Few global companies enjoy as much public good will as the Walt Disney Company. The entertainment giant regularly ranks highly on lists of the most admired or trusted companies, including ones from Forbes and Fortune.
CEO Robert Iger, who reportedly is being encouraged to run for president in 2020, would be able to use the company’s image to his advantage on the campaign trail, according to The New York Times. Of course, Disney representatives say he’s not running; if so, one has to wonder why Iger is hinting at it so often, as reported in such other mainstream publications as the Guardian and The Hollywood Reporter.
Iger’s progressive positions on gun control, immigration and the Paris Accords certainly are in harmony with the Democratic base. But Iger may have a more difficult time explaining away his company’s treatment of his theme park workforce on his watch, and some of the communities where they live.
Rights and lefts
Once upon a time the Walt Disney Company was seen as rather right wing: anti-union, staunchly Republican and sometimes ruthless in its business dealings. Walt Disney himself has been characterized as everything from a fascist to a Nazi, although this seems to be baseless. Yet without doubt, Walt Disney was a conservative, aligned with California’s then powerful right-wing political machine. And he was also a ruthless businessman who opposed unionization and drove hard bargains to assemble the real estate for his parks in Anaheim and Florida. In some circles he is still regarded, as critic John West put it, as “Hollywood’s most influential conservative film maker,” largely for the pro-family, anti-big government and patriotic memes common in his movies and television shows.
Today the right-wing label no longer for Disney, which controls ABC, ESPN and other large media properties. The company has allowed a same sex kiss in a children’s cartoon, to the horror of social conservatives. Slate applauds Disney’s “progressive inclusive” shift with the plethora of plucky female heroines its introduced over the past few decades (Moana, Belle, Mulan), as well as casting the male “hunk” in the hit Frozen as the ultimate villain. This probably would have Walt Disney spinning in his grave.
Increasingly Disney’s script seems more MSNBC than Walt, with the late-night ABC host Jimmy Kimmel now a darling of the anti-Trump resistance. Kimmel’s ratings are a far cry from those of the apolitical Johnny Carson, but they are still respectable.
The more things change…
Yet if Disney’s public persona has changed, its fundamental corporate culture seems to have not been so transformed. Workers at its theme parks in Orlando and Anaheim complain of low wages and exploitative management practices that belie the company’s squishy clean image and could pose a threat to any attempt by Iger to campaign as a progressive Democrat.
Out of the 36,000 unionized Disney workers in the Orlando area, 23,000 make less than $12 an hour and only 3,000 make over $15 an hour, according to labor union officials. To afford a one-bedroom apartment in the Orlando area, a worker would need to be paid $15.87 an hour, according to the National Low Income Housing Coalition. Workers complain that management is miserly with raises even for longtime employees.
Earlier this year Disney was forced by the U.S. Labor Department to pay $3.8 million in back wages to over 16,000 employees in Florida because it had deducted a uniform fee that had caused workers’ compensation to fall below the minimum wage, as well as failed to pay them for work performed before and after their shifts.
A Disney spokesman said the company agrees workers there deserve a raise – in contract negotiations, it’s offering an increase of “up to 5%” over the next two years.
In Anaheim, Calif., home to venerable old Disneyland, wages are also low, averaging near $11.07 an hour for the first four years, with a meager rise to $12.57 for those with five to nine years of experience. And the cost of living in Anaheim is more than 50% higher than in Orlando.
Few tourists realize that around the magic kingdom exists a city with an extraordinarily high concentration of poverty. A majority Hispanic city of 350,000, some 40% of the population of Anaheim is living in or near poverty, according to the United Way, compared to 29% for Orange County and 31% for California as a whole.
Disney’s low wages contribute to the poverty problem, as well as growing homelessness, says Mayor Tom Tait, a Republican elected with strong Hispanic support. Anaheim and its surrounding cities, Orange and Santa Ana, now host a homeless population estimated at over 4,700, some subsisting just a few miles from the park near the grounds of Anaheim Stadium, the home of the Angels.
The mayor says the city doesn’t have the resources to deal adequately with poverty, in part, as a recent Los Angeles Times series asserts, because its biggest corporate citizen has aggressively minimized its tax burden. The company has spent millions bankrolling politicians friendly to it. As a result, the Times reports, Disney pays very little directly into the city’s coffers and has won tax exemptions for hotels being built around the park. The city leases Disney’s new garage, which the city built for $108.2 million, for $1 year. “They have dominated the city,” Tait says. “They are not side players, they are the directors.”
Overall, reports the Times, the Mouse has gained tax breaks, subsidies, rebates and incentives worth north of $1 billion. Disney disputes the accuracy of the tally. A one-dollar fee per ticket -- each of which costs over $100 -- would help the city close its budget deficit, Tait says. Disney also tried to push a highly impractical $300 million streetcar deal that would have shuttled passengers from the underutilized ARTIC train station to the park. Only the opposition of Tait and his allies, who saw this a diversion from more critical transportation needs, stopped what would have been a project that largely would have only benefited Disney.
Disney, for its part, claims to be a good corporate citizen, paying some $125 million a year in taxes, bonds, levies and fees, making it the city’s largest taxpayer. Yet Tait and city officials suggest that most of these taxes go to the state and elsewhere.
Disney’s PR people say the Times series is unfair; the Times says the company has not refuted it. Disney so objected to it that the company banned Times critics from press screenings for their latest movies. The movie ban was rescinded last week after a huge outcry by other media outlets.
Perhaps more reasonably, supporters of Disney counter that, despite its relatively low wages, the company remains the county’s largest employer and is simply doing what corporations are supposed to do -- maximize profits. And to be sure, the company’s 30,000 jobs, roughly 19% of the city’s total, would be greatly missed if the Park shut down. And with an estimated $2 billion in new investments, Disney remains a critical linchpin of Orange County’s heavily tourist-dependent economy.
Don’t tell the Bernie Bros
The logic used to defend Disney may be persuasive to friendly political operatives, business groups and, no doubt, Iger’s own shareholders, to whom the company returned $2.3 billion in dividends last year. Iger, who took in $44 million in compensation last year, will have a tougher time explaining the labor issues to the Bernie Bros.
Last year during a presidential campaign rally in Anaheim, Sen. Sanders lashed out at Iger for pocketing such a massive paycheck while paying poverty wages to so many. He particularly attacked the company for laying off 250 of its Orlando tech employees, replacing them with foreign H-1B visa holders from an Indian outsourcing firm. Some of the cashiered workers were asked to train their replacements before hitting the streets.
Of course, progressives will no doubt find Iger more attractive than his fellow businessman Trump, at least culturally and stylistically. But Trump is an unabashed capitalist in a decidedly capitalist party. Iger, if he chooses to run, will have to face an increasingly leftist, redistributionist segment of the Democratic base.
Given the likely ugliness that a presidential run would engender, Iger may decide it’s not worth taking any political dreams beyond the walls of the Magic Kingdom.
This piece originally appeared on Forbes.com.
Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.
Photo: hyku [CC BY-SA 2.0], via Wikimedia Commons
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I don't get it.
So I don't see how Disney could raise wages significantly even if they wanted to (and I suspect they DO want to). Wages are determined by park income, which is in turn set by the admission price x number of visitors. This figure has undoubtedly been tweaked to maximize revenue: if they lower the price they'll have more visitors but less revenue. And if they raise the price the number of visitors will decline, also resulting in less revenue.
So the only way they can raise wages is by hiring fewer employees and then paying them more. But I think even Mr. Kotkin realizes that this is a zero-sum game.
Re taxes: I think Disney should fully pay the cost of any municipal services it uses. Beyond that, I'm against taxes on businesses. For precisely the arithmetic illustrated above, any taxes Disney pays will come directly out of the hide of its employees. Thus a tax on Disney is in reality a tax on poor people.