Minimum Wage increase and Disneyland

April 4, 2016, 10:18 AM

As most of you know, California over the next few years will raise its minimum wage to $15. While there are efforts to raise the rate to $15 nationwide, as of right now that seems unlikely. Right now Flordia's minimum wage is $8.05. Assuming the Flordia and Federal Minimum wage don't change, what do you think prices will look like at Disneyland compared to Disney World? We all know prices at both resorts will continue to rise, but will Disney use this as a reason for larger hikes at Disneyland? Or will Disney do its best to keep costs similar no matter the wage disparity?

Replies (1)

April 5, 2016, 7:08 AM

Prices are set by consumer demand, not by producer expense. So Disney will continue to charge whatever it believes that Disney guests will pay. The only difference will be that if labor expenses are lower in Florida, Disney's profits will be higher there.

But given the high percentage of locals among Disneyland visitors, and the well-demonstrated stimulative effect that minimum wage increases have on the economy, it's also possible that there will be an increase in free-spending visitors at Disneyland as a result of this increase boosting the local economy. So that could lead to an increase in prices on the west coast. But it will be because of the change in demand, not the change in supply.

One thing to keep in mind, though. This minimum wage increase is gradual. It's just 50 cents an hour next year, with increases leading up to $15/hour in six years. The minimum wage will be indexed to inflation after that. There's no sudden jump that would be a shock to anyone's business.

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