Human Resources

Starbucks to Raise Pay at Least 5% in U.S.

Annual stock awards to hourly employees with at least two years' service will double, raising total compensation as high as 15%.
Matthew HellerJuly 12, 2016

Starbucks said Monday it will raise pay for its U.S. store managers and workers amid allegations that its scheduling practices have reduced the work hours of many employees.

CEO Howard Schultz announced in a letter to employees that effective Oct. 3 base pay will increase at least 5%. The world’s largest coffee chain will also the double the “bean stock,” or annual stock award, to hourly employees who have worked at company-operated stores for at least two years, raising the total compensation of about 150,000 workers in about 7,600 company-operated cafes in the US by 5 to 15%.

“We remain committed to doing more each year to invest in our partners as part of our long-range, strategic plan,” Schultz said.

A Starbucks spokesman said the company pays above minimum wage in every market but the Fight for $15 movement has put pressure on the retail and restaurant industries to raise pay. The Democratic Party last week amended its platform to call for a $15-an-hour federal minimum wage.

“It’s smart for a company like Starbucks to get ahead of the curve and get great PR,” Andrew Challenger, vice president of the outplacement firm Challenger Gray and Christmas, told the Chicago Tribune.

According to PayScale, which collects salary data from employees, the average median wage for Starbucks employees in Chicago is $10.59 an hour. Chicago’s minimum hourly wage this month climbed to $10.50 as it moves toward $13.

Schultz also addressed scheduling in his memo, giving his “personal commitment that we will work with every partner to ensure you have the hours you need” to ensure benefits eligibility. The company offers health benefits to employees who work at least 20 hours a week.

In an online petition that has so far collected nearly 13,000 signatures, Jaime Porter, a Starbucks barista, said staffing cuts are making it difficult to work enough hours to make ends meet. “Right now, the labor climate keeps most baristas regularly underemployed, enough to qualify for benefits, but not enough to afford to pay for them,” he complained.

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