Starbucks Hiking Wages Again — But Not for Unionizing Workers

Starbucks announced another round of wage hikes for U.S. employees coming this year, but those who are unionized or considering the possibility may need not apply.

As scattered locations across the country consider unionizing, the company’s interim CEO Howard Schultz committed Tuesday to both past promises of wage hikes and new ones. But on the analyst call he revealed that while the already-pledged increases will be honored for everyone, new enhancements will likely be limited to stores that have not already voted to unionize or where efforts to organize are underway.

Federal law, he says, prevents the company from instituting new wages and benefits where organizing is ongoing.

The new enhancements are on top of commitments made last year and total $200 million in investment. Schultz on the same call added that there are no union contracts among food and beverage chains that “even come close to what Starbucks offers” to its employees.

Starbucks announced in October the plan to implement two pay hikes for its store personnel this year, bringing its average hourly wage up to $17. Of the company’s nearly 9,000 U.S. locations, about 46 have chosen to unionize since the first company-operated store took that step in December.

The effort to unionize the first Starbucks coffee shop in Hawaii failed this week as staff voted against organizing 8 to 7. That makes six stores that have decided against the move, and another 237 have filed paperwork with the National Labor Relations Board to get the process going.

Workers United, the national union that stores who approve of unionizing are joining, called Shultz’s statements “dead wrong.” A union attorney said that employers cannot award new benefits unilaterally during contract negotiations.

The NLRB has confronted the company in recent weeks over what it says are illegal practices to head off the labor organizing effort.

Among changes Schultz announced are expanded support programs to coincide with the higher pay. In June it will double the training time for new baristas and, two months later, expand the program to include supervisors. Starbucks is also launching an employee app to improve communication with and between workers.

Less than 1% of the food and drink service industry is unionized, but it appears to be trending in that direction as the labor market remains tight. However, creating an adversarial relationship with management of a company that already offers far-above-average compensation to its employees on the surface seems misguided.