The senator and other critics say the company is forgoing government subsidies and tax breaks to avoid wage hikes

The Walt Disney Company came under heavy fire on Thursday for a decision to walk away from hundreds of millions of dollars in subsidies and tax breaks for its southern California theme parks, a move critics are characterizing as an extraordinary last-ditch effort to avoid paying a living wage to thousands of workers.

Leading the charge, Senator Bernie Sanders accused the company of acting out of fear that voters in Anaheim, Disney’s host city, will pass a living wage ordinance in November. The ordinance, applicable to any large company receiving municipal tax breaks, would require Disneyland and the neighboring Disney California Adventure to pay all 30,000 employees at least $15 an hour, rising to $18 an hour by 2022 and keeping pace with inflation thereafter.

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Sanders, a champion for low-wage workers nationwide, told the Guardian it was time for Disney to “get off of welfare and pay all of its workers a living wage”.

“Disney is so nervous that the living wage ballot initiative in Anaheim is going to pass,” he charged, “it would rather end some of the corporate welfare it receives from local taxpayers than pay all 30,000 of its workers decent wages.”

Facing heavy pressure from unions, local politicians and public opinion, Disney agreed to a $15 wage for about a third of its workers last month and is continuing to negotiate with unions representing roughly another third. It has also promised to pay minimum-wage non-union workers, estimated to number in the low thousands, $15.75 an hour starting in January. The company has vigorously opposed the ballot ordinance, however, despite a barrage of negative publicity following a survey that found that thousands of Disney workers are subsisting on food stamps and living out of their cars.

Sanders, who held a rally at Disneyland in June, noted that the company made about $9bn in net profit last year and that Robert Iger, its chief executive, has been offered a compensation package that could earn him as much as $423m over the next four years.

In response, a Disney spokeswoman Liz Jaeger told the Guardian: “Mr Sanders continues to distort facts to grab headlines … [He] should focus on his own state of Vermont where the minimum wage is $10.50/hour.”

Disney made no mention of the living wage ordinance in a letter it wrote to the Anaheim city council on Tuesday, alluding only to an “adversarial climate” and a “difficult working relationship with the city”. The company’s immediate complaint was about a threat by Anaheim not to go through with a $267m rebate package on a new luxury hotel at Disneyland.

Media commentators across the country, however, saw the wage issue as far more significant. Ray Baker, a television and radio host from Baltimore tweeted: “Shorter version of this story. When faced with the possibility of paying a living wage, Disney would rather pay taxes.”

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Disney’s decision to tear up its existing agreements may be a risky move not just because of the immediate loss in subsidies but also because it could expose the company to a city ticket tax that it has worked strenuously to avoid.

The company, by far the biggest employer and taxpayer in Anaheim, has wielded tremendous clout with a generally pro-business city council since the theme park was first built in 1955. Recently, however, Anaheim’s population has become more diverse and more liberal, leading to a shift in the local balance of power and a much more skeptical approach to Disney’s corporate benefits. The story of a night janitor found dead in her car was particularly damaging to the company.

It was not clear from the letter, written by the Disneyland resort president, Josh D’Amaro, whether the company wanted to negotiate a new deal with the city, indicating only its desire for “cooperation and goodwill”.

Christopher Duarte, the local president of the Workers United union that represents the resort’s 7,000 food service workers, the largest single group of employees, told the Guardian it wasn’t clear to him what exactly Disney was relinquishing or why. “Can they even exit the agreement that they have with the city?” he asked. “We don’t know what the point of this is. But it does feel like a dodge for the workers.”



