Posted on 07/03/2016 4:15:00 AM PDT by HomerBohn
ZeroHedge reminds us that a year ago, owner and CEO of Seattle-based Starbucks, Howard Schultz, piously told CNN that he supported raising the minimum wage to $15/hour “across the country,” but warned that “it will be very difficult for small business in the country at a $15 level to pay those kinds of wages.” Then Schultz grandly announced that Starbucks will lead the way by raising the wages of its employees “way above the minimum wage”:
“For Starbucks come January 1 we are taking wages up across the country and we will pay above the minimum wage in every state we operate. Starbucks is way above the minimum wage. I have always looked at total compensation. I have always believed that our success as a company is best shared.“
Note that a worker’s total compensation is a function of hourly wages and total number of hours worked.
Fast forward a year . . . .
Lisa Baertlein reports for Reuters, June 30, 2016, that Starbucks, the world’s biggest coffee chain that employs 160,000 people in the United States, is accused by an online petition, signed by more than 9,000 people, of “extreme” cutbacks in work hours at its U.S. cafes, which hurt both employee morale and customer service.
In other words, Starbucks compensated for raising its employees’ wages to “way above minimum wage” by reducing its workers’ hours, so as to maintain its profitability.
According to Jaime Prater, a Southern California barista and the online petition’s creator, some 7,000 signers of the petition described themselves as Starbuck employees.
Prater said “The labor situation has gone from tight to infuriating.” The manager of a central California Starbucks who asked not to be identified for fear of reprisal, told Reuters that the store’s work force has shrunk by about 10%, even though sales are up.
Similar complaints were made by many signers of the online petition:
Signer Aaron I. wrote: “No matter what we do to save on labor at my store, the system tells us EVERY SINGLE DAY that we are at least 8 hours over in labor for the day and have to cut even more.”
Leslie S, a self-described shift manager, wrote: “We’re suffering, & so are our customers. It’s not working.”
Makenna S, a shift supervisor, wrote: “Mobile orders have increased sales and created more need for labor, yet the company is cutting labor.”
While its employees contend with reduced work hours and, therefore, pay, Starbucks’ established cafes in U.S.-dominated Americas region is enjoying increased sales of:
9% sales increase in the first quarter of this year,
7% increase in the second quarter, and
an expected 6.2% increase for the current quarter, according to Consensus Metrix.
Howard Penney, an analyst at Hedgeye Risk Management who follows Starbucks, observed, “They’ve been posting industry-leading same-store sales growth for the last five years while reducing labor costs – a trend that can’t continue.”
According to Wikipedia, Starbucks’ CEO Howard D. Schultz “was born to a Jewish family on July 19, 1953, in Brooklyn, New York.” He is pro-gun control and same-sex marriage. In 2012, Forbes magazine ranked Schultz as the 354th richest person in the United States, with a net worth of $1.5 billion.
Howard Schultz’s name should be listed in dictionaries as a synonym of hypocrisy
I totally agree with your assessment.
However people stand in line to pay outlandish prices for their product.
I’ve always said Howard Schultz is a marketing genius...probably on par with David Axelrod.
Actually, from watching them work, a barista is a demanding job. The typical even small Starbucks store generates several million dollars per year from only a few employees. They ware always busy, unlike other chains I visit. And they need to know the drink combinations for a myriad of beverages.
< Basket Weaving? >
What planet have you been living on?
Underemployed McDonalds burger flippers have Engineering and Computer Science degrees, Masters level & PhD too.
Ever heard of H1-B, ban on citizenship?
The STEM workers hate hearing the truth because they too are vulnerable in time.
Ever hear about the career half-life? That means you are 1/2 obsolete in 5 yrs due to technology. Experience is not accumulative in many fields.
A workers best hope is find a stable niche occupation and shut up about it.
Starbucks sells a bottled water named Ethos (costs $1.95) which claims to help those in 3rd world countries get supplies of drinkable water. Sounds great, no?
When you read the fine print only a nickel of every bottle goes to the cause.
WHOA!! TMI...you need to get a life!
Hate to break it to you, but Peet’s is a left wing organization based in San Francisco.
Guarantee you they’re coming, just like kiosks in MacDonalds and robotic burger flippers.
Will they be programmed to “Have a discussion about race” with the customers?
“The person who gave it to me was thoughtless in giving me something I normally wouldn’t use.”
—
So give it to someone who WILL use it.
.
They raising the price of a cup of coffee?
Surprise. Surprise. Do it gradually and the public won’t
even notice.
A $15 an Hour Minimum Wage costs the Employer about $18.
If the Employer provides additional Benefits like Paid Sick Leave and Paid Vacation, you can add another 10% to that cost. We’re not even talking about the costs of Training and Employee Management.
The Politicians are pushing to make Paid Sick Leave, Paid Vacation and Paid Family Leave Mandatory. A small Business cannot afford to pay People for not working.
As for the cost of a cup of Coffee, I make it at home or I get a Senior Coffee at McDonalds for $.79. The McDonalds around here pay their Employees $10 an Hour to start.
Heck, I’m still upset that the raised the Price of a Big Mac from $1.99 to $2.19 on Big Mac Monday. LOL
It’s like the rising strength of a burgeoning central socialist government. We’re so busy watching the great new shows on television, playing with our cell phones and spending ourselves into bankruptcy (what’s good for the feds is good enough for me) that we don’t notice how the District of Corruption and our state governments are growing like topsy.
If a clueless electorate forces another Clinton win our nation is totally toast....and so are we, our children, our grandchildren and THEIR progeny.
Their toilet facilities are labeled properly though.
Believe me. What young employees need the least today is free time. Too much breeds sloth.
You don’t work at Starbucks of McDonalds do you?
IOW, he’s a (gasp!) capitalist!
“...Peets....”
Now that, FRiend, is awesome coffee.
Along with the government spewing Monopoly money around like it’s truly worth something, raising the wages for doofuses is what creates this horrible inflationary spiral we’ve undergone for decades.
For example, the $1.00 bill’s value in 1936 compares to day’s nickel! If you don’t believe it a 16 oz bottle of Pepsi cost 5 cents and today it’s well over $1.00.
Doesn’t this fit under the category of crony capitalism? Using the power of the government to drive out compitition?
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