Starbucks is giving all of its U.S. employees something to cheer about. Effective Oct. 3, U.S.-based employees and store managers will receive an increase in base pay of 5% or greater. The range of wage increase will be determined by geographic and market factors, according to a letter from Starbucks Chairman and CEO Howard Schultz.
Starbucks also will be doubling its annual stock award for employees who reach two years of continuous service with the company. The combination of these changes will result in compensation increases of between 5% and 15% per employee.
The move is interestingly timed, coming as it does on the heels of an online petition started by Starbucks barista Jaime Prater. The petition alleges that Starbucks’ present labor practices — including that “managers are directed to cut shifts to save on labor costs” — have contributed to poor morale throughout the company. The petition has more than 13,000 signatures thus far.
Schultz hasn’t directly addressed the petition, but did highlight the scheduling concerns within his letter:
“While we have made progress over the years in providing more stability and consistency in scheduling, our field leaders are committed to make every effort to help you meet your specific scheduling needs, especially when it comes to ensuring your benefits eligibility going forward. To that end, please know that you have my personal commitment that we will work with every partner to ensure you have the hours you need.”
Schultz also revealed in the letter that starting July 18, employees would have access to new interactive tools that are designed to help them compare and choose personalized health insurance coverage plans. Additionally, Starbucks will be updating its company dress code.
Wages Go Up, And Prices Follow
The wage increases also coincide with a price hike for the consumer, as select drink prices were increased on July 12. Depending on the market served, select sizes of brewed coffee have increased by 10 to 20 cents, while espresso beverages and tea lattes have jumped 10 to 30 cents. However, 65% of beverage prices remain unchanged, meaning the average consumer ticket is expected to increase by only 1%.
While there has no confirmation as to why the drink prices have increased, a company statement cited the need to “balance business needs” as a driver for ongoing pricing evaluation.