Starbucks to Raise Wages, But Not For Unionized Employees

Starbucks Employee stock photo
Jason Whitman / iStock.com

Starbucks recently announced it will raise its employees’ wages and invest $1 billion this fiscal year to increase pay, modernize training and collaboration and store innovation. However, these raises won’t apply to unionized workers.

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“We set out to restore our partners’ trust and belief in Starbucks by listening to their hopes, frustrations and ideas. Today, we announced significant investments in the partner experience, inspired by what they had to say. It is just the first step in building a different kind of company together,” CEO Howard Schultz wrote in a LinkedIn post.

Starbucks said it will raise wages to $15 an hour this summer, effective August 1, and average hourly pay at Starbucks will be nearly $17 an hour nationally. All partners hired on or before May 2 will get either a 3% raise or $15 per hour, whichever is higher, according to a press release.

However, on a May 3 investor call, Schultz said “partners at Starbucks U.S. company-operated stores, where we have the right to unilaterally make these changes, will receive these wages and benefit enhancements. This covers more than 240,000 Starbucks partners and roughly 8,800 Starbucks stores across the country. We do not have the same freedom to make these improvements at locations that have a union or where union organizing is underway,” per a transcript.

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He added that “partners in those stores will receive the wages increases that were announced on October 21, but federal law prohibits us from promising new wages and benefits at stores involved in union organizing. And by law, we cannot implement unilateral changes at stores that have a union. Where Starbucks is required to engage in collective bargaining, we will negotiate in good faith. Starbucks will not favor or discriminate against any partner based on union issues.”

Union Starbucks Workers United tweeted “ON STRIKE IN BUFFALO! The Delaware & Chippewa workers are on an unfair labor practice strike today over Howard Schultz’s threats and retaliation against them for unionizing,” and requested that all current and future benefit improvements be extended to unionized stores.

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CNN reports that the first company-operated Starbucks store voted to unionize in December, and since, 46 stores have voted to unionize, with five voting against. CNN added that 237 company-owned stores have filed petitions with the National Labor Relations Board so far.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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