Starbucks Workers at Union Cafes to Receive Long-Awaited Pay Hikes

Starbucks workers at unionized cafes will receive the pay hikes that their nonunion coworkers first collected in May 2022, a key step as the coffee giant and the union representing some baristas signaled Tuesday that they are working toward breaking a standoff over bargaining.

The wage increases are a sign of good faith from Starbucks toward Workers United, an affiliate of the Service Employees International Union that has organized more than 300 company-owned Starbucks locations.

According to the joint announcement made Tuesday afternoon, a “constructive path forward” was found during mediation discussions last week. The talks were part of litigation over Workers United’s use of Starbucks’ branding, sparked by a post on social media site X from the union’s account in support of Palestinians.

Starbucks and workers reached an agreement after mediation discussions,
Agreement reached after mediation discussions, marking thaw in a relationship since cafe unionization.

Starbucks and Workers United said they have agreed to start discussions “on a foundational framework” on how to reach collective bargaining agreements for stores. This announcement marks the most noticeable thawing in the two parties’ relationship since the first Starbucks location unionized in December 2021.

If Starbucks follows through on its pledge to hike wages for union cafes, employees who have been with the company between two years and five years will receive either a 5% increase or get paid 5% above the market’s start rate, earning whichever is higher. Workers with more than five years of tenure will get a 7% increase or earn 10% more than the market’s start rate, whichever is higher.

CEO Narasimhan of Starbucks
CEO Narasimhan continues the wage policy initiated by Schultz and adds a credit card tipping benefit.

The coffee chain implemented the wage hikes in May 2022 under the leadership of former CEO Howard Schultz, who waged an aggressive campaign against the union and faced backlash from the organization, politicians, and customers for the strategy. Current CEO Laxman Narasimhan has been in the role for nearly a year.

Starbucks also said Tuesday that it would provide unionized cafes with credit card tipping, a benefit that has been available in nonunion stores for more than a year.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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