Dive Brief:
- Starbucks announced Wednesday that it will raise wages at least 10% for baristas, shift supervisors and cafe attendants who were hired on or before Sept. 14, Bloomberg reports. The pay bump will take effect in the U.S. on Dec. 14, and starting wages will increase 5%, according to a company memo obtained by the publication. Executive Vice President Rossann Williams said in the memo that this pay hike will help managers "continue to attract and retain new talent."
- Starbucks will also give partners with three years of continued service at least an 11% pay increase, according to Business Insider. The company will also raise the premium it pays above the minimum wage in all of its markets.
- These pay bumps come amid employee demands for a $15 minimum wage, with one online petition for the cause garnering almost 9,000 signatures. President-elect Joe Biden has also pushed for raising the federal minimum wage to $15. If this minimum wage hike did come to pass, Starbucks would feel the impact more acutely than major competitors because about half of Starbucks total U.S. locations aren't franchised, which means the company's bottom line would take a direct hit, Business Insider reports.
Dive Insight:
Though Biden is striving for a $15 federal minimum wage, Republicans won crucial Senate seats that leave Congress divided and undermine the likelihood of such a measure passing. This gives major restaurant chains some breathing room, but several states are passing minimum wage hikes — keeping the issue top of mind for employees and operators.
Many chains would be able to pass off this cost burden to their franchisees, but Starbucks owns about 9,600 of its U.S. locations. The chain is likely trying to proactively raise wages on its own terms as the American tide turns toward more minimum wage increases.
"This announcement is the next phase of our commitment to ensuring the well-being of partners with one of the most significant investments to hourly pay in the U.S. in the history of the company," Starbucks representative Reggie Borges told Business Insider. "We have a multi-year aspiration to make more meaningful investments in pay as it continues to rebuild and grow the business."
Starbucks has already rolled out several progressive pay initiatives amid the pandemic, including "catastrophe" pay for employees diagnosed with or directly exposed to COVID-19 or workers facing child care challenges. The chain has also offered sick pay to all employees since 2018, a benefit that isn't guaranteed by several major chains.
