Starbucks will invest more in its associates and stores to increase pay, modernize training and collaboration and advance store innovation. The retailer has now invested nearly $1 billion in these operations during 2022 alone as it seeks to counter a growing push for unionization.
Starbucks already had committed to setting its starting pay to $15 per hour beginning Aug. 1, 2022, which will bring the retailer’s average national pay to $17 per hour. All associates hired before May 2, 2022 will get either a 3% raise or have their pay set to $15 per hour, whichever is higher. Associates who have been with the company for two to five years will receive a 5% raise or move their pay to 5% above their market’s starting rate, whichever is higher, and those with five or more years of service will receive at least a 7% increase or move to 10% above the market start rate.
The retailer also will double its planned investments in tore manager, assistant store manager and shift manager pay for leaders hired on or before May 2. These one-time investments in base pay will be in addition to the planned fiscal 2023 raises that had been scheduled for fall 2022.
Additionally, Starbucks plans to enhance training by doubling the amount of training time for new baristas beginning June 21, doubling the amount of training time for new shift supervisors beginning August 30 and adding more training for baristas and supervisors already in these roles. The retailer also will redesign its barista training program and provide a shift supervisor program as well as offer more hands-on practice time for baristas.
However, the retailer stated that “new pay and benefits changes will apply to stores where Starbucks has the right to unilaterally make these changes. Where Starbucks lacks the right to unilaterally make these changes (for example, stores where there is a union or union organizing) Starbucks will provide wage increases that were announced in October 2021 and will otherwise comply with all applicable legal requirements.”
Similar wording was used when the company first announced it was working on improved benefits in April 2022, when the Wall Street Journal reported that Starbucks’ legal counsel had found that federal law requires separately negotiated contracts for union-represented workers’ pay and benefits. Cathy Creighton, Director of the Cornell University ILR Buffalo Co-Lab and a former attorney for the NLRB, told the WSJ that Starbucks only needed to ask to extend new benefits to unionized stores.
A total of 63 Starbucks locations have held unionization votes and 55 have been successful. The latest unionized store is in Tallahassee, Fla. and is the first Starbucks location to unionize in the state, according to the Tallahassee Democrat. Union activists claim that 240 stores in 33 states have filed to hold elections.
Starbucks Turns to Associates for Ideas
The investments were based off visits to Starbucks stores and conversations with workers. Some of the other investments being made include:
- Creating of a communication app that will let all 240,000 U.S. associates join in extended collaboration sessions with other workers;
- Introducing credit card and debit card tipping by late 2022;
- Launching a modernized recognition program and expanding a portfolio of upskilling and career mobility programs; and
- Upgrading in-store equipment and technology, including accelerating the resolution of “non-critical” repair and maintenance.
“What you will see is the transformation of the Starbucks customer and partner experiences,” said Howard Schultz, Founder and CEO of Starbucks in a statement. “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. And we will reintroduce joy and connection back into the partner experience.”