Though only an occasional Starbucks customer, I am a veteran Starbucks shareholder. I hold more than a rubbernecking interest in Starbucks’ financial performance. My wealth position is advanced or retarded by it. To state the obvious (which too often needs stating), I prefer that Starbucks perform financially better than worse.
I assume – at my own risk – that Starbucks executives share my view and manage the enterprise accordingly. I suspect that is the reason for management countering the outside push to unionize the wage earners. A unionized workforce will hurt financial performance.
Many investors share a similar sentiment on unions. Since the unionizing push gained momentum last year, Starbucks shares have lost 40% of their value from their 52-week high. (To be sure, the odious macro-backdrop -- rising interest rates, rising inflation, supply-chain snarls – have contributed to the downdraft, but the unionizing push has been a contributing variable.)
Momentum favors the union at the moment. According to a May 3 article posted at HuffPost, employees at fifty Starbucks stores have voted to unionize, the tally, perhaps propaganda, having been gleaned from a tweet sent by the organizing body, Starbucks Workers United. The HuffPost article, typed by Dave Jamieson, HuffPost labor reporter, goes on to declare that “the union has won 85% of the elections held so far, and votes have been scheduled for more than 100 other stores.” I’ll accept Mr. Jamieson’s words on the matter.
From my scant experience, Starbucks stores appear to be staffed mostly by baristas between early twenty-something and early thirty-something of age. Young people, in other words. And as an observant non-young person (and former young person), my experience paints a demography populated with a higher percentage of the idealistic, the delusional, the inchoate, the misinformed, and the gullible: people frequently clueless about the way the world really works. (The is, unfortunately, true for too many non-young people, people of my vintage who should know better.) It’s nothing new, really. The untested young have always been imbued with a higher percentage of these traits.
My perception backed by experience, suggests the Starbucks-barista demography is a demography more easily swayed by demagoguery than the demographies populated by older people. An April 8 Vox.com article on the Starbucks unionizing movement titled “How a Bunch of Starbucks Baristas built a Labor Movement” offers a few tidbits that support my perception. The article’s featured pull-quotes point to a demography with bit more maturing to do. Behold, the following:
Hope Liepe, an 18-year-old Starbucks barista in Ithaca, New York, tells her interviewer, “We want to be able to sit down with Starbucks, with the higher-up executives, and make a plan so that we, as employees, feel as valued as they say that we are.”
Hayleigh Fagan, a 22-year-old shift supervisor in Rochester, New York, laments her employer’s hypocrisy. “Starbucks is quote-unquote ‘progressive,’ ‘woke,’ whatever,” she says. “They give us decent benefits,” she concedes, but at what cost? Fagan tells us: “But we’re literally selling our lives and time and bodies to this corporation,” she says. “Tell me why I don’t deserve a living wage.”
“They’ll call me a partner all they want, but corporate will allow me to die on the floor if it made them money,” exaggerates (with, I imagine, a dramatic, declaiming wave of the hand) Brandi Alduk, a 22-year-old employee at a Queens, New York Starbucks. In more subdued tones, Alduk accuses Starbucks executives of withdrawing Covid-19 restrictions “a little too soon and a little too brazenly, considering they were still working at home when they started loosening some of the restrictions.”
Such antithetical attitudes toward one’s benefactor is found not only in the progressive East, but in certain metropolitan enclaves in the conservative West.
Salt Lake City houses at least one such enclave. A Starbucks unionization article in the Salt Lake City Tribune highlighted a letter that pro-union workers sent to Starbucks CEO Howard Schultz. The letter indicts management, in boilerplate language, with the charge of a “greedy” corporation (have you noticed that it’s never the image reflected from the mirror that’s greedy, it’s always the other guy?) that prioritizes profit over workers’ safety, while hiding under a “progressive” guise. The same article highlights Starbucks “unprecedented growth,” which the letter’s authors say enriched leadership on the backs of employees’ labor.
Movements that evoke camaraderie, passion, espirit de corp, and a degree of notoriety can perpetuate into a cause célèbre. You see it not only in union movements, but in movements social, political, and charitable. The professed goal at the start evolves into something different, a heightened enthusiasm for the process. The sleight of hand is rational from the leaders’ perspective. If the stated goal is achieved, lifestyles and notoriety for the elite end. The social capital crumbles. Best to perpetuate the myth that we’re all working to an achievable Utopian end to maintain a perpetual income stream for the few.
To be sure, money is to be had. Black Lives Matters elevated that movement’s co-founder, Patrisse Cullors, to the millionaire class. Fired Amazon worker and failed rap singer Christian Smalls is a work in progress. He has achieved at least fifteen minutes of fame (and a Wikipedia page) and probably a lucrative income stream in his work to organize Amazon employees.
Smalls is the founder and president of Amazon Labor Union and the garishly attired progressive darling who organized the nearly five thousand workers at the Amazon JFK8 warehouse on Staten Island. Mission accomplished to date. The majority of the JKF8 have voted in favor of the union. If the contract is ratified, workers will be become dues-paying members, paying $130 annually if part-time and $260 annually if full-time. If all the employees pay dues and the dues are split fifty/fifty between full-time and part-time, the Amazon Labor Union will collect nearly $1 million annually. On to the next warehouse.
Starbucks Workers United has set its per-employee remunerative sights a bit higher than Amazon Labor Union. Its website says that union dues for full-time Starbucks workers are $10.84 per week. For those working less than 25 hours, dues are $5.47 per week. A full-time employee will pay $563.68 annually, a part-time worker will pay $284.44.
Amazon claims 950,000 employees, Starbucks claims 240,000. They are not all wage slaves, mind you, but enough are that the eyes pop with dollar signs when the numbers are extrapolated. With only middling success, the union leaders can free themselves from wage bondage to settle into an aristocracy suffused in wealth and privilege. As for the vast, vast majority, they step back into the role as the docile, dues-paying pleb. An Orwell Animal Farm stratification, it appears to me.
The Starbucks Works United website tells us nothing about its leaders. A Google search offers a few names, and one repeats more than most: A 24-year-old Starbucks barista named Jaz Brisack. Ms. Brisack’s Wikipedia page (she, too, has a Wikipedia page) claims she is not only a Starbucks barista, but “an American labor organizer known for leading unionizing efforts at Starbucks.” Brisack’s Wikipedia biographer claims Brisack worked for the United Auto Workers to unionize a Nissan factory in Mississippi. She moved to Buffalo, New York to help unionize a SPoT Coffee store. Brisack is also a Rhode Scholar inspired by Eugene Debs. Brisack is no ordinary Starbuck barista.
Brisack claims she had no choice but to pounce on the Starbucks opportunity, thinking it was "now or never.” She was right to choose now. Starbucks struggled with a worker shortage in the summer of 2021, a lingering problem perpetuated by the great resignation instigated by the Covid pandemic.
But the opportunity Brisack exploits today rings vaguely familiar. I know I witnessed a similar labor environment somewhere before, but where?
Ah, yes! Employers were confronted with a similar demanding (and in-demand) labor economy in the late 1990s during the height of Internet mania. The unemployment rate had dipped below 4% heading into the 2000s. In addition to offering higher wages to lure workers, employers offered additional perks, such as free food, game rooms, and relaxed attire policies. Work had approached play.
And how did it end? Two years later, workers found they had been wedged out of the driver’s seat. The unemployment rate rose to 6% on a recession and a bear market in stocks. All the perks went away, and so did the employers’ conciliatory stance. Once again it was proved that only change is permanent.
Brisack has yet to endure a recession as an adult. Once one occurs, the great resignations that occur during economic expansions shift to great resumptions during economic recessions. It’s not quite hat-in-hand with head down, but desperate jobseekers tend to be conciliatory jobseekers. When the workers return, and they will, I’ll bet dollars to dimes they will be less demanding because the employers will be more demanding.
As for the here and now, labor leaders will puff their chest and boast to the underlings how they negotiated wage increases, more vacation days, and more training. They downplay what the underlings will pay. There is always a cost to a benefit. Management must manage its costs to ensure the business grows and generates the required risk-adjusted return on invested capital while growing.
Because a company has ceded ground on wages, vacation, and training doesn’t mean its costs have necessarily risen. The workers will very likely pay for their increases in ways they had not considered. Perhaps the company will reduce medical coverage or other benefits like education reimbursement, uniform allowance, and employee discounts. The rules the employees follow could become more rigid and quantifiable.
Productivity will surely play a role. Management could insist each employee serve more customers and demand that service adhere to quality standards. The more costly the labor, the more competitive capital equipment becomes. Management could incorporate more automation so that each employee can do more and fewer employees are required.
Only an individual can determine what benefits are most desirable and what costs are worth paying. An employee preferring more flexibility, less productivity, less stress, and, therefore, less pay, will be forced to accept less flexibility, more productivity, more stress, and more pay, though he prefers it were otherwise. The ability to make such calculations is truncated in a union contract. All employees are treated equally. They are treated as a homogeneous blob. A union contract forces one size on all.
Disenchantment is sure to rise, particularly among the productive, individualized employees. The conscientious barista unfailingly dependable, productive, cheerful, and adaptable can ask for accommodations that might fall outside company policy – additional vacation days, a bonus, a reimbursement for an expense tangentially related to business – in a non-unionized workplace. Unionized diminishes individuality, and that can lead to disenchantment and a great resignation among the company’s most productive employees (yet another reason management is keen to prevent unionization).
Because monopsony power is a fiction, companies must compete for labor, no company can afford to be tone-deaf to grievances intelligent employees express with their work. If the same grievances continually arise, management is wise to investigate. Some grievances will prove to be petty and groundless; others will be legit and worth correcting and will be corrected.
Starbucks management has acted to rectify grievances it views as legitimate. CEO Schultz has announced new benefits, including expanded training, improved sick leave, and credit-card tipping (but only at non-unionized stores). Starbucks said all employees, including those at stores that are unionizing, would receive wage hikes first announced this past October. On August 1, employees will receive either a 3% raise or $15 dollars hour, whichever is higher, and tenured hourly employees will receive even more.
I’ll end by disabusing the pro-union Starbucks workers on one demand – having a say in how the company is run. You have a say only to the extent of your monetary investment in the company, or to the extent that you have been empowered by those with a monetary investment to have a say. An intelligent management team will consider the intelligent input from intelligent employees, to be sure. Much of the input could be productive and worth implementing, but that’s not for the employee to decide. Contribute, by all means, but present your contribution as an offer, not an order.
I assume – at my own risk – that Starbucks executives share my view and manage the enterprise accordingly. I suspect that is the reason for management countering the outside push to unionize the wage earners. A unionized workforce will hurt financial performance.
Many investors share a similar sentiment on unions. Since the unionizing push gained momentum last year, Starbucks shares have lost 40% of their value from their 52-week high. (To be sure, the odious macro-backdrop -- rising interest rates, rising inflation, supply-chain snarls – have contributed to the downdraft, but the unionizing push has been a contributing variable.)
Momentum favors the union at the moment. According to a May 3 article posted at HuffPost, employees at fifty Starbucks stores have voted to unionize, the tally, perhaps propaganda, having been gleaned from a tweet sent by the organizing body, Starbucks Workers United. The HuffPost article, typed by Dave Jamieson, HuffPost labor reporter, goes on to declare that “the union has won 85% of the elections held so far, and votes have been scheduled for more than 100 other stores.” I’ll accept Mr. Jamieson’s words on the matter.
From my scant experience, Starbucks stores appear to be staffed mostly by baristas between early twenty-something and early thirty-something of age. Young people, in other words. And as an observant non-young person (and former young person), my experience paints a demography populated with a higher percentage of the idealistic, the delusional, the inchoate, the misinformed, and the gullible: people frequently clueless about the way the world really works. (The is, unfortunately, true for too many non-young people, people of my vintage who should know better.) It’s nothing new, really. The untested young have always been imbued with a higher percentage of these traits.
My perception backed by experience, suggests the Starbucks-barista demography is a demography more easily swayed by demagoguery than the demographies populated by older people. An April 8 Vox.com article on the Starbucks unionizing movement titled “How a Bunch of Starbucks Baristas built a Labor Movement” offers a few tidbits that support my perception. The article’s featured pull-quotes point to a demography with bit more maturing to do. Behold, the following:
Hope Liepe, an 18-year-old Starbucks barista in Ithaca, New York, tells her interviewer, “We want to be able to sit down with Starbucks, with the higher-up executives, and make a plan so that we, as employees, feel as valued as they say that we are.”
Hayleigh Fagan, a 22-year-old shift supervisor in Rochester, New York, laments her employer’s hypocrisy. “Starbucks is quote-unquote ‘progressive,’ ‘woke,’ whatever,” she says. “They give us decent benefits,” she concedes, but at what cost? Fagan tells us: “But we’re literally selling our lives and time and bodies to this corporation,” she says. “Tell me why I don’t deserve a living wage.”
“They’ll call me a partner all they want, but corporate will allow me to die on the floor if it made them money,” exaggerates (with, I imagine, a dramatic, declaiming wave of the hand) Brandi Alduk, a 22-year-old employee at a Queens, New York Starbucks. In more subdued tones, Alduk accuses Starbucks executives of withdrawing Covid-19 restrictions “a little too soon and a little too brazenly, considering they were still working at home when they started loosening some of the restrictions.”
Such antithetical attitudes toward one’s benefactor is found not only in the progressive East, but in certain metropolitan enclaves in the conservative West.
Salt Lake City houses at least one such enclave. A Starbucks unionization article in the Salt Lake City Tribune highlighted a letter that pro-union workers sent to Starbucks CEO Howard Schultz. The letter indicts management, in boilerplate language, with the charge of a “greedy” corporation (have you noticed that it’s never the image reflected from the mirror that’s greedy, it’s always the other guy?) that prioritizes profit over workers’ safety, while hiding under a “progressive” guise. The same article highlights Starbucks “unprecedented growth,” which the letter’s authors say enriched leadership on the backs of employees’ labor.
Movements that evoke camaraderie, passion, espirit de corp, and a degree of notoriety can perpetuate into a cause célèbre. You see it not only in union movements, but in movements social, political, and charitable. The professed goal at the start evolves into something different, a heightened enthusiasm for the process. The sleight of hand is rational from the leaders’ perspective. If the stated goal is achieved, lifestyles and notoriety for the elite end. The social capital crumbles. Best to perpetuate the myth that we’re all working to an achievable Utopian end to maintain a perpetual income stream for the few.
To be sure, money is to be had. Black Lives Matters elevated that movement’s co-founder, Patrisse Cullors, to the millionaire class. Fired Amazon worker and failed rap singer Christian Smalls is a work in progress. He has achieved at least fifteen minutes of fame (and a Wikipedia page) and probably a lucrative income stream in his work to organize Amazon employees.
Smalls is the founder and president of Amazon Labor Union and the garishly attired progressive darling who organized the nearly five thousand workers at the Amazon JFK8 warehouse on Staten Island. Mission accomplished to date. The majority of the JKF8 have voted in favor of the union. If the contract is ratified, workers will be become dues-paying members, paying $130 annually if part-time and $260 annually if full-time. If all the employees pay dues and the dues are split fifty/fifty between full-time and part-time, the Amazon Labor Union will collect nearly $1 million annually. On to the next warehouse.
Starbucks Workers United has set its per-employee remunerative sights a bit higher than Amazon Labor Union. Its website says that union dues for full-time Starbucks workers are $10.84 per week. For those working less than 25 hours, dues are $5.47 per week. A full-time employee will pay $563.68 annually, a part-time worker will pay $284.44.
Amazon claims 950,000 employees, Starbucks claims 240,000. They are not all wage slaves, mind you, but enough are that the eyes pop with dollar signs when the numbers are extrapolated. With only middling success, the union leaders can free themselves from wage bondage to settle into an aristocracy suffused in wealth and privilege. As for the vast, vast majority, they step back into the role as the docile, dues-paying pleb. An Orwell Animal Farm stratification, it appears to me.
The Starbucks Works United website tells us nothing about its leaders. A Google search offers a few names, and one repeats more than most: A 24-year-old Starbucks barista named Jaz Brisack. Ms. Brisack’s Wikipedia page (she, too, has a Wikipedia page) claims she is not only a Starbucks barista, but “an American labor organizer known for leading unionizing efforts at Starbucks.” Brisack’s Wikipedia biographer claims Brisack worked for the United Auto Workers to unionize a Nissan factory in Mississippi. She moved to Buffalo, New York to help unionize a SPoT Coffee store. Brisack is also a Rhode Scholar inspired by Eugene Debs. Brisack is no ordinary Starbuck barista.
Brisack claims she had no choice but to pounce on the Starbucks opportunity, thinking it was "now or never.” She was right to choose now. Starbucks struggled with a worker shortage in the summer of 2021, a lingering problem perpetuated by the great resignation instigated by the Covid pandemic.
But the opportunity Brisack exploits today rings vaguely familiar. I know I witnessed a similar labor environment somewhere before, but where?
Ah, yes! Employers were confronted with a similar demanding (and in-demand) labor economy in the late 1990s during the height of Internet mania. The unemployment rate had dipped below 4% heading into the 2000s. In addition to offering higher wages to lure workers, employers offered additional perks, such as free food, game rooms, and relaxed attire policies. Work had approached play.
And how did it end? Two years later, workers found they had been wedged out of the driver’s seat. The unemployment rate rose to 6% on a recession and a bear market in stocks. All the perks went away, and so did the employers’ conciliatory stance. Once again it was proved that only change is permanent.
Brisack has yet to endure a recession as an adult. Once one occurs, the great resignations that occur during economic expansions shift to great resumptions during economic recessions. It’s not quite hat-in-hand with head down, but desperate jobseekers tend to be conciliatory jobseekers. When the workers return, and they will, I’ll bet dollars to dimes they will be less demanding because the employers will be more demanding.
As for the here and now, labor leaders will puff their chest and boast to the underlings how they negotiated wage increases, more vacation days, and more training. They downplay what the underlings will pay. There is always a cost to a benefit. Management must manage its costs to ensure the business grows and generates the required risk-adjusted return on invested capital while growing.
Because a company has ceded ground on wages, vacation, and training doesn’t mean its costs have necessarily risen. The workers will very likely pay for their increases in ways they had not considered. Perhaps the company will reduce medical coverage or other benefits like education reimbursement, uniform allowance, and employee discounts. The rules the employees follow could become more rigid and quantifiable.
Productivity will surely play a role. Management could insist each employee serve more customers and demand that service adhere to quality standards. The more costly the labor, the more competitive capital equipment becomes. Management could incorporate more automation so that each employee can do more and fewer employees are required.
Only an individual can determine what benefits are most desirable and what costs are worth paying. An employee preferring more flexibility, less productivity, less stress, and, therefore, less pay, will be forced to accept less flexibility, more productivity, more stress, and more pay, though he prefers it were otherwise. The ability to make such calculations is truncated in a union contract. All employees are treated equally. They are treated as a homogeneous blob. A union contract forces one size on all.
Disenchantment is sure to rise, particularly among the productive, individualized employees. The conscientious barista unfailingly dependable, productive, cheerful, and adaptable can ask for accommodations that might fall outside company policy – additional vacation days, a bonus, a reimbursement for an expense tangentially related to business – in a non-unionized workplace. Unionized diminishes individuality, and that can lead to disenchantment and a great resignation among the company’s most productive employees (yet another reason management is keen to prevent unionization).
Because monopsony power is a fiction, companies must compete for labor, no company can afford to be tone-deaf to grievances intelligent employees express with their work. If the same grievances continually arise, management is wise to investigate. Some grievances will prove to be petty and groundless; others will be legit and worth correcting and will be corrected.
Starbucks management has acted to rectify grievances it views as legitimate. CEO Schultz has announced new benefits, including expanded training, improved sick leave, and credit-card tipping (but only at non-unionized stores). Starbucks said all employees, including those at stores that are unionizing, would receive wage hikes first announced this past October. On August 1, employees will receive either a 3% raise or $15 dollars hour, whichever is higher, and tenured hourly employees will receive even more.
I’ll end by disabusing the pro-union Starbucks workers on one demand – having a say in how the company is run. You have a say only to the extent of your monetary investment in the company, or to the extent that you have been empowered by those with a monetary investment to have a say. An intelligent management team will consider the intelligent input from intelligent employees, to be sure. Much of the input could be productive and worth implementing, but that’s not for the employee to decide. Contribute, by all means, but present your contribution as an offer, not an order.
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