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Unions at Disney World win 37% pay hikes in tentative labor deal

A 2022 file photo of iconic Cinderella Castle in the Magic Kingdom in Disney World, where a bear sighting shut down parts of the park on September 18. (Photo by Bryan R. Smith / AFP/Getty Images)

(CNN) — About 32,000 hourly workers at Disney World will get raises equal to $3 an hour by the end of the year, and most will get raises of about 37% of their current pay by 2026 under a tentative five-year labor deal reached with a group of unions on the property Thursday.

About 75% of the full-time hourly workers covered under the deal currently get about $15 an hour, according to the unions. The employees do everything from perform as characters to staff restaurants and shops, drive buses, trams and monorails as well as work at front desks and perform hotel housekeeping duties.

They would receive a retroactive pay increase to $16 an hour back to October of 2022, and see their current pay increase to $17 an hour upon ratification of the deal. It would go to a minimum of $18 an hour as of December 3.

They would also get a raise of 50 cents an hour in December of 2024, and an additional $1 an hour in 2025 and 2026.

The company’s previous offer would have given them only an initial $1 an hour raise, along with four subsequent raises of an additional $1 an hour over each year of the five-year contract.

So Disney isn’t agreeing to pay significantly more than that previous offer over the course of the five-year contract, with raises totaling $5.50 an hour rather than $5 an hour. But the unions were able to get a much more front-loaded pay package in this tentative deal.

About 96% of membership who voted on that previous offer rejected it, following the recommendation of their union leadership.

“The company finally heard voices of the cast members,” Matt Hollis, the president of the Service Trades Council Union, the collection of unions that are negotiating with Disney management, said in an interview with CNN Business. “I can’t help but believe the overwhelming result of the previous vote played a role in reaching this agreement. I think an overwhelming majority of cast members will see this as a win.”

The company said it was pleased to be able to reach the tentative agreement and hopeful that will be ratified.

“Our cast members are central to Walt Disney World’s enduring magic,” said Jeff Vahle, president of Walt Disney World Resort in a statement. “Disney is proud to offer an industry-leading employment package that includes comprehensive benefits and affordable medical coverage, in addition to 100 percent paid tuition for higher education for hourly employees through the Disney Aspire program.”

Disney recently announced plans to cut about 7,000 jobs across the company. But Hollis said the unions don’t believe the hourly workers covered by this contract will be affected by the layoffs. In fact, Disney has been struggling to fill some of the job openings it has at Disney World.

The union has argued that the high cost of living and rapidly rising prices make living in central Florida unaffordable for many of the workers under the current wage structure.

While the company’s media and entertainment division lost $10 million in the most recent fiscal quarter ending December 31, its parks, experiences and products division reported a $3 billion operating profit. Attendance at its domestic parks was up 11% from a year earlier, and the average visitor was spending 8% more. Hotel occupancy rose to 88% from 73% a year earlier.

While the union had never scheduled a strike vote or threatened a strike, this was not a time that Disney wanted to risk bookings at the park by talk of a possible work stoppage.

The vote to ratify the contract is set to be completed by next Wednesday evening.