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Robert Niles
Editor

The Disney/Obamacare story, and what's really driving employment in the theme park business

Published: October 2, 2013 at 10:32 PM

The Walt Disney Company got some nice press around the Web today following the disclosure that it would promote more than 400 part-time employees to full-time status, a move that was attributed to new requirements under the U.S. federal Affordable Care Act (also known as the "Obamacare" law).

Some background: The basic premise behind the law is "no more freeloading." You've got to pay for health insurance, either by having your employer pay for it on your behalf, or by buying it yourself. So the law requires companies to buy health insurance for employees who work over a certain number of hours a year.

Walt Disney World has decided to just go ahead and bump some of those eligible employees up to full-time status, which means more hours and benefits for those workers. But a story earlier this year reported that SeaWorld would cut hours for some of its employees in the same situation, so that it wouldn't be required to pay for their health insurance.

Opponents of the administration jumped all over the SeaWorld story, citing it as evidence that Obamacare would hurt employees. Now, supporters of the administration are crowing about Disney, and how this shows Obamacare is helping employees get better deals at work.

But changes in health care laws don't drive employers' decisions about adding or cutting hours nearly as much as one other factor does — how much money the company's making.

If there's money on the table to be had, companies will add the workers and hours they need to collect it. If there's no money there, hours and employees soon will be going away, too.

A little perspective here. The 400-some employees moving up to full time at Disney represent fewer than two percent of the resort's part-time workers. And Disney moves some part-timers to full time nearly every year at the end of summer. (Long ago, when I worked at Walt Disney World, I started as a "CT" [casual temporary] — part-time, seasonal — employee, but moved to full time at the end of the summer following my senior year in college. And no one outside his family knew who Barack Obama was back then.)

Obamacare or no, Disney's theme parks are having a good year, by all financial reports. So Disney can afford to bump up its employees' hours to take advantage and try keep its customers coming back. SeaWorld's suffered a tough year for attendance, so it shouldn't surprise anyone that company might be less willing to add hours, and might even be looking to cut.

What we don't know yet is how many employee hours Disney or SeaWorld is adding or cutting overall at their parks. That's what will really tell us about what's happening to employment. (In fact, SeaWorld is adding some full-time employees, too.) The new health care law might encourage a company to push a few part-time employees near the cut-off threshold to one side or the other of that cut-off. But those all-important revenue numbers will determine how many employee hours a company adds or cuts overall.

I'm sure that companies that don't want to admit they're having a tough time might be perfectly happy to let Obamacare take the blame for their layoffs or cutbacks. And I'm also sure that companies that are adding jobs and hours are very happy for whatever positive press others are willing to give them, thanks to this being such as hot issue at the moment.

But Obamacare isn't really the big issue here. Whatever effect that law might have is nothing compared to the direction of the overall economy. When people who are willing to spend have money in their hands, companies add jobs and hours. When people willing to spend don't have cash on hand, workers get cut. (That's one the reasons why the recovery from the most recent US recession has been so sluggish. The increases in income have been going mostly to very wealthy Americans, who are less likely to spend that cash than working-class Americans would be.)

If people have money and want to spend it at Orlando-area theme parks, SeaWorld and Disney will be adding jobs and hours. And if people don't have cash, or decide to spend it elsewhere, life's gonna get tougher for people in Central Florida. That's the simple, and more accurate, story.

Replies (10)

Anon Mouse

Published: October 3, 2013 at 6:29 AM

The bad thing about Obamacare is that the company that hires part-time workers must keep them below 30 hours. The casual full-time worker no longer exists. The company has less flexibility to offer their own medical plans since all plans must be in compliance with federal regulations. It used to be that some part-time or casual full-time workers may get some medical benefits even if barebones. That isn't the case anymore especially since their benefits will exceed their hourly pay. Why hire someone to work minimum wage when their medical benefits exceed the minimum wage? The wage/benefit disparity doesn't exist as much with full-time salaried employees.

Thus, Obamacare will keep wages low with lower weekly hours. It will cause the re-categorization of all casual workers to part-timers. Deprive many part-time workers basic company medical insurance by putting them into the state healthcare exchanges that many can't afford with high premiums and deductibles.

Disney can afford to upgrade 400 workers. That isn't a lot for a company of that size. Going forward, I would suspect Disney is keeping their part-time workers to under 30 hours.

99.145.62.29

Published: October 3, 2013 at 6:46 AM

I appreciate your thoughtful analysis on this. Having formerly worked in corporate and marketing communications, I am quite familiar with how releasing earnings reports were always accompanied by product promotion ("the reason McDonald's was profitable this quarter was the French Fry promotion was successful") when in fact business P/L is a function of many factors. I am sure any negative announcements from companies that oppose the President will pepper their bad news with "blame Obamacare." But I suspect over time as they do better they'll credit their great products, brilliant management, etc. While the general media may fail to probe these claims, at least you have dug down to the more likely scenario.

And all that said, I'm an independent contractor to many companies providing them vital services that enable their enterprises to succeed. Obamacare is cutting my monthly healthcare premiums by more than $100 (even with a better plan). I will be spending that money elsewhere, less with Blue Cross/Blue Shield.

Cory R

Published: October 3, 2013 at 8:03 AM

Go Disney! While I agree with Robert that this move speaks more to how well Disney is doing financially compared to SeaWorld and Busch Gardens, it does make Disney look very good and SeaWorld look even worse in terms of media attention. The media sees SeaWorld as afraid of Obamacare and reacting by capping hours. I have many friends that work at Busch Gardens who have been severly affected by the part-time hours cap. For Howl-O-Scream, they operate anywhere from 30-50 different private or group VIP tours of the event. Those tour guides are usually the same guides who do the Serengeti Safari tours during the day, but they are all part-time, so since they can't work more than 28 hours per week, Busch has had to hire people just to do the HOS tours, which means inexperienced guides leading VIP tours that cost 200 bucks a person. Meanwhile, Disney comes across as embracing Obamacare by taking advantage of the situation to promote 400+ part-time employee to full-time. It may be less than 2 percent of part-timers, but those 400 people are very happy campers.

As for Disney cutting the rest of the part-timers hours, I know a couple people who work there part-time who did not get promoted but are still getting 30-40 hours a week. It all depends on the line-of business. Different line-of-business have different budgets and different amounts of hours they can give. So Attractions part timers may see their hours cut below 30, but some one who works in Animal Programs or Resort Activities part time may still be able to get 32 plus hours, at least some weeks. Granted, come next year, those hours may accumulate to the point that they have to change things up. Disney made the decision on which part timers to promote based on anyone who had worked 1500 hours or more in the last year, according to one of the articles. Which means when CMs who havent been their a year but have been working 30+ hours a week consistently hit that 1500 hour mark, they too may get promoted.

Anon Mouse

Published: October 3, 2013 at 8:42 AM

Not so fast. "Walt Disney World has offered to elevate 427 part-time workers to full-time status because those employees have worked enough hours during the past year to qualify as full-timers under the federal Affordable Care Act.

But officials with the Service Trades Council, the coalition of unions that represents more than 30,000 full-time and part-time workers at Disney World, say they are HESITANT to accept the offer because it could mean elevating some employees over more-senior part-timers who have been waiting for full-time positions."

The UNION will stop it. How's that for the gesture?

Brian Emery

Published: October 3, 2013 at 9:08 AM

First I want to thank Mr. Robert for actually using the correct name of the law… There is no such thing as ObamaCare… The Affordable Care Act was a Bill that passed the House and Senate. Then made into a Law when the President signed it….

If the Republicans Grand Old Party call it by the proper name and not try to scare folks by saying Obamacare like it is something bad and evil, maybe we could move forward in the good old USA.

Anyway I digress; companies were already trending to move workers to part time from full time before this new law called the Affordable Care Act was enacted.. So this is great for Disney workers.

I applaud Disney for leading in the correct direction. And I will now visit WDW in April along with my Universal Trip.

Cory R

Published: October 3, 2013 at 11:25 AM

In response to Anon Mouse's comment about the union potentially blocking the deal, while I think you are right, that very well could happen, I do not agree with it. I do not think seniority should always come first. I do not think someone who has worked there 20 years but currently only works 10 hours a week deserves to get promoted over someone who has only been there a year or two but works 30 hours a week. That person who works 30 hours a week clearly has more added value to the operation than the person who works 10 hours. It would be harder on the operation to lose the 30 hr/week employee than the 10 hr/week employee, if one were to leave due to not being promoted. There must be a reason the one person works 30 hours a week and the other works only 10. Either the operation schedules person a over person b because they are more valuable to the operation; or maybe person b has a second job or is retired or wealthy, and doesn't need the Disney job as a main source of income. Either way, person a thus deserves or may need the promotion more.

This scenario is very common at Disney World. There are a lot of retired folks who are CMs who work a day or two a week for the fun of it, and have many years of seniority, or they have second full-time jobs and work a day or two a week at Disney just to keep their status and get the benefits (like free park admission). A lot of these people have a good number of years of seniority as well. These groups don't need a promotion though. They are likely not looking for a promotion. The CM who has been there a year or two, works 30+ hours a week, works their but off to prove themselves to Disney and add the most value possible to the operation, who rely on this as their main (or only) job, deserve the promotion. And these are the people who seem to be the ones getting the 'ACA promotion.' So I really hope the union does accept the offer.

50.89.13.35

Published: October 3, 2013 at 4:29 PM

Um no, the unions can't block the deal. Florida is a right to work state. If a CM is offered the opportunity to become a full time employee they can take the opportunity. No union can stop that from happening.
Charles Reichley

Published: October 3, 2013 at 6:39 PM

The union story (I don't know if it is true or not) does illustrate an underlying issue here. According to that story, the reason these 427 workers are getting pushed to full-time status is that they already worked too many hours, and therefore will be treated as full-time for Obamacare anyway.

In other words, apparently they hit the 30-hour mark, and so they will get additional hours, over more senior people who did not quite hit 30 hours yet.

Now, why would Disney summarily promote these 427 and none of the more senior members? It appears to be BECAUSE of the health care law. If they gave other people full-time status, then they'd have to give THOSE people health care, PLUS the 427 that now qualify.

IN fact, they may well have worked hard to keep the other employees BELOW 30 hours, just so they wouldn't have to pay their health care. Without the law, maybe they'd have given 2000 workers a few more hours a week, instead of giving 400 workers an extra 10 hours a week. Or maybe not.

But it would be absurd to think that the requirement to offer an expensive health insurance package arbitrarily at a specific hour mark would NOT impact a company's decision about how many hours to let people work.

Health insurance used to be one of several benefits that a company might offer as part of a package, one that a good company might be able to get cheaper than an individual would, and therefore could offer in lieu of a larger paycheck. Like the company spends $5000, but the employee gets $8000 worth of benefit. Not any more.

206.53.88.70

Published: October 5, 2013 at 4:08 AM

I am a few days late coming to this, and just wanted to add my two cents, but wanted to emphasize first that I am very impressed with the overall balanced quality and intelligence of both the article and comments. It's so nice to see and our leaders could learn from this example.

I just wanted to throw in another perspective: Employees of Disney in other countries may very well be laughing at our conversation. While I am not a Disney employee (though I do own stock), Disneyland Paris employees I believe works under France's system. Yes, France has plenty of different problems of their own, but at least in that country, people get basic insurance from nonprofit sickness funds that effectively operate as extensions of the state, then have the option to purchase supplemental insurance on their own. (It’s as if everybody is enrolled in Medicare.) In France, virtually all people have insurance that covers virtually all legitimate medical services. The government is heavily involved in regulating prices and setting national budgets. And people pay for health insurance through a combination of private payments and what are, by American standards, substantial taxes.

So I suppose one could say there are pluses and minuses to all systems. But I can say that for me, I am pleased that Congress passed, the President signed into law, and the Supreme Court found Constitutional our new Affordable Health Care Act. And this is because it opens up more opportunities and choices for companies like Disney, its employees, as well as all Americans. Not just the wealthy ones.

Peter Heaney

Published: October 5, 2013 at 4:13 AM

I am a few days late coming to this, and just wanted to add my two cents, but wanted to emphasize first that I am very impressed with the overall balanced quality and intelligence of both the article and comments. It's so nice to see and our leaders could learn from this example.

I just wanted to throw in another perspective: Employees of Disney in other countries may very well be laughing at our conversation. While I am not a Disney employee (though I do own stock), Disneyland Paris employees I believe works under France's system. Yes, France has plenty of different problems of their own, but at least in that country, people get basic insurance from nonprofit sickness funds that effectively operate as extensions of the state, then have the option to purchase supplemental insurance on their own. (It’s as if everybody is enrolled in Medicare.) In France, virtually all people have insurance that covers virtually all legitimate medical services. The government is heavily involved in regulating prices and setting national budgets. And people pay for health insurance through a combination of private payments and what are, by American standards, substantial taxes.

So I suppose one could say there are pluses and minuses to all systems. But I can say that for me, I am pleased that Congress passed, the President signed into law, and the Supreme Court found Constitutional our new Affordable Health Care Act. And this is because it opens up more opportunities and choices for companies like Disney, its employees, as well as all Americans. Not just the wealthy ones.

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