Starbucks Boosts US Non-Union Worker Wages and Adds Benefits

Starbucks Stock

Starbucks (NYSE:SBUX) is enhancing compensation and benefits for the majority of its U.S. hourly employees following a record-breaking year in sales. However, the company has announced that certain perks will not be available to unionized workers, underscoring the ongoing tensions between the Seattle-based coffee giant and the union striving to organize its U.S. stores.

Since 2021, at least 366 Starbucks locations in the U.S. have voted in favor of unionization, according to the National Labor Relations Board. Nevertheless, labor agreements have yet to be reached at any of these unionized stores, out of Starbucks’ total of 9,600 company-operated stores in the U.S.

Effective January 1, Starbucks has stated it will raise wages, which currently average $17.50 per hour. Employees at both unionized and non-unionized stores with up to four years of service will receive raises of 3% or 4%, depending on their years of service. Those with five years or more will be eligible for a 5% increase. However, this 5% increase, being a new benefit, must be negotiated with Workers United and is therefore unavailable to unionized stores, according to the company’s announcement.

Workers United has rejected this claim and plans to file unfair labor practice charges against Starbucks with the NLRB, stating, “Withholding benefits from unionized stores is against the law.”

In addition to wage increases, Starbucks will also reduce the time required for hourly employees to accrue vacation days from one year to 90 days. This benefit is exclusively available to employees at non-unionized stores.

Furthermore, Starbucks has introduced a new North American barista championship, open to employees in the U.S. and Canada. However, this program will not be accessible to employees at unionized stores due to its involvement with prize money and travel.

Starbucks’ actions appear to contradict a September ruling by an administrative law judge for the NLRB, who declared that the company had acted unlawfully the previous fall when it increased pay only for non-union workers. Starbucks has appealed this ruling, arguing that NLRB’s standards do not permit employers to unilaterally alter the wages or benefits of unionized employees.

Starbucks stock has gained 3% year-to-date.

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About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.