by the city as well. Randy Renick, the attorney who filed the class action suit, believes that repayment constitutes a city subsidy, since Disneyland keeps the revenue from the garage even though it was financed by the city.
“I think the issues here are simple: The voters demanded that companies like Disney, who take public handouts, pay their workers a living wage,” Renick told the Los Angeles Times. “Disney should not get a pass.”
Both Disneyland and the city of Anaheim deny that the company is receiving a city subsidy. The garage exists on Disney-owned land, but was built by the city, which retains ownership of the garage for the time being. Rather than calling that a subsidy to a business, the city views that $550 million as an investment in Anaheim’s future.
“We have a shared interest,” Mike Lyster, spokesman for the city of Anaheim, told SFGATE. “They have an interest in running successful theme parks, shopping, dining and hotels, and we have interest in seeing a thriving economy that is based on visitors.”
According to Lyster, the city decided to build the garage ahead of the 2001 opening of Disney California Adventure park because of the benefits that would come from those added visitors. “Building a parking structure facilitates more people coming to the parks and spending money in our city, which in turn generates revenue that we use to fund public safety, libraries and community centers,” he said.
Mickey and Friends was built by the city on land that Disneyland leases to Anaheim for $1 a year. In turn, Anaheim leases operations of the garage back to Disneyland for that same amount. When the bonds are repaid, ownership of the structure will revert to Disney.
“Disney operating it just makes sense for us,” Lyster explained. “We would have to have insurance and do regular upkeep on it. There are costs that come with operating a parking structure. So it’s actually in our interest to have them operate it because they bear those costs.”
He added that there is a precedent for the city to relinquish public land to private entities, as happened with Anaheim Packing House, a shopping and dining area in a renovated factory complex. Anaheim relinquished an adjacent street to the developer for private upkeep.
“That happens somewhat regularly,” Lyster said. “It may make economic sense for the city to do so. Somebody else may then take on the responsibility of maintaining a street, or maybe we have a parcel of land that we weren’t really using, but might be adjacent to a project that’s being developed. That way the developer then makes it part of their project and it becomes revenue producing for the city.”
The $550 million investment, Lyster said, has paid dividends. “We’ve only seen our revenue grow and grow each year,” he explained. “We see this as good debt because it has paid off with increasing revenue, primarily from hotel visits.” Those, he said, have more than tripled in Anaheim in the past 20 years. “That has been very significant for us to be able to serve our community.”
State law prohibits disclosure of taxes paid by any one business, but, as Lyster explained, “Disney is our largest provider of our three biggest sources of revenue, and those are in this order, hotel tax, sales tax and property tax.”
Lyster also pointed to Disney’s support of its employees during the pandemic, in addition to Disney’s commitment to a $15 starting wage for all union and non-union employees. When the pandemic forced the closure of Disneyland in March 2020, the company paid employees’ first month’s wages. It has also extended health insurance benefits to all its cast members and still does now to the employees who haven’t returned to work. “No bones about it,” Lynch said. “They deserve credit for that.”
A Disneyland employee forms a line for visitors to take pictures in front of Sleeping Beauty Castle in Anaheim, CA, on Friday, April 30, 2021.
MediaNews Group/Orange County Re/MediaNews Group via Getty Images
During the pandemic closure of Disneyland, Disney also laid off more than 30,000 cast members — some who were nearing retirement — and furloughed a significant amount more.
According to Disney officials, the company also provides support to cast members in the form of employee perks like public transportation subsidies, child care and elder care support, and additional paid sick time during the pandemic. Through the Disney Aspire program, the company completely covers costs associated with cast member education through programs ranging from GED courses to master’s degrees.
Disneyland is also a major donor to the Orange County Food Bank — the park donated 200 tons of food to them in 2020, according to Disneyland officials — and company employees regularly volunteer there through Disney’s VoluntEAR program. In December, Disneyland hosted a food drive that distributed food to 1,500 Anaheim families.
Disneyland employs about 32,000 cast members, per the OC Register. About 19,000 of them have returned to work since the parks reopened in April. An estimated 80% of the company’s employees belong to one of several dozen unions that represent different sectors, but there are thousands of non-union employees at the park, though when asked, Disneyland did not clarify which roles they occupy.
“I believe that their model changed in a more positive way and that the old Disney wouldn’t necessarily have done that,” Lynch said in reference to that health insurance coverage. “The new Disney does deserve credit for making those decisions. But they still have several thousand workers, including subcontracted Sodexo workers, who are still at minimum wage, including thousands of tip workers.”
Tips are always variable, but in the case of a worker like Sarracino, it’s actually Disney that impacts what those tips can be. The company’s recent decision to prevent valets from handling baggage has taken away a substantial amount of Sarracino’s earnings through luggage tips, which he said tend to be larger than — or at least supplemental to — tips from parking a guest’s car.
“At the snap of their fingers, Disney insists on making changes that take half of the valets’ tipped income away,” Lynch added.
Bell of UFCW Local 324 said he believes that so many cast members stick it out through low wages (and increasing stress, especially through pandemic mask enforcement) for the same reason people pay more than $200 per ticket for a day in the park: because it brings them joy to be at Disneyland.
“There’s a lot of loyalty to Disney and the Disney brand just as consumers love the idea of Disney and love the product that they sell,” Bell said. “The cast members enjoy dealing with kids every day and seeing guests and smiling faces and representing Disney. That feeling in itself is why they continue to work for Disney.”
Sarracino explained that the excitement people have on arrival is a big part of why he’s spent the past 15 years working at the Disneyland Hotel. “I love just seeing people come in, and seeing their faces, and the kids coming out of cars,” he said. “I’ve interacted with 100,000 people and had conversations with every one of them.”
But underneath cast members’ joyful experiences, Bell added, are questions. “When you try to connect that [feeling] to the compensation, there is clearly, in discussions with our members, this rift. They’re like, ‘I love my job and I want to do it, and I know this company can afford to pay me, but they choose not to, so my living reality is incredibly difficult, but I still love my job.’”
In a quarterly earnings call Aug. 12, Disney reported more than a $3 billion increase in revenue for that quarter year-over-year. In a February 2021 quarterly earnings call, Disney Chief Financial Officer Christine McCarthy reported that at Walt Disney World, people spent more money in the parks per day in 2020 than they did in 2019. “We want to have people have a great time when they’re in our parks,” she said on the call. “When they have a good time they tend to spend more money.”
Everyone, from Disney leadership to company employees to guests, knows that the cast members are an essential part of creating a positive park experience that encourages people to spend that money. Walt Disney said as much when he said, “You can design and create and build the most wonderful place in the world. But it takes people to make the dream a reality.”
What Bell senses from his members, he said, is “frustration or resentment that the company will not pay them a proper wage when they can afford to.”
The biggest cluster of unions, covering about 10,000 Disneyland workers, is in contract bargaining now, and according to Lynch, Local 11’s contract comes up for renegotiation in January. “So there’s all sorts of issues swirling,” he said, “and lots of issues to be worked out at Disney right now.”
Even if that contract negotiation concludes with substantially improved terms for workers, Lynch said the unions still intend to pursue the class action suit. “There’s always going to be another group of people who aren’t getting protected adequately,” he explained.
“We believe that will prevail and Disney will have to pay the proper wage,” Bell said. “Right now, it’s supposed to be $17 an hour, and in 2022, it’ll be $18. That is not going to make our members rich, that will just make it so that maybe now they can afford to pay their rent, or they can put food on the table. They’re not making those horrible decisions of medicine or food.”