Starbucks Raises Minimum Wages to Combat Labor Shortages
Starbucks is one of the most well-known coffee store brands in the world. Do the baristas receive fair compensation?
Oct. 28 2021, Published 1:38 p.m. ET
Starbucks, Costco, and Amazon are among many companies that are looking for ways to reduce labor shortages across various industries. The cafe brand announced on Oct. 27 that it’s raising its employee minimum wage to $15 per hour. The raise will go into effect next summer. Some hourly workers will be eligible to earn up to $23. This is positive news for baristas and employees alike who have demanded a higher starting pay.
Celebrating its 50th anniversary earlier this year, Starbucks has faced many challenges including having to close down stores and deal with internal complaints. The company’s employees are working on forming a union since none of the baristas and other employees are unionized. If the workers form a union, there could be more changes to come in favor of employees.
Starbucks has been dealing with staff shortages for months.
Along with many other companies, Starbucks has dealt with limited staff throughout 2020 and 2021. CEO Kevin Johnson has done his best to portray a positive image for the company, even though the COVID-19 pandemic took a major toll on service businesses. In March 2020, Johnson started to implement perks for employees, including workers having 30 days off regardless if they show up to work or not. The CEO also increased mental health programs for employees who needed it.
While perks like mental health programs, sick days, childcare support, and tuition coverage were enticing, employees just wanted a raise. Starbucks provided slight raises and implemented them in late 2020. In August, the company announced another increase in wages and made the minimum wage for baristas $12 across the U.S.
The raise would go into effect in October, where many employees would have a minimum wage of $15. Even though raises did occur, it didn’t stop the campaigns and petitions started by Starbucks employees demanding a better working environment.
The employees stated in the petition that because of the staff shortages, workers are prone to working extensive hours. The store shutdowns across the country haven't helped either. The baristas and other employees had long shifts that aren't sustainable. It seems like the internal outcries might have been somewhat successful with the announcement of wage increases.
What’s the starting pay of a Starbucks barista?
According to Payscale, the average hourly wage for an hourly employee is $11.65. That would make sense since the $12 minimum wage increase started to go into effect this month. Workers will have some time before the $15 minimum wage fully goes into effect since it won't happen until the summer of 2022. Starbucks has also taken the initiative to improve its in-app and kiosk services in order to lessen the customer burden on employees.
Costco also raised wages.
Costco announced on Oct. 26 that it would raise its minimum wage to $17 an hour. Recently, the company announced an increase of minimum wage to $16 in February. Costco is another company that has dealt with labor shortages. The company is doing what it can to help slow the labor shortage down. Before the wage raise in February, the minimum wage for Costco employees was $15 from 2019.