Howard Schultz Takes the Helm of Starbucks, Fresh Off Another Union Win

Nothing is certain, Benjamin Franklin said, except death and taxes. Marvin Gaye added “trouble” to the list.

Howard Schultz begins his third run as the CEO of Starbucks today and should be grateful for his company’s caffeinated product because the weekend brought more labor trouble. The ninth Starbucks location in the US voted to unionize over the weekend, yet another blow to the company’s campaign against organizing.

Bitter Standoff

While sales dipped during the Covid-19 pandemic, Starbucks rebounded to a record $29.1 billion in sales in 2021, up from $22.4 billion in 2017. With the world’s largest coffee chain doing so well, workers at a growing number of US stores are filing to unionize over subpar pay, excess work, and lax benefits, arguing they deserve a larger share of the company’s success.

The latest Starbucks to unionize, the New York City Reserve Roastery is one of just three US roastery locations – huge, high-end tasting rooms launched as Schultz’s pet project. They’re more like an upscale coffee theme park than a Wi-Fi hotspot for fledgling novelists. Schultz now faces a wave of union campaigns, fancy stores or not, even though overall union membership nationwide is in decline:

• Workers at more than 185 US Starbucks stores have filed union petitions, according to the Starbucks Workers Union. Out of 10 unionization votes so far, only one has lost.​ Starbucks employs more than 350,000 people across 9,000 stores.
• US union membership dropped last year to the record low of 10.3% first set in 2019. The share of private-sector unionized employees fell to 6.1%, five times lower than the public sector, according to the Bureau of Labor Statistics.

Get Paid: Compensation in hospitality is often less than in other segments, and labor shortages have given workers, unionized or not, greater bargaining power. Last month, average private-sector hourly earnings rose 5.6% year over year, but, in the leisure and hospitality segment, they jumped 11.8%.

New York State of Mind: Amazon, which has also fought tooth and nail against unionization efforts amid allegations of low pay, lost its first unionizing vote at a Staten Island warehouse on Friday.