December 5, 2022

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Starbucks raises wages, doubles worker training amid union pressure

Starbucks raises wages, doubles worker training amid union pressure

A Starbucks barista is fulfilling an order at a South Philadelphia store.

Mark McKella | Reuters

Starbucks It said it would raise wages for hired workers and double the training of new employees as the company and its CEO, Howard Schultz, seek to beat the union push from its baristas.

However, the coffee giant will not offer enhanced benefits to workers in the nearly 50 company-owned coffee shops that voted to join unions. Starbucks said such changes to union stores would have to come through bargaining.

“Therefore, partners will receive these salaries, benefits, and store improvement investments in all US corporate-operated stores where Starbucks is entitled to unilaterally make these changes,” the company said in a statement. “However, in stores where there is union representation for workers, federal law requires bona fide bargaining on wages, benefits, and working conditions that prevents Starbucks from making or announcing unilateral changes.”

In total, Starbucks plans to spend $1 billion on increasing wages, improving training and innovation in stores during fiscal year 2022, which ends in the fall. On the first day of Schultz’s return to lead the company, Repurchase program suspended To invest in workers and stores.

“The shift will accelerate already record demand in our stores,” Schultz said on the company’s conference call on Tuesday. “But the investments will enable us to deal with the increased demand – and achieve increased profitability – while delivering a superior experience to our customers and reducing the pressure on our partners.”

It’s Schultz’s third run as CEO of Starbucks. He is operating on a temporary basis until the company appoints a successor to recently retired Kevin Johnson.

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Schultz told store managers last month that the company was reviewing its benefits for workers. However, he said the new benefits could not legally be extended to stores that voted to form unions without negotiating separate contracts for unionized workers. Starbucks Union, Starbucks Workers Union, File a complaint with the National Labor Relations Board about his comments.

This marks the third pay increase for coffee industry workers’ paychecks since company-owned stores in Buffalo, New York, petitioned to join a union. In October, led by Johnson, Starbucks announces two pay increasesHat will bring minimum wage up to $15 an hour by August.

The final round of hikes is for proven workers and managers. Employees who have worked with the company for two to five years will either receive a 5% raise or get paid 5% above the market start rate, whichever is higher. Workers over five years old will get a 7% raise or get paid 10% above the market starting rate, whichever is higher.

Starbucks also said it will double the planned investment in the salaries of store managers, assistant store managers and hired shift managers starting Monday. These changes amount to one-time adjustments to the base salary, and employees will still receive the increases planned for fiscal year 2023 this fall.

Starbucks also said it will double the amount of training new baristas and shift supervisors receive based on feedback from employees during hearings attended by Schultz and other senior executives.

More investments also planned. The company said it will tip credit and debit cards by late 2022, and plans to improve equipment and technology, such as upgrading in-store iPads and speeding the rollout of new ovens and espresso machines.

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Schultz’s willingness to launch an aggressive and costly campaign against labor unions did not have much support from Wall Street. Starbucks shares are down 19% since its return early last month.

Starbucks stock rose 3% in extended trading after The company announced the results of the second fiscal quarter. Strong sales growth in the United States offset sharp declines in China, helping the company beat Wall Street revenue estimates and meet earnings expectations.