WDW has 74,000 employees. Lets just assume incorrectly that every single one of them made $11.00 per hour. Lets also assume they each were full time workers at 2,000 per year. Now lets give each of them a $4.00 raise per hour. We will ignore, for now:
- the percentage of workers earning more than $11.00 per hour
- the percentage of workers who are part time
The total cost of the raise to Disney in this scenario is $592 million dollars in 2021 when it actually goes into full effect. This is a lot of money.
Lets also understand Disney is a $175 billion dollar company that had its tax rate go effectively fro 33% this year to 22% under the new corporate tax laws. Lets assume this will add roughly 25% annually to the free cash flow for the company (this is the reported number by analysts). Since 2015 Disney has had annual free cash flows of 7.12 billion, 8.36 billion, 8.72 billion, for '15, '16, and '17, respectively. 2018 is on pace to be a shade over 10 billion.
The new tax rate turns into a free gift of roughly $2.5 billion dollars in cash to Disney annually.
Given the gift of a minimum of $2.5 billion additional profit each year Disney did the absolute right thing and raised its lowest employees pay to $15 per hour. This raise, even judging its near-max cost to the company, takes up about 21% of the new $2.5 billion dollars the government gifted them annually. I applaud Disney for making the decision to use a fraction of this money to better their workers' lives. I'm sure most of us do.
But they didn't do that with the money. They gave a raise 3 years into the future (when the total savings from the tax plan will be $7.5 billion conservatively by that time) and then immediately began raising the prices of almost everything on property then pointing to the employee raises as the reasoning. Other people on these boards are doing the same thing. "Of course they are raising everything, they gave huge raises this year to the dear CMs." Its nonsense. The raises haven't even kicked in but the price hikes sure did. The tax savings are already hitting the bottom line and won't stop.
Lets call a spade a spade and just be honest that the company is being very greedy in a time where the business environment has never been better for them. You can continue to wave your pompoms and that is certainly your right but its just so silly. I don't get why you are so pro-everything that happens at WDW but you don't even go to the parks to support them.
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