Starbucks to invest $1B in wages, training to counter baristas’ union push, CEO says

SEATTLE — Starbucks plans to invest $1 billion in wage hikes, improved training and store innovation before the close of fiscal year 2022, interim CEO Howard Schultz said Tuesday.

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The wage hikes will apply to tenured workers and double training for new employees as Schultz pushes back on mounting union pressure from the coffee giant’s baristas, CNBC reported.

In turn, the enhanced benefits will not be offered to workers at the roughly 50 company-owned cafes that have voted to unionize, meaning those workers must bargain to achieve parity, the company said.

Effective Aug. 1, all eligible U.S. employees will receive a base hourly pay of $15, and workers that were hired on or before May 2 will get a 3% raise or be bumped up to $15 an hour, whichever rate is higher, Fox Business reported.

“So, partners will receive these pay, benefits and store-improvement investments at all U.S. company-operated stores where Starbucks has the right to unilaterally make these changes,” the company said in a statement. “However, at stores where workers have union representation, federal law requires good faith bargaining over wages, benefits and working conditions which prohibits Starbucks from making or announcing unilateral changes.”

According to CNBC, Schultz said during the company’s Tuesday conference call that the “transformation will accelerate already record demand in our stores.”

“But the investments will enable us to handle the increased demand — and deliver increased profitability — while also delivering an elevated experience to our customers and reducing strain on our partners,” he added.

Schultz is currently serving his third turn as CEO, while the company hires a successor for the recently retired Kevin Johnson, the network reported.

Per the new structure, employees who have been with the company between two and five years will receive either a 5% increase or get paid 5% above the market’s start rate, earning whichever rate is higher. Meanwhile, workers with more than five years of tenure will get a 7% increase or get paid 10% above the market’s start rate, earning whichever rate is higher, Fox Business reported.

The company also said it would double planned investments in pay for store managers, assistant store managers and shift managers hired as of Monday, but those bumps will be paid out as one-time adjustments to base pay and will not affect planned raises for fiscal year 2023, according to CNBC.

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